Two4theMoney

2008-09-04T10:16:00.000-07:00

Since I haven't been keeping up very well with this thing, I thought I would start a weekly picks column. I know, America needs another NFL picks column like it needs more political correctness, but at least maybe this will keep me posting semi-regularly. I'll try to throw in some thoughts on the markets as well. On with the picks (pick in BOLD):

Washington at New York (-4)
I'm a little worried about New York's shorten off-season (playing the last game of last season AND the first game of this season). But seriously, I don't think people remember how important the pass rush was to their success last year. They are a completely different team without Osi and Strahan. Tuck is good, but now teams can concentrate a lot more on him. That and they are playing against a Redskins team with the best talent money can buy (even though it isn't great). I gotta take the visitors here, but what do I know.

Detroit (-3.5) at Atlanta
Gotta take the Lions here. It's hard enough for a veteran QB to grasp a new coach's system, let alone a rookie one. Who does Atlanta have on offense? Michael Turner? Isn't he a backup? And defense? This team is in what college coaches like to call a rebuilding year, even though there is no excuse for NFL teams to have those kinds of years. Detroit sucks, but I'm taking the lesser of two terrible teams here.

Seattle at Buffalo (Even)
This is a tough one. On the one hand Seattle doesn't seem to play well on the road. On the other, the Bills have a very young offense and a defense with something to prove. When it comes down to it, I think the Seahawks are the better team and as it is the first game of the season, I don't see the travel hurting them too much.

New York Jets (-5) at Miami
Say what you want about Favre and the Jets, but does everyone forget how terrible the Dolphins were last year? The only legitimate weapon I see on the offense is Ronnie Brown. On defense at least they have Jason Tay... what was that? He got traded? The Jets should finally have a very good o-line this year and they have a capable back in Thomas Jones. If Brett Favre can just hold this team together, they have the weapons on offense to score points. However, I think it might take a couple of games for the offense to start clicking, and at least Miami is at home.

Kansas City at New England (-13)
KC is terrible. And how many times did New England cover the spread last year? Who knows if Tom Brady is really hurt? But who cares? If he is hurt, I see him coming out mid-way through the 3rd quarter with the Pats up 21 points.

Tampa Bay at New Orleans (-4)
I don't see how Tampa Bay got better and Jeff Garcia appears to be banged up. I think a happy Jeremy Shockey will play much better in New Orleans and that makes their offense that much better. The city needs this victory as well.

St. Louis at Philadelphia (-7)
There are some high hopes in Philly this year and a healthy Donovan Mcnabb may be able to deliver. Or we'll see another disappointing season from the Eagles. I'm betting on the latter. St. Louis was crushed by injuries last year and although I think the best years are behind the Rams offense, they still have some big guns. I just don't think Philly has the firepower to blow their opponents out.

Houston at Pittsburgh (-7.5)
The Steelers have been flying under the radar so far and I think that's the way they like it. After a couple of disappointing seasons following Big Ben's accident and the publicity that followed, I think the silence was a welcome change. The Steelers have a powerful offense and a hard nosed defense. Houston still has a lot to prove.

Jacksonville (-3) at Tennessee
I just don't think Vince Young has the mentality of a starting QB. He obviously has the skills, but he doesn't seem to care enough. And I can't figure out the identity of this Tennessee team, on offense or defense. Jacksonville seems to know where it's going and appears to be determined to get there.

Cincinnati (-2.5) at Baltimore
I know Baltimore is terrible but what are the Bengals doing? Does anyone know? The team is in shambles and has a defense so bad the Ravens might just be able to score against them. Either way, I can't take a messed up team like the Bengals on the road. I just can't.

By the way, isn't this kind of a "who would you rather do?" scenario, where Cincinnati is the flashy blond that you can just tell has STD's but Baltimore is the homely nerd who you aren't even sure is able to have sex? Who would you take? You can't say neither. That's why I'm going with Baltimore, because I don't love STD's.

