Fund My Mutual Fund Stock Invitational - 2nd Round

After an much too long first round, filled with a lot of snoozers, and only a few upsets [full results can be found here], we should have a lot more interesting 2nd round with some barn burner matchups of heavyweights.

Now keep in mind, when you choose it's not just your favorite today but what can return the most over the next 12 months - so things that are currently out of favor could return the most by April 2009.

I'll be posting 4 matchups a day, since the first round took SO long and I don't want this to turn into May Madness!

Technology Region
(1) HP v (8) Corning - Corning was valient but lost a close battle with HP topping at 53% of the vote
(12) IBM v (4) Oracle - IBM, the George Mason, the Davidson of FMMF Stock Invitation takes down another high seed - can it take out the #1 ?? 58% of the vote
(11) Verizon v (3) Apple - Apple eats Verizon for lunch with a 95% decision
(7) Cisco v (2) Google - Google, resting on its laurels, in a landslide with 80% of vote setting up an epic Elite 8 matchup

Health/Home (all favorites won first round in the Snoozer bracket)
(1) Pepsi v (8) McDonald's - Poor Americans push McDonald's past middle class Chinese eating at KFC in Shanghai - 59 to 41%
(5) Altria v (4) Walmart - Smokes still win out with 55% of the vote; but give it a year and I think those freshman and sophmores on Walmart will showcase their talent in the heart of recession 2009. Altria advances.
(6) Coca Cola v (3) P&G - P&G with 2/3rds majority. Can't live without toilet paper.
(7) Merck v (2) J&J - J&J with 73%. Can't live without shampoo.

Financials (all favorites won first round in the Snoozer II bracket)
(1) Berkshire v (8) US Bancorp - led by their senior named Buffet a blowout, Berkshire with 87%
(5) Mastercard v (4) China Life - Mastercard wins out with 62%
(6) Simon Property v (3) Goldman Sachs - with people placed throughout the government Goldman easily wins with 87%
(7) NYSE v (2) JPMorgan - With a Fed assist JPMorgan wins with 65% of the vote

Industrials
(1) United Technology v (9) Exxon - wow Exxon with the upset - and not even close with 2/3rds majority
(5) Potash v (4) Freeport - Freeport got a very tough draw - the commissioners dark horse to win the whole thing, Potash comes through with a 78% vote count
(6) Alcoa v (3) Toyota - Alcoa squeezes it out 51 to 49% - now it can be sacrificed to the BHP gods
(10) Caterpillar v (2) BHP - BHP in a rout with 84% of the vote

Congress is Rushing to Help Home Owners!!! (Not)

I just wanted to go out to the weekend with this post... it is really quite reprehensible ... we are being fed that Congress is working furtively to help out homeowners with some version of a bailout. Notwithstanding that I hate all these bailouts, at least be intellectually honest with people.

What is really happening? The banks and the home builders are getting the lions share of the benefits. The banks I can understand... they are powerful, they have a huge lobby, they have a lot of friends and relationships in D.C. But homebuilders? That relatively small group? I wonder why they suddenly have so much power.... but then I remembered about a month or two ago, they insisted if they do not get relief (mommy I need my tax rebate), they'd be suspending contributions to the politicians coffers.... and nothing gets a politicians attention like less funding for their re-election campaign. From an article on 2/14/08

• The National Association of Home Builders, one of the top 10 corporate donors to politicians, has stopped contributing to congressional candidates after it failed to get what it wanted in recent anti-recession legislation. (I admit, i did not know they were one of the top 10 donors)
• The powerful lobby said Tuesday that it was taking the unprecedented action of halting its campaign-giving to protest Washington's failure to address "the underlying economic issues that would help to stabilize the housing sector and keep the economy moving forward." The group did not mention any specific initiatives.
• The association had unsuccessfully pressed lawmakers to adopt a provision to reduce the tax liability of home builders by allowing them to offset their past profits with future losses. (which is what they are getting now)
• Election experts said the lobby's move illustrated how closely interest groups tie their donations to the decisions they hope lawmakers will take on their behalf -- a connection that usually goes unspoken. "This demonstrates in a starker fashion than we're used to seeing how groups use political contributions to promote their positions in Congress," said Kenneth A. Gross, a campaign finance lawyer at Skadden, Arps, Slate, Meagher & Flom.
• The home builders' announcement also explodes the oft-repeated assertion by politicians that lobbyists deal with them only at arm's length. "How many members of Congress have you heard say, 'People donate to me, but it has no effect at all'?" Sloan said. "What the home builders have done is expose the underbelly of the connection between money and politics."

