PORTFOLIO UPDATE: ROTATION STATION
A couple of notable updates here. First, on April 15th, I tweeted the following: IWSY was reinitiated in February after being out of the portfolios for several months. I continue to believe the company is being primed for acquisition. They are IT in multimodal biometrics, as I've discussed in previous reports, including the original report from March of last year when the stock was trading for less than a buck. My opinion of the name hasn't changed. What has changed are the opportunities that I have discovered as the bull market continues. As these opportunities develop, I become a rotation station. If I discover an opportunity, for example, that offers 20% risk in exchange for 400-500% reward, with my being able to have a clearer understanding of the variables on both the upside and downside, then I will switch into that opportunity without hesitation. IWSY no longer offers that type of risk/reward equation. Downside here is negligible, but upside is likely capped at 100-200% from here. I can do better. Bringing me to the next update. Earlier today I tweeted the following: I had a very difficult time accumulating the position I wanted in KFS. I am sure I was competing against 1 or 2 other institutional investors who wanted shares of the company as bad as I did. I didn't mind chasing it up from 4 to 5.30. My average ended up being right in the mid-4 range. The research report for KFS is available here for those who haven't already checked it out. I'm looking at this opportunity as a multi-year deal for myself and my investors. The only way to get the full experience in KFS is to approach it from a minimum of a 3 year time frame. Anything else and you are simply cheating yourself out of what is being assembled here. There is no sector I am more bullish on over the next several years than financials. Within the financial space, I am most bullish on property & casualty insurance. The insurance sector is special in that it can provide a tremendous amount of leveraged gains that result from the virtuous cycle taking place of a generally healthy financial market; operating structures that have gained tremendous efficiency post-financial crisis; a robust M&A environment being led by deep pocketed private equity firms; net operating losses that have been carried over from the crisis. Well run insurance companies will essentially become compounding machines over the next several years. That potential is not even close to being factored into a company like KFS's stock price. In fact, KFS is only trading 26% above its 2012 high, when...
NEWEST RESEARCH REPORT: 11 PAGES ON KFS (KINGSWAY FINANCIAL)
T11 Capital Management is currently long KFS at an average cost in the mid-4 range. Please see disclaimer at end of research report. Download (PDF,...
HERE ARE THE ONLY TWO CHARTS YOU WILL NEED FOR THE REST OF APRIL
Simplification of seemingly complex situations in the markets is key to longevity in this business. If a situation cannot be simplified to the point of being explained on the back of a paper napkin then it is likely an endeavor of ego, pride or false hope. In any case, the situation being constructed or deconstructed will have a negative expected value right from the onset. In the spirit of simplicity being the basis of proficient market analysis, I present to you the only two charts you will need for the rest of April. Here is the Nasdaq Composite followed by the Nasdaq 100. Behold: click chart to enlarge...