Tuesday, February 22, 2011

RSY XXVIII: Sell MRH

Lots of geopolitical activity has been driving the markets lately, including whether the man with many names (Muammar al-Gaddafi) has finally lived past his sell by date as an authoritarian dictator. His thoughts seem to be more along the lines of: Do not go gentle into that good night. Recent events did affect our returns today as shown below. (Click on tables for clearer images.)

Our last post recommended a sell of 200 (out of the original 400) shares of FL and the market opened on February 1st at $18.00. This resulted in a loss of almost $250 (including transaction costs). Since that time it has hit highs above $19.50. CODI has taken it on the chin after a downgrade which was incorrectly reported by Dow Jones Newswires as an upgrade and the CEO, Joe Massoud, was taking a leave of absence. Massoud was highly praised by investors but if management is broad and deep then this should be a minor setback to a solid performing company. Just last month, Steven Kiel was praising Massoud's abilities at My Top (Relatively Safe) Holdings. In addition to the recorded loss, RSY noted the following dividend payments of: EGAS providing $18 dividend, GAIN providing $8 dividend, and ARLP providing $86 dividend. Below is a summary of transactions since inception.


RSY has been sitting on a full 400 shares of MRH since September 17, 2010. Sabrient has downgraded it to hold, and as such, RSY recommends a sell of MRH of 200 shares at $20.31. It never is good to be selling into a weak market but this seems to be the time to partially harvest some of our spectacular returns. It closed today at $20.35, so this should leave some leeway from the oversold position today, but investors should monitor this closely tomorrow morning.

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