So what happened? It didn't even take 60 days and we already have programs being rushed through to make sure the homebuilders are suckling contentedly from the nipple that is the taxpayer's money. Awwww.... isn't that sweet? And we can even put a cute and fuzzy label on it "Foreclosure Prevention Act of 2008" that makes the peons in the country feel like Congress is hard at work to help them out. It's all so beautiful... I need to go dab my eye with a tissue. It is amazing to see how efficient Congress can be, when it is looking out for its own interests - when it comes to other things they fight and stall and get nothing passed for years. This is your country - I'd just like more people to see what really goes on behind the scenes so this is why I throw it on the blog. Cramerica... for the corporation... by the corporation.

• Homebuilders and the mortgage industry are emerging as big victors in a bipartisan agreement reached by Senate leaders on legislation designed to limit the housing crisis.
• The $15 billion Foreclosure Prevention Act of 2008, expected to be debated Thursday afternoon on the Senate floor, is drawing fire from critics who say it would do little to actually prevent foreclosures. The bill contains a $6 billion emergency tax break that would let companies use losses from 2008 and 2009 to offset profits earned over the previous four years, instead of the usual two-year timeframe. That's good news for big homebuilders such as KB Home and Pulte Homes Inc., which have been saddled with massive losses over the past year.
• Other big beneficiaries would be Wall Street banks such as Citigroup Inc., Merrill Lynch & Co. and Morgan Stanley. In fact, any company now struggling after years of healthy profits that pumped up their tax bills could benefit. (shocker!)
• While Democrats and Republicans called the bill a productive bipartisan compromise, Dean Baker, co-director of the liberal Center for Economic and Policy Research in Washington, questioned whether the trade off was worthwhile for Democrats. "This is first and foremost helping the big villains in the story," he said.
• Earlier this year, the National Association of Home Builders was so dissatisfied by lawmakers' actions — notably not including the tax provision in the economic stimulus bill_ that it snapped shut its political purse. NAHB said it would stop making contributions to congressional candidates "until further notice." Since 1990, the trade group has given nearly $20 million to federal candidates, with 35 percent going to Democrats and 65 percent to Republicans, according to the Center for Responsive Politics. (that's a hell of a return on investment, $20 million over 18 years buys you $6 billion - now that's a return on capital!)
  
• The bill also contains $4 billion in grants to local governments to buy and refurbish foreclosed homes, new authority for states to issue bonds to be used to refinance subprime mortgages — those made to borrowers with poor credit — and a $7,000 tax credit for people buying properties in foreclosure.
• It includes an additional $100 million — half of what Democrats proposed — for credit counseling to help homeowners avoid foreclosure. And the agreement permanently raises the limit for loans backed by the Federal Housing Administration to $550,000. That amount had been temporarily raised to nearly $730,000 as part of the economic stimulus bill signed by President Bush in February. (oh I missed that part... more high priced homes thrown into FHA - I was assured this was a TEMPORARY provision just a few months ago? anyhow... $100M for counseling peons, $6B for homebuilders - sound equitable)
• Homeowners facing bankruptcy, however, won't find relief in the proposal. The mortgage industry fought fiercely to spike a provision to let bankruptcy judges rewrite the terms of distressed mortgages. It won that battle; the provision was left out. (let me guess, the mortgage industry is also a top 10 donor to political campaigns....)
• The absence of bankruptcy intervention was criticized by 15 civil rights, labor and consumer groups — including the Center for Responsible Lending and the Consumer Federation of America. In a joint statement, they called lawmakers' actions "a win for the financial services industry that brought us this mess."

Wonderful.

Bookkeeping: 'Rising Tide' Performance Week 35

Week 35 performance of the mutual fund

Comments: Another bipolar week in the market, with financials/retailers/homebuilders ramping Monday - Wednesday, while commodities were trashed, followed by the exact opposite on Thursday and Friday. On Tuesday, we had our third 400 point "best in 5 years" type of rally in the past 4 weeks, but this time, unlike the past 2 I cautiously went out on a limb believing this move could have some legs as we made a new higher high [Dare I Say It? A Higher High?] This proved to be an accurate call, as the market shrugged off >400K weekly unemployment claims and a worse than expected monthly labor report later in the week. We're at an interesting point as I outlined earlier today. We've put on quite a move, a lot of charts look technically better than they have, but volume has been relatively light and we need more people at the party to take us higher. But the action has been far more constructive than any other week this year (and we're already in the 2nd quarter), so there remains some hope for an extension of a rally as opposed to all those other false bottoms that pundits assured us "no, really this is the bottom - buy buy buy!"