Carolina at San Diego (-6.5)
San Diego has almost had it for so long, you gotta think they're gonna get it eventually, right? Also, it seems that maybe LT is sensing he is getting close to the end of his dominance. I think he gives it an extra push this year because of that. Not saying he isn't going to be good for a little while longer, but the guy almost never gets hurt, and although that should be a good thing, it also means he has had a lot of touches the past few years. I don't trust a Caroline team traveling across the country with no weapons (Steve Smith).

Arizona (-1) at San Francisco
This is like the Bengals/Ravens situation, except both these teams are the Ravens. I guess I go with Arizona considering Kurt Warner looked like Tom Brady in the second half of last season and they do still have the weapons, albeit aging ones. What are the odds O'Sullivan shows up drunk? I would too if I were a journeyman getting handed the starting job with the Niners.

Dallas -(6) at Cleveland
I think this spread is right on. I'm thinking of a 38-31 score. Cleveland can score but no matter what anyone says, their cornerbacks are terrible. The run stopping game should be better but the Cowboys have too many weapons in the air. And I think their defense will put enough pressure on DA to coax him into some errant throws. At the very least they should be able to stop the run, despite Cleveland's impressive line.

Chicago at Indianapolis (-8)
Peyton deserved a preseason off, that's all. The Colts are going to need to make some changes and get healthy, but as long as Peyton is back there they'll be fine. Lucky for them Chicago has no run game and a pass game that can easily be shut down if that is all you need to concentrate on. I'm thinking a pretty high margin of victory here, and Peyton getting a little rest if need be toward the end of the game.

Minnesota (-0.5) at Green Bay
I thought Minnesota was one of everyone's favorite teams in the NFC this year? Where's the love now? Green Bay has a ton of talent and I actually think Aaron Rodgers will be good, I just think this is a tough defense to get your first NFL start against. They're going to bring the pressure and are able to cover adequately down field, although I do think Jennings will give them trouble if Rodgers can make them pay.

Denver (-1) at Oakland
In this case, I'm taking the home team in a battle of two pretty bad teams. Cutler should be better but so should Oakland.

That's it for the picks. I'm still keeping an eye on Apple (AAPL). I think it's a great company but may be nearing the end of it's run. Does anyone else know of any drastic new products coming out, now that the iPhone 3G has been released? I know they have new line-ups of iPods and Macs coming out, but nothing revelutionary anytime soon. Plus, I don't care what you say, Steve Jobs health is a real concern. Apple wasn't half the company before him that it is now.

Also, keep an eye on the Chinese bio-pharmaceutical 3sbio (SSRX). It's trading a little under $10/share and has about $5/share in cash. It is also in the middle of a relatively big buy back.

Buying Opportunity?

2008-06-25T15:33:00.000-07:00

Research in Motion (RIMM) released earnings aftermarket today, missing analyst expectations by a penny (although they were within their own projections). The stock subsequently dropped over 8% in after hours trading. The question to ask is: Why?

There could be several reasons for this large decline, one being the increased competition in the smartphone market. The introduction of a new and improved iPhone and the numerous upstart companies offering Blackberry and iPhone clones has made this industry more competitive, and complex, than ever before. This added competition coupled with the sharp increase in share price since February makes me wonder if a short term (or even long term) buy in RIMM is a good play.

Despite these negatives, you have to ask yourself if the beating put on RIMM by the market is justified. For one thing, everyone (and by everyone I mean people in my inner circle) still seems to be buying Blackberries, although no one seems to know how to use them. Further, the run-up in stock price in the past few months merely pulled the price back up to where it was before it collapsed, so it is no more overvalued now than it was in November, and even less so when you consider it's earnings can't seem to stop doubling.

On June 13th Apple (AAPL) shares dropped to $170 from a peak of $189.43 a little over a week earlier (-10.3%). That is where I got in. By June 17th it was up to $181.43 (+6.7% over a span of 2 business days). I am not saying that this is the same situation; I had been following Apple for months when this happened, I can't say the same about RIMM. Further, I think Apple is a better company than RIMM and that for whatever reason you want to choose, people will buy the iPhone. What I can say is that this could be an overreaction similar to what has happened to so many other stocks in this up-and-down, no memory market. Based on this alone, I wouldn't mind taking a gamble on RIMM and seeing if it pays off. I won't due to a lack of assets, but I am really eager to see what happens with this. Unfortunately we won't know for a few days.

