Tuesday, December 13

Today our position in HD reached its target price earlier than expected around noon, at which point we closed the position 3 points above entry. There was a gradual decline throughout the day as other investors pulled out to lock in profit after an unusually high opening price but it is probable that tomorrow will see a slight increase in price volatility as new investors move in.

We also revised our projections for GE and subsequently closed our positions at an average .5 point gain per share. A variety of sources revised their oil projection models over the weekend resulting in a more conservative fair market price per barrel of between $60 and $70 depending on who you ask (the previous estimates had oil headed above $70). This will damage GE’s now critical energy business as they plan a merger with oil equipment manufacturer Baker Hughes. This is not good news for either company.

Revised oil prices were also bad news for the struggling CHK – down 6.7% in trading yesterday. They gained back 4.2% until a high around noon today before giving it all back to close 3 cents above yesterdays session at 7.37.

Two of our long term holdings CLM and CRF fell significantly today after the ex-dividend date, we fully expect these to be back to yesterday’s close within a day or two. This is actually a reasonably good time to acquire these two issues for a much lower premium over NAV – the market price of these issues has grown at double the rate of the NAV for the last few months.

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