On the economic front, things continue to worsen. I am only awaiting the moment the first pundits begin the "1st half 2009" recovery - from their current "2nd half 2008" recovery. Just remember, everything will be fine in "6 months" - they just don't tell you which 6 months. Again, my views have not changed but as with Sep/Oct 2007 when the "accurate discounting mechanism" of the collective market completely missed the coming financial carnage, I had to hold my nose and drink Kool Aid. Just like I am doing now. I don't believe in any of the myths being told, but I realize these myths can take the market up, and if I sit on my hands, or stay insistent on being short the market, I will be correct intellectually but make my shareholders far poorer. That's not the point.... so I'll play along conceptually but just smirk intellectually at the madness of the Kool Aid. The market is pricing in a 'light, shallow, and quick recession' - I believe it will be much harsher than that, so when the market needs to price in what I believe will be coming we will have another 'adjustment period' (read: down). I truly think this is one of the biggest disconnects between Main Street and Wall Street I've seen in my years doing this... but the people who reside in both spheres do live in totally different worlds, so I can at least understand "why" the disconnect is there. But I continue to believe the ivory tower crowd in NYC is going to be surprised by the large earnings revisions downward coming in 2nd half 2008 for any domestic focused company - multinationals should be ok...

The fund had a solid week, but it was a Tale of 2 Weeks. The fund was trashed early in the week [This Week's Commodity Action is a Reversal of a Reversal], and in fact lost a lot of value Monday and then even was down Tuesday as the indexes sprinted to 3.5% gains. We did not own the type of early cycle stocks the market was falling in love with (once again) - many financials ran up 15-20% early in the week so I could only watch in mock horror. Further, I actually owned Ultrashorts against all these positions (and a large cash position) which has served me well for months, but has been awful 3 of the past 4 Tuesdays, including this one. I correctly dumped a large portion of these Ultrashorts late Tuesday but the damage was already done that day. Essentially running a 'hedged portfolio', the days the markets make magnificent moves upward, I can never hope to match those returns - you'd need to be completely or nearly completely unhedged, throwing caution to the wind at the exact right moment to fully participate in such moves. I did a lot better later in the week when individual names ramped and the markets were relatively listless.

Later in the week some moves back into commodities and a prescient call to re-enter solar stocks in a material way helped me gain back some of the lost ground versus the indexes (especially Friday), but the knockout punch of Monday/Tuesday made it impossible to catch up, especially with a 25-30% cash position for most of the week. I also went cautious on my fertilizer exposure, specifically with Mosaic (MOS), reducing it from a 6% position mid week to just above 1% going into earnings Friday - not because of fear of results, but because of fear of the lemmings reaction to results. So a quick back of envelope calculation shows by reducing my stake by 5% and missing out from $100 to $113 or so where I began getting back in the name today, I left about 0.6-0.7% of fund performance on the table. Quite a lost opportunity... but that's the opposite side of being cautious - you are going to leave some on the table. I still stick by the structure of the trade (because if it went down severely I'd be thankful) and as we enter earnings season I'll probably miss a few other opportunities like this because I'll be cutting back exposure for almost every stock going into earnings - just too much unpredictable behavior for my tastes. I prefer to be a contact hitter, producing a lot of singles, doubles with a few HRs thrown in, rather than a HR/strikeout king.

So overall, the fund made a very nice return this week, but due to the above mentioned reasons lagged the huge move up (most of it in 1 day) by the indexes. The S&P500 returned +4.2% this week, and the Russell 1000 +4.3%. Rising Tide Growth Fund gained 2.8% so a nice return on absolute basis, but we trailed the indexes this week.

Price of Rising Tide Growth: $11.538
Lifetime Performance to date (vs Aug 3, 2007): +15.38%

Comparable S&P 500: 1,370.4 (-6.47%)
Comparable Russell 1000: 747.12 (-6.16%)

Fund return vs S&P 500: +21.85%
Fund return vs Russell 1000: +21.54%

Last week's results here.

Since the market cap of the median stock in the Rising Tide Growth fund (median $9.8 Billion as of November 07) is significantly below the SP500 index (median $13.1 Billion as of September 07) but higher than the median market cap in the Russell 1000 (median market cap $5.8 Billion as of September 07), I am measuring the fund against both indexes. Click here to see all fund's holdings as of January 2008.