Making it rain..

2008-03-24T11:08:00.001-07:00

As work is starting to settle down, I’m finding more time to analyze my portfolio and the stock market. Wow, Wha’ Happened?

I’ve added the following securities to my watch list. Merrill Lynch, FARO Technologies, Terex and Profunds Ultra Emerging Market make up the final four.

Faro Technologies (FARO) Inc., designs, develops, and manufactures software-based three-dimensional (3D) measurement devices for manufacturing, industrial, building construction, and forensic applications. FARO represents the West Virginia from the West division as the people’s champ. FARO is a serious growth story. FARO is currently trading at 20x 2007 earnings, consistent with the industry average. FARO released their Q4 ’07 earnings in mid February with a stellar quarter and year. Sales for the fourth quarter of 2007 were $59.2 million, an increase of $15.3 million, or 34.9%. Net income for the year was $18.1 million, an increase of $9.9 million, of over 100%. Net income for 2007 also included a litigation charge of $2.65 million. Excluding the charge, net income grew and astonishing 153% year over year. FARO has also been able to keep its margin steady by curbing all related expenses. FARO has seen a recent increase in its stock price of 40% since its 52 week low in mid-January. I’m a buyer when FARO drops below the $28 dollar range.

Merrill Lynch (MER) provides investment, financing, insurance, and related services to individuals and institutions worldwide. Merrill is the overmatched Michigan State Spartans. They both have fallen on hard times, had their fair share of moments of greatness in the past and both are managed by top shelf leaders. There is no need to rehash the recent performance of Merrill, but its current valuations are very attractive at 8x 2008 earnings for a solid company. Also, as the fed funds/discount rate is near a record low, the Banks are in a good position to massage the lending to deposits margins to their benefit.

Side note: I just watched Semi Pro this weekend, wondering if there is anyway I can get an hour and half of my life back…..

Terex (TEX) manufactures capital equipment for construction, infrastructure, quarrying, mining, shipping, transportation, refining, and utility industries worldwide. TEX represents the east division as North Carolina – clearly the golden child of the group with the best prospects. Terex is currently sporting a 8.5 P/E ratio, which is significantly below the industry average of 12. TEX recently reported Q4 ’07 results in February and continues to show management’s commitment to growth and quality (Similar to Hansbrough pre-game work-out of shooting the 10 footer till he makes 50 in a row, uncanny). Similar to FARO, TEX has had a recent run up of about 20% since its low in mid-January. If the stock bounces below $60, I’m all in.

Profunds Ultra Emerging Market (UUPIX) an ETF that seeks to correspond to twice the daily performance of the Bank of New York Emerging Markets 50 ADR index. UUPIX represents Wisconsin as the new kid in town. Fiery Bo Ryan has turned his Badgers into a serious contender. Similar, UUPIX launched last year strutted a 70% gain last year. YTD UUPIX has given back about half of the pervious year’s gain as the international markets cool. As the pullback continues the current valuation metrics are becoming more attractive. UUPIX is a dangerous play, far too speculative for the typical risk averse investor. If the pull back continues and if a few global markets begin to stabilize (Asia & Latin America), I’ll take a spin.

Disclosure: Two-4-the-Money currently has no position in any of the stocks mentioned above but positions can change at any time.

Good Stuff

2008-03-24T10:42:00.000-07:00

http://www.businessweek.com/magazine/content/08_13/b4077028370532.htm?chan=magazine+channel_special+report

http://www.economist.com/finance/displaystory.cfm?story_id=10881361

In Randy Moss I Trust

2008-03-10T19:03:00.000-07:00

In the words of the infamous Randy Moss, "straight cash, Homey". As you can see everything has clearly hit the fan, as I'm using Randy Moss as the wordsmith of investing.......

