Contrarians hate it when the market moves up!

...particularly when there isn't a valid reason for it to do so!!! Efficient market, my #@$@.

I realize that Wall and Bay Street try to be forward looking but this is nuts. All the fears that precipitated the panicked selling have not gone away. They were overblown to an extent but they are still there. Every level headed person realizes that the "great de-leveraging" still has to play out for some time longer-- probably until mid-2009 at the very least.

In the mean time, I'm accumulating as much cash on the sideline as I can for entry into up to 4 new position and adding to some old ones:

New ones:

LUK: mentioned in the previous post, LUK came within a few dollars of my bid of $19/share and then leaped up to $27. Very frustrating. There is a cult-like following of this holding company so a lot of regular people (and gurus like Bruce Berkowitz) understand the quality of its management and the balance sheet despite the detractor: short term uncertainty of the highly assets Leucadia is so adept at acquiring (i.e. 70% of the portfolio is in JEF, a boutique investment bank!). I'm hoping that these people will go away soon and there will be some sort of macro-economic scare to knock them out of the stock so I can buy it real cheap. I'd hold this 3-10 years+.

HHULF.PK: Hamburger Hafen und Logistik reviewed several times. Knocked down to the low 20's euros. Short term outlook for this high margin, highly profitable company isn't good but long term is excellent. I think that it is very well managed. I'd buy in the high teens-- only because Europe is so out of fashion right now (like PHG) and I think I can get that price. I think the FMV of HHLA should be 50-60 Euros/share based on comparable ports EV/EBIDTA valuations. Being traded OTC makes this a thinly traded stock-- another reason it shouldn't be traded but bought for the 5 year+ horizon.

Old ones:

PHG-- because of the dividend, great balance sheet and the "green" play with the LED lighting market share. It's also very, very cheap, even after the rally. I don't think it's a GREAT company like LUK or has potential to be great like Hamburger. I think it's dirt cheap for a profitable company with 3 B of cash in the bank, trading at 0.7 book value, P/E of 5, P/S 0.5 and 15% ROE. Hard to resist at < $16/share

BBSI-- one of my favourite small caps. In a deeply cyclical business and still making money. Has no debt, high insider ownership and very strong management. The CEO has been sick lately and required some sort of major surgery-- this has me mildly concerned. The company ran well and maintained their + cash flows despite a terrible environment for staffing/PEO services with him being absent so that's reassuring. Dividend is being maintained and the share buyback proceeding as planned. They still have 50 M in the bank for acquisition etc. I'd buy at $9 or less without hesitating.


Others:

SEB

AXP

HOG

SNY

NVS