Basis for indexes is 5 day weighted average of closing prices Aug 3-9
SP500 : 1,465.2
Russell 1000 : 796.2

To see why I use the 5 day weighted average of the first 5 trading days to smooth out the volatility of the indexes as the fund launched, see here.

Please click here: fund performance for previous updates

To the Newbie Economists Out There - A Horde of Helicopters has Moved In

I grabbed this blurb from Realmoney.com's Tony Crescenzi (link works for subscribers only) - it is M2, a measure of our money supply (the amount of paper money floating through the US) Unprecedented flooding of liquidity happening people... driving up ALL ASSETS. The costs? Inflation and (potential) weakness of the dollar although the latter could be debated as long as people think the US is on the road to recovery (which would lead to in theory a dollar rebound)

But the inflation portion is NOT a theory - it is fact.....in English what is happening is for every 5 dollars you have, the Federal Reserve is printing 1 more and throwing it into the system. So your dollars in your pocket are being devalued at a historic rate. So go spend it... QUICK... because it's becoming more worthless by the minute. Read on...

M2 increased $32.2 billion in the week ended March 24, according to data released late yesterday by the Federal Reserve. M2 has advanced $264 billion to $7.721 trillion since inflecting upward in the middle of January, a 21% annual rate.

These figures are unprecedented. The only periods close to the current period (they are not close at all, really) are September 2001 and in the fall of 1998, when the Fed cut rates following Russia's default and the Long Term Capital Management collapse.

***********************
Here is a chart (with some delay) on money supply in this country via Shadowstats.com (who I believe is very accurate on his unemployment rate and inflation data - as it shows how government numbers USED to be reported before they were adjusted to make everything look more "benign").... you can see M3 going off the chart of late



I wrote a piece on M3 (which is a broader measure of money here - What is M3 and Why Do Yuo Care?). I've been using this M3 measure since the government stopped publishing it (I wonder why) 2 years ago, but I guess even M2 is being hosed. I know it sounds dry, but I really urge everyone to learn about what is going on behind the curtain of Oz so you realize why our dollar is being destructed and inflation will ramp. This signals to me that the Federal Reserve, while putting on a calm face, is frightened stiff of deflation... which is about 100x as bad as inflation is... think 1930s.... the total reluctance of our banks to loan money (instead hoarding it to fix their balance sheets full of toxic mortgage waste) appears to be the culprit from this pulpit. So to "solve" the problem, they are just creating more... and more... and more... money until it floods the banks and they have enough to lend out. What a system...

Late Payments on Consumer Loans at 16 Year Highs

While we drink Kool Aid, and toast each other on Wall Street, just keep in mind, at some point we need to recognize Main Street - so we'll continue to keep an eye on it. Remember, aside from the subprime and Alt A mortgages, we need to worry about prime mortgages, auto loans, student loans, credit cards, consumer personal loans... etc. These are things that are going to weigh on financials for a long while and in fact accelerate as more people are foreclosed on, jobs are lost, credit cards reach their limits, 401k balances are emptied, and inflation rears its ugly head.... but remember the stock market is not the economy (in the short run). But for now... toga, toga, toga.

• More Americans have fallen behind on consumer loans than at any time in nearly 16 years, as credit problems once concentrated in mortgages spread into other forms of debt.
• In a quarterly study, the American Bankers Association said the percentage of loans at least 30 days past due rose to 2.65 percent in the fourth quarter from 2.44 percent in the third quarter, and from 2.23 percent a year earlier.
• The rate of delinquencies was the highest since a 2.75 percent rate in the first quarter of 1992. It provides a fresh sign the nation's economy is slowing, and may be in recession.
• "Deterioration of household credit should continue through 2008, though the rate may moderate," he added. "If it intensifies, then the current recession may prove more severe than anticipated."
• ABA Chief Economist James Chessen attributed the jump in the delinquency rate largely to auto loans.
• Late payments on "indirect" auto loans, which are made through dealerships, totaled 3.13 percent, the highest on record. Delinquencies on direct auto loans rose to 1.90 percent, a 2-1/2-year high.
• Credit and debit card delinquencies rose to 4.38 percent from the third quarter's 4.18 percent, following four straight quarterly declines.
• Housing wasn't spared. Delinquencies on home equity loans rose to a 2-1/2-year high of 2.39 percent, and on home equity lines of credit rose to 0.96 percent, matching a level last seen in the fourth quarter of 1997.
• The ABA study covers more than 300 banks that extend a majority of outstanding consumer loans. Its study covers direct auto, indirect auto, home equity, home improvement, marine, mobile home, personal and recreational vehicle loans.