The market's performance over the last few months has been unmentionable and hopefully forgettable.

As most investors, I'm getting defensive. I'm looking for income and export influenced equities. I recently purchased a small amount of Thornburg Mortgage (TMA) as the companies stock has dropped 80% is the last week, yielding an inflated 55%. I'm also looking into a few REIT's, thats right - "In today’s environment, that’s like saying you’re a sex offender — there isn’t a “good kind.”"

Times are tight, and the Fed isn't really helping the situation. I'm not a Monday Morning quarterback, so I'll stop there.

Two-4-the-Money

2008-02-23T00:05:00.000-08:00

2008-02-22T23:22:00.001-08:00

Patriots Troubles

2008-02-20T07:48:00.000-08:00

I wanted to say a couple of things about the Patriots' Super Choke before it was really too late:

1. Belichick is a jackass for walking off the field early. This probably isn't a news flash. You're telling me a guy as detail oriented as Belichick didn't notice there was time left on the clock? You can't believe a word this guy says. When he tells you he didn't know if was against the rules to tape - lie. All you hear about is how smart this guy is, but he supposedly didn't understand a simple rule that the NFL notified every coach in the league about? And I don't understand why people are saying now that walkthroughs don't tell you much. I've never been in a football walkthrough, but I have been through walkthroughs in other sports. In my opinion, you can learn a lot from watching a walkthrough. Is it just me, or do you only walkthrough plays and situations you think you're going to use/see during the game? You can get a pretty good idea of a team's gameplan and strategy by looking at the walkthrough. Now Mike Golic on ESPN said you can't get much from a walkthrough, and for a player that knows the system inside and out and has had it beaten into them, that's probably true. You've run all of those plays all year and at full speed. But what better tool for the other team to have than a a tape of a team going slowly through the motions of the plays it is going to use during the game? I don't know why people are giving Belichick the benefit of the doubt on this one. Nothing he has said has convinced me he is even somewhat honest. Every excuse and explanation he has given is exactly what you would say if you were lying. We'll see if anything else comes from this, but just like Bonds and Clemens, I don't believe a word Belichick says.

2. I am really excited to see how the Patriots do this year. There are a lot of forces working against them. First, trying to rebound from and 18-1 season is harder than you think. They basically worked their asses off to achieve something great a failed. This is going to be a recovery season. Anything athlete knows that when you push yourself to the limit like they did, you need time to relax and recover after it is over. It's pretty hard to motivate yourself to start another win streak, especially after how hard it obviously was on them. Also, I am anxious to see how their players react if they do start losing. It is the easiest thing in the word to be all about the team and each other when you're winning. As soon as the winning stops, people starting thinking about themselves again. There are a lof of classy guys on that team and a lot of guys that know they would be nothing if they weren't on the Patriots, but there are also a lot of guys that leave at the first chance at money. These guys, as well as Moss, could start problems if the winning doesn't continue. Luckily for them, they only play 4 teams in 2008 that had winning records in 2007. So regardless, they should still be a good team, record wise. But I am still excited to see how they all perform after the huge let down last season, which is what it was.

3. Brady's season was great, but not as good as Manning's when he broke the record. Just look at the stats (it took Brady significantly more passes to break the record and Peyton and Brady's passer ratings were pretty similar). Everyone got so caught up with the Patriots scoring that they just assumed Brady had the best season of all time. Not true.

Prediction for Pat's season: 11-5, lose in the first round.

Global Market Potential

2008-02-13T16:47:00.000-08:00

With the way the dollar has been I have been performing, I have been trying to find companies to invest in that will be less affected by a falling dollar. One of these companies could be NCR. NCR is the leading provider of ATM and self-service check out machines. NCR is well positioned internationally to take advantage of the growing middle-class in the former USSR and third world countries. As the citizens of these countries begin to accumulate wealth, they are going to demand the ATM’s that make our life so convenient. Also, developed countries in Europe and Asia still have a small amount of ATM’s per capita compared to the US, presenting a growth opportunity in these areas. NCR’s positioning abroad will be especially beneficial should the dollar continue to fall.

