01.21.14

Hi everyone,

I reduced our equity exposure in this newsletter. At year end, I tried to find some bargains. There were a few quick trade in corn: Pacific Ethanol, Inc. (PEIX) and gold.

Gold

Gold goes up with inflation and low interest rates. I don’t find gold compelling on an inflation-basis; on a low-interest rate assumption basis.

RSP

rsp.oe

SPY

spy.oe

Portfolio Adjustments

The market keeps going up until it doesn’t. The market, to me, appears closer to a short-term high than a bottom. I would like to see a 5% – 10% pullback. This would be healthy. Ideally we can pick up some attractive equities; spinoffs; MLP’s; REITs; warrants; CEF’s; and blue chip stocks trading with attractive yields.

I believe the two purchases in today’s newsletter are compelling values.  Paramount: I increased our hedges. I sold/exited positions with a low risk/reward basis. These are only my views. Ideally we are set up correctly if the market goes up or down.

I believe preferred CEF’s; select monthly dividend paying CEF’s, are a core positions.

Thanks,

Todd & Mike 

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