I actually believe credit cards will be the last to go - since people are using them as perpetual cash machine... i.e. charge $800 this month, only have to pay back $75 to keep the game going. Everything else will go first - but it's a long term process so we can have "hope" in the meantime and cling to rebate checks and everything will be fine in 6 months. Until home prices start going back up, nothing will be fine... we need our house ATM as a nation to keep spending 110% of our paycheck. Or more, if we splurge for things such as ... well... food. I keep coming back to this tax our Fed is helping to exaggerate... the worst tax for the common folk... inflation. But we did save NYC bankers and that is the important thing...

• Patricia Norris' family is feeling the one-two punch of higher fuel and food prices. Her husband works as messenger, driving around to deliver packages. But the job is not as profitable as it once was because rising fuel prices are eating into his earnings. With money tight and food prices rising, Norris can no longer afford to buy beef and chicken on a regular basis. "Sometimes I cry," she said, when she passes items on store shelves she can no longer buy.
• Reuters reporters visited Wal-Mart stores in Romeoville, Illinois, Secaucus, New Jersey and Santa Clarita, California, on the last day of March and the first day of April to find out how shoppers are navigating the food aisles when they have payday cash in their pockets.
• Already squeezed by high gasoline prices, slumping home values, a weakening job market and the possibility that the U.S. economy is in a recession, consumers have adopted a no-nonsense approach to shopping, passing over a trip to Target or a local grocery store if they can find lower prices at Wal-Mart. (BINGO! One of my favorite predictions - Dec 26: Target Shoppers Turning into Walmart Shoppers)
• They are buying cheaper store-brand products, avoiding costly cuts of meat, consolidating trips, clipping coupons, constructing well-researched shopping lists and avoiding splurges to spend only the bare minimum. (acting responsibly? American consumers? Shocker - but what happens next year when prices go up another 15%+?)
• That has consumers like Laura Miller taking a calculated approach to shopping, much of which she does at Wal-Mart in Santa Clarita, California, a planned community on the outskirts of Los Angeles. Married with three little girls, Miller said her food costs have almost doubled to $300 every two weeks. (thankfully, CPI shows that her bill only went up 4% - I have no idea why she thinks her grocery bill doubled)
• Miller's printed shopping list, organized by item and place of purchase, shows that she does the bulk of her buying at Wal-Mart. (Do you notice the same store popping up over and over?) [Jan 19: Some Walmart Commentary]
• Increasingly, shoppers like Wikholm must wait until payday to load up on groceries and then hunker down until the next paycheck. At all three Wal-Mart stores, that trend was visible. "There's no question that people are shopping when they have money in their pocket," said Tracy Ferschweiler, the manager of the Secaucus store.
• Leslie Dach, executive vice president of corporate affairs and government relations at Wal-Mart, said the cycle of shoppers running out of money in between paychecks and then flocking to its stores on payday is "more pronounced, more visible."
• Mary Ann Doyle, a 75-year-old retired teacher browsing in the dairy aisle at the Wal-Mart in Santa Clarita, said she is now buying food in smaller quantities, like half a dozen eggs instead of a dozen, and using more coupons. "It needs to get better," she said of the economic situation. "I hope we've hit rock bottom."

Now just imagine the poor seniors on fixed income getting 3% cost of living adjustments. But don't you worry, all these problems go away "in 6 months". [Do the Bottom 80% of Americans Stand a Chance?]

I keep looking at that Walmart (WMT) chart as a surging buy as I mentioned a few months ago... the pooring of America continues... but not in NYC where they are oblivious to it, and the government "has their back", at the cost of the devaluation of all our money, right Jimmy Cayne?

Position: General sense of sadness and disgust at "2 Americas"

Familiar Crossroads

We are at a very familiar crossroads we've faced most of the past half year... I look over the earnings reports, earnings upgrades, product price increases in stocks I own for the portfolio the past few months, and I continue to love their fundamentals. They are executing. In fact many are getting "cheaper" as their fundamentals only get better. I pat myself on the back for solid stock picking. Each time the market gives us any peace and after it runs up the obligatory "early cycle plays" that the herd buys without thinking, these stocks who actually have good stories ramp up and reflect their superior underlying fundamentals (as opposed to buying Fannie Mae because the government will bail it out)....