In addition to these opportunities abroad, NCR has done an excellent job of bringing the leading products to market before its competitors. NCR offers the largest capacity Teller Cash Recycler in the market place. This gives it an advantage over its competitors in a high margin business. NCR also offers several options for retailers that want to offer more self-service options for their customers. In addition to the usual self-check out lanes we all see at the grocer, NCR offers similar options at deli's and bakery's to improve these processes. This looks like a move in the right direction as a survey by Opinion Research Corp. showed that customers are increasingly choosing self-service lines for check-out, especially during peak shopping times. This bodes very well for NCR, now and in the future.

NCR is the leading provider of ATM and self-service check-out terminals. Its positioning in the global market, as well as its ability to offer the best products before its competitors, give it great future growth opportunities. Further, this stock has gotten little attention from investors, possibly offering a great buying opportunity for you and me. I have been watching this stock since early January, and its performance has done little to impress. However, considering the performance of the US stock market so far this year, and NCR’s strength globally, I think this will be a high performing stock in 2008 and beyond.

The Market is Un-Dude...

2008-02-07T18:05:00.000-08:00

Stranger: "How you doing there, Dude?"
Dude: "Not too good, man."
Stranger: "One of those days, huh?"
Dude: "Yeah."
Stranger: "Well, a wiser fella than myself once said, 'Sometimes you eat the bar, and'—(Much obliged)—'sometimes the bar, well, he eats you.'"
Dude: "Hmm. That some kinda Eastern thing?"
Stranger: "Far from it."

— The Big Lebowski

My Mis-Educated Option Play

2008-01-06T09:41:00.000-08:00

In an attempt to find my own *money machine* (besides my money honey), I developed a system to use options in order to exploit the market’s overreactions. As a self-proclaimed optimistic long investor, this process seemed counterintuitive That said, I am looking for the Dark horse.

The System:
For two weeks, I selected the highest/lowest percentage one-day change of all American traded securities and bought the applicable put/call shortly before closing bell. The next day I sold the options regardless of performance. Simple enough.

The Results:
Over the course of the two-week study, the portfolio had a return of 300%. For an annualized return of 7,800%. Ridiculous, right? The put options had a return of 600%, while the call options had a return of -10%. During the span of the case study, the S&P had a return of .34% and the Wilshire 5000 had a return of .27%.

Observations:
One of the limitations I found was that most of the securities identified as significant one-day changes did not have actively traded options. Roughly, a third of the securities’ illiquidity caused no change. The standard deviation of the portfolio was 12%. I was surprised to see multiple securities with a 100% bid/ask spread, indicating the extreme volatility of the securities held. The results mentioned above are net commission return of $20 per trade, typically resulting in .01% to 9% of net return.

Random thought-- I can’t wait for the WNBA to start. In conclusion, my contrarian play had a very positive performance. This study has increased my fascination with irrationality and the opportunities it creates to increase two-fold. I look forward to employing and re-developing this strategy.

Two-4-the-Money

Do What U Do...

2008-01-04T09:18:00.000-08:00

Year end update:

For the life of the blog:
The S&P had a return of 3.64%.
The Blog’s portfolio had a return of 10.11%.

Biggest Gain: Darling International (DAR) of 19.54%.
Biggest Loser: Sterling Financial Corp (STSA) of -7.6% & the Minnesota Timberwolves (T-Wolves).

Favorite Benchmark Meets Academia

2007-12-04T07:22:00.000-08:00

One of my favorite metrics for evaluating whether a security is trading below or near its potential value is Price to Cash Flow from Operations (P/CFO). The ratio of price to cash flow is a simple way to provide some insight into value – Cash is King.

In a recently published academic report Aswath Damodaran, of New York University Stern School of Business, identifies additional performance measures for return of capital. In particular, Damodaran’s measure estimates the return of existing assets.

