DanLog the ramblings of Daniel Pettit

So yesterday Julie mentioned how a man at the Apt Association had recently bought several houses in OC for $100k, this got me thinking that I should see if there is anything deal good enough for me to get into investment wise. Well did I find a deal! This one particular community in North Santa Ana on the border of Tustin. Very nice “townhouse” type condos. 2 bedroom 2 bath in the mid $50′s yes 50′s I didn’t forget a zero. I see that the association dues while quite higher than I pay, they’re not completely ridiculous. The satellite photo of the neighborhood looks good. There are several homes for sale in the community at bargain basement prices. The ones I’m looking at are either short sales or bank owned. So I wonder what is wrong here? I mean I could literally buy one of these 2 bedrooms on my Costco Amex card, okay I’d have to use both of them. Even at 13% and a ten year payback term, I could finance 100% and rent it out and be in the black by $100-$200 a month. So why hasn’t someone else bought all these up?

I mention this to Julie and she says she’d driveby today on her errands. She called me with the “catch”. The land is leased. The original 30 year lease is up and will be reset to current market value. They have been paying around $40 a month, well the new rate is going to be about $2000 a month. Okay then there is the deal breaker. Even if the condos were free you couldn’t charge enough rent to even cover the land lease. The whole thing is in litigation right now and I’m sure the final lease will not be that high or some offer buy the land might be offered. So there still might be an opportunity here for an investor with steel nerves and deep pockets to nail down an opportunity.

For me I will whistle on by this one. I have found many decent 1 and 2 bedrooms in the $90k – $120k range around South Coast Metro. I think I just might pick up one provided I can get traditional financing ( I wonder if Chase will offer offer me another 2.99% until paid off deal and add a zero to my credit limit?) At these price levels you can get in and be cash flow positive with little or no money down. Something unheard of in the OC market for years.

Well the market at least is breathing. The Dead Cat bounce that started Friday reared it’s head with a vengeance today with the DOW up 936 points. That brings us back to around last Tuesday levels. A quick survey of my holdings shows that every single stock was up today 35 for 35, even Downey Savings managed a gain. VIP was the leader with a 33% gain. Maybe this will set the stage for some retailer shorting in the near future.

Okay so once the dust settled for the day the DOW wasn’t off another 600 points so it could take more time to reach zero. The markets turned out mixed, but it was a wild ride. The point swing on the DOW was 1018 points, a new record.

My milkman buddy told me that basically he dug a hole in his backyard and buried his cash. His wife didn’t understand until her bank IndyMac got seized and she was without money (they keep their finances separate) for a week or two. He had a funny observation when I was talking about my fertilizer stock, about how that they should be experiencing high demand for their product, you know with all the terrorists out there

So at this rate I figure we’ve got 16 days before the DOW hits Zero. GM’s total market value is where it was in 1929, the sum total of stock outstanding would cost you just a little over $2 billion this morning. By comparison Volcom is worth about $300 million. When I woke up and heard the market had been down 500+ points again, I was thinking Volcom is probably at some ungodly low and I should add to my position, but no it was actually up and up enough to bring my whole portfolio up for the day. They got an upgrade from some analyst. Actually I see quite a few of my holdings are up this morning. There seem to be numerous buy recommendations coming from the Street. We are either at a tremendous buying opportunity for some equities or the wheels are really going to fall off and we’ll be bartering at WalMart by next summer.

I did place an add on buy for NEEGX. I’m looking to start shorting retailers, like Nordstrom as soon as we get a bounce. I can’t see how this isn’t going to be the worst Christmas buying season in decades.

Bought 9-5-2005 @ $34.46

This portfolio is my “Personal Christmas Club Account” the proceeds of this account are for gifts for me from me. I’m planning on a Plasma when account equity allows. Most are selected using loose CANSLIM, with some exceptions as noted.

Bought 9-16-2005 @ $72.90

Bought 9-6/2005 @ $65.29

Bought 7-20-05 @ $30.70

Bought 6-17-05 @ $44.98

Bought 2-25-05 @ $37.43

Bought 12-17-04 @ $46.73

Bought 11-19-04 @ $0.29 This one obviously isn’t a CANSLIMer just a small throw at the dice. As you can see it had a sharp runup after I bought it but being the pig that I am, it didn’t reach the +1000% mark so here is still sits. Well below what I paid. I still have hope of another hype driven move if their product ever leaves Vaporware Land

Bought 11-18-04 @ $41.98

Bought 4-26-99 @ $106. This was already in the account when it became the TV portfolio. This is a hold over from the dot bomb days.

Bought 5-24-05 @ $25.33 [black arrow], Sold 9-1-05 @$19.23 [red arrow]-24% This had been acting poorly but the fundamentals were outstanding, I had a couple warnings, [green arrow: with 2020 sell here][yellow arrow: really should have sold it here]but the stock found support at it’s 200 day line. Then the retail sector got hit again this time BEBE gapped down, slicing through it’s 200 day line.

Sold Short 6-17-05 @ $16.32, Covered 6-29-05 @ $17.17 -5.2%It should have been sold when it broke below 24 on 8-16/05.