.... but, 90% of the time the past 6 months individual stock market fundamentals are completely trumped by the market direction. I look back on my history with the fund and in the times the markets rewarded individual company fundamentals the portfolio has exploded higher. The rest of the time when "all stocks stink" or "all stocks are great" or "early cycle stocks are the way to go because thats what the playbook says" we lag. This has been the major problem with this environment - to do well 90% of the time, you have to guess the market direction; it has nothing to do with individual stock selection. And this is what makes this market the most difficult I can remember, even 2001-2002 when you knew everything would be sold off 80% of the time - at least it was consistent - almost everything stunk. And it would go in the same direction (down) month after month after month. Nowadays, we have 180 degree changes in direction literally every 3rd day. So the indexes actually hold up relatively well, while individual stocks get battered, and if you are not in a stock down 30% in the past 2 weeks (i.e. any financial, retailer) and pick the bottom perfectly, you miss out on the 25% gain that comes in the following 4 days. If you are a day early or late you miss out on half the move. So it is indiscriminate action and it works against stock picking.

So this is not a market that rewards my type of fundamental analysis or picking large macro themes. It rewards those with timeframes of hours (daytraders) who close out their positions every night. Or people with bipolar personalities and a magic crystal ball who can predict when the market will change 180 degrees based on a Ben Bernanke remark, a Federal Reserve bailout, a surprise intervention here, or a massive writeoff there.

That said, the last few days have been different and seeing many names in the portfolio finally get rewarded based on fundamentals is nice to see. But that sort of action has not lasted for more than 2 weeks since October 2007. So it continues to be tough sledding, but I continue to believe in all the concepts and themes I've been presenting. Even if the market refuses to stay with any concept for more than a week. When stocks react more to their underlying story rather than if the market is + or - 300 points each day, I believe the fund will return to a more consistent pattern of outdoing the markets by a significant degree. Like I said before that does not even require the market to go up (or down)... sideways or a gently sloping trend down is fine. But the 1200 points in 2 weeks moves up, followed by 1500 points in 2 weeks down, followed by +400 point 1 day move up, followed by -300 points 1 day move down, followed by sell all commodity stocks on Monday, followed by buy all commodity stocks on Thursday.... is not an environment that rewards any thought or analysis. It is just random swings from pure panic to greed.

So we are at another crossroad now... many charts of my favorites look very good and poised for a sustained move *IF* the market does not implode. And the problem is, some news from out of the blue could cause implosion at any moment. Or the move from denial of the economic problems to recognition. And suddenly all your nice charts with great companies with extremely promising fundamentals, mean as much as a hill of beans. So do you sell here, lock in all those recent gains or let it ride? Who knows. Which is why this market continues to be extremely difficult.

For now, I'll continue to remain bullish as long as we hold S&P 500 level 1350. If we break down below that, unfortunately we probably simply return to the random action we've experienced for months on end, when having a Magic 8 Ball is more important than stock research.

LDK Solar (LDK) Keeps Signing Deals Left and Right

LDK Solar (LDK) is putting the screws to the shorts who have put the stock in purgatory for months on end, with another series of contract announcements. Not huge wafer deals, but the timing is impeccable as solar stocks are in the midst of a good run.

• Chinese solar wafer maker LDK Solar Co. Ltd. said Friday it signed two wafer supply agreements and one polysilicon sourcing deal.
• The first wafer supply agreement is with Greek solar cell producer Silcio SA and calls for the delivery of 50 megawatts of silicon wafers over the next six years. The second is with Arise Corp. of Canada for 33 megawatts of silicon wafers. It is a "take or pay" contract, LDK Solar said, with delivery set through 2011.
• LDK Solar also secured a polysilicon sourcing agreement for 1,450 metric tons (1,599 tons) with shipments scheduled through 2011.

I took this position up to 3.5% of the fund yesterday on it's breakout [Bookkeeping: 2 Quick Transactions], and continue to believe fair value is north of $40. As long as the overall stock market continues to hold up, I will hold these shares and see if we can get to $40 before lightening up. When LDK Solar runs, it really runs...

I am taking a bit off the table in Trina Solar (TSL) as the stock is up 5% in sympathy and it's a major overweight position that just breached 6% of the fund's holdings with today's gains, so I am going to take some profits off the table...

Long both names in fund and personal account