Return of Capital = Operating Income x (1 – Tax Rate) / Fixed Assets + Current Assets – Current Liabilities - Cash

Similar to the P/CFO metric, this benchmark isolates only the assets related to the core business income generating assets, working capital. This eliminates (essentially) the effect of investing and financing activities. Please note, Damodaran covered multiple accounting and cash metrics in his publication, as I only selected the one particular metric that appealed to me the most.

To combine these metrics I established a stock screen with the following criteria: Market Cap of less than 10 billion - in order to eliminate the Danny Almontes of securities, Price to Cash Flow of less than 10 and Revenue Growth (Current Year and Next Year) greater than 50%.

The selected criteria serves as a starting point by targeting mid cap or smaller securities with a low price to cash flow and significant revenue growth. In other words, a smaller company with solid growth prospects trading at a discount.

The screen identified 15 securities. Keeping only the securities with positive earnings, the following six securities were identified:

Symbol, Company Name, Price/Cash Flow, Return of Capital
CYH, Community Health Systems , 5.9x, 4.56%
STSA, Sterling Financial Corporation, 7.3x, 103.44%
SWSI, Superior Well Services, Inc., 7.5x, 23.93%
CHCG, China 3C Group, 8.2x, 131.23%
ANDE, The Andersons, Inc. ,8.6x, 12.35%
SORL, Sorl Auto Parts, Inc. ,9.9x, 9.34%
**Information provided by Etrade & Yahoo Finance for YTD (Income) & Q3 (Balance Sheet).

The end results are dirt cheap stocks with real working capital income. The lineup includes a hospital, Community Health Systems (CYH). Sterling Financial Corp (STSA) operates over 150 regional banks. Superior Well Services (SWSI) provides well-site solutions to oil and natural gas companies. China 3C Group (CHCG.OB) integrates the selling and distribution of 3C Products. Andersons, Inc. (ANDE) operates in the agriculture and transportation market. Sorl Auto Parts (SORL) is self explanatory.

Finally, I believe these two metrics provide an inside look at how effectively management is using their current investments to generate income. Personally, I will add all of these stocks to my watch list for potential future investment considerations and will provide further follow-up at a later date. Please use this listing at your own discretion. I recently came across Damodaran’s publication and was excited to see it in action. Hopefully, this made more sense then Lou Holtz’s pep talk to the Knicks.

Disclosure: Two-4-the-Money currently has no position in any of the stocks mentioned above but positions can change at any time.

Can you say Tool..

2007-11-30T06:07:00.000-08:00

Bath yourself in the waters of vanity..

http://johnfitzgeraldpage.com/aboutus.aspx

Dirty Sexy Money

2007-11-21T12:03:00.000-08:00

No, I’m not talking about the new hit ABC show or for that matter the star Tripp Darling, Donald Sutherland. (Note: Donald Sutherland still puts the fear of god in me ever since his role as the delusional pyromaniac in Backdraft).

Two-4-the-Money sees some serious potential in another Darling, Darling International, Inc. (DAR). Darling provides rendering, recycling, and recovery solutions to the food industry primarily in the United States. It has two segments, Rendering and Restaurant Services. The Rendering segment engages in the collection and processing of animal by-products. It converts these products principally into useable oils and proteins utilized by the agricultural, leather, and oleo-chemical industries. The Restaurant Services segment involves in the collection of used cooking oils from food service establishments and recycling them into similar products, such as high-energy animal feed ingredients and industrial oils. It also provides grease trap collection services and sells equipment to restaurants.

Earlier this month Darling released their Q3 earnings to prior year data:
- Revenues were $171.8 million vs. $115.2 million. An increase of 49%.
- Selling, general & administrative expenses grew 15%.
- Income before taxes was $19.7 million vs. $2.5 million. An increase of 688%.
- Earnings Per Share of .15 vs. .02. An increase of 650%.

For the nine months ended September 20, 2007:
- Revenues were $469.9 million vs. $278.9 million in the prior year, advancing 68%.
- Selling, general & administrative expenses rose 21%.
- Pre-tax income was $50.7 million vs. a loss in the prior-year period of $1.9 million.

As the earnings numbers indicate this is a serious growth story. DAR closed the day at 17X 2007 earnings and 14X 2008 earnings, putting its price/sales at 1.33. The downside is its stock price has increased nearly 40% since its recent low in August. For fiscal year 2007, analysts estimate that DAR will earn $0.56. For the 3rd quarter of fiscal year 2007, DAR announced earnings per share of $0.15, representing 27% of the total annual estimate. So if DAR continues the EPS growth for Q4 of a conservative 400% for year over year (200% less than Q3 and YTD growth), Q4 would post a .28. Putting the fiscal year 2007 EPS at .67, betting the analyst estimates by roughly 20% and a 850% year over year. For fiscal year 2008, analysts estimate that DAR's earnings per share will grow by 27% to $0.71 based on previous estimates.

Additionally, as of October 24, 2007, Darling International Inc. moved from the AMEX to begin trading on the NYSE. This switch will increase Darling’s trading and brokerage coverage.

Other Considerations

On September 27, 2007, the Food and Drug Administration Amendments Act of 2007 (the Act) was signed into law as a result of Congressional concern for pet and livestock food safety, following the discovery of adulterated imported pet and livestock food in March 2007. The Act directs the Secretary of Health and Human Services (HHS) and the Food and Drug Administration (FDA) to promulgate significant new requirements for the pet food and animal feed industries. The impact of the Act on Darling is still up in the air until further clarification by the FDA. Based on some common sense assumption, one would expect for the Act to call for further requirements that would be inline with potential growth for Darling.

Upon listening to the Q3 press release, there was some talk of future acquisitions to further help Darling’s International growth. Currently, Darling receives 25% of its revenue from international markets (China, Europe, Canada and Mexico).

Secret weapon…

The hidden gem: the aftermath of deep fryers and restaurants' grease traps (aka - yellow grease). I’m not talking about Homer Simpson selling grease for extra cash. Experts predict that the US produces enough yellow grease annually to generate over 500 million gallons of biodiesel. Darling has already seen its alternative by-products increase significantly, with significantly more room to grow.

I leave you with a quote from Backdraft as an omen to Biodiesel consumption, when DeNiro’s character asks Donald Sutherland what he would like to do to the whole world:

“Burn it all. (Insert creepy Sutherland laugh here).”

Disclosure: Two-4-the-Money has a long position in DAR in several of their portfolios but positions can change any time.

Two-4-the-Money

The Start

2007-11-20T10:49:00.000-08:00

This is the first post of our new blog. We will mostly be discussing investments and sports as these are two of our favorite things. Gees, that sounded like a "Sounds of Music" reference. Anyways, we wanted to put our ideas out there to hopefully get some feedback and as a running diary of how good we are at making predictions about stocks and sports. We will have positions in many of the stocks we mention but we are by no means experts or even professionals. Just a couple of guys who love to see assets making assets. We do not bet on sports, and not because it's illegal, but because the funding of internet betting websites is illegal and we have run out of money. That might be an indication of how good we are at that activity. For example, the over/under on Cleveland Browns wins this season was 6. Now I, like many of you out there, thought there was no way the Browns would win more than 5 games, let alone 6. It was a no brainer of sorts. So I thought. Turns out they have already made it a push, and with their remaining schedule could win at least 4 more, if not the rest. Really, look at their schedule and tell me they can't win them all. I know its not probable, which is why i put them at 10 wins, but it is very possible. The combined record of their remaining opponents is 20-40, or something. Bottom line is if it seems like a no brainer, Vegas probably knows something you don't, so stay away. (Apparently someone in Vegas saw Joe Thomas block in preseason and thought he would be a rookie of the year candidate, helping the abysmal Browns o-line become one of the better units in the league. Who knew?)

Well that's it for now. My partner and I (nothing sexual) have been trying to start this blog thing for a while so there should be pretty regualr posts, at least at the beginning. Should have a couple more for you this week.

Two-4-the-Money