BlastInvest
Blast Investor Real-time Plus           by Henry Lu

Tort reform, USG,  next trade alert

12/15/2004

USG

Jumped nearly 9% today

Today the Blast Investor Model Portfolio jumped more than 4%, and the portfolio hits record high with about 55% of gain year to date. Part of the reason for big gain today is due to nearly 9% jump on USG, the biggest holding of the portfolio. News headline "Bush Urges Congress to Curb Asbestos, Medical Malpractice Suits" is all over Bloomberg, Reuters, etc.  Certainly USG investors are not blind to President Bush's talk.

In fact, over the past months, there has been lots of favorable news for USG shareholders. Tort reform and asbestos new law has been the talk of congress and the President.

I have discussed asbestos new law before.  Tort reform is another congress agenda aimed at limiting frivolous lawsuit. Tort reform new law will benefit USG equity investors as well if the endless lawsuit award can be capped. 

Subscriber question on USG short interest

qfhe wrote:
 I have a question about the short interest in USG.  USG short ratio of float is 52.34%. That number is extremely high. Could you please briefly explain the implication of the high short interest in this stock? Does that mean a majority of the general public is still not confident about the resolution of the Asbestos case? How risky is USG compared to other picks considering the high short interest?

Blast Investor answers:
It is not surprising to see that high short interest in USG. USG is surely a hated stock by public. You do not need to look at its short interest to get that. Just look at the PE of USG. A normal stock will not have that kind of low PE.

A value investor usually is against general public. It is unusual to find a great pick that is liked by general public. The important thing is that I and my subscribers have invested in it and we made huge money on it. Warren Buffett is shareholder of USG as well and Warren made huge profit in USG as well.

High short interest is just indication of general public opinion, which has nothing to do with the "true risk" of a company. By the way, I believe all the shorts in USG are wrong and they lost big money in USG and they will likely to lose more money ahead. (Note: which they did today).

Please check out hot list to get my opinion on risk/reward ratio of USG:
http://finance.groups.yahoo.com/group/Blast_Investor/

Best regards,
Henry Lu, the Blast Investor

Subscriber question on next trade alert and cash re-investment

Here is one question on next trade alert:
you haven't sent any alerts for buying into a stock since USG and Exx.A.  I think your model portfolio have cash since the sale of HRB and my understanding is that you always pretty much fully invested. So should we expect that you are doing intensive search and we will get such alerts soon?

Blast Investor answers:

Yes, model portfolio has room to invest into more picks and I am researching for stock picks every day. So far I have not found any interesting pick yet. However, it is unpredictable when I will send the next trade alert. Typically when I find new picks, and I believe the price is good for investment, I will send alert immediately without any waiting for next regular issue.  So just pay close attention to my trade alert.

Although full investing plus small leverage has been typical for the Blast Investor Model Portfolio,  there is no rush to invest into any more stocks if I can not find more promising picks. Sticking with current portfolio with some cash or room
is fine. Especially, the model portfolio is hedge fund style that allows small leverage, and it is already fully invested.  Safety and value is always first priority, full investing of cash is not.

More question: I missed USG, what should I do with more cash?


Subscriber question:
"I missed USG big run up, I have more cash for investing now,  should I invest more cash into USG?".  

Here is my answer on this issue:

Because I do not provide personalized investment advice, I can not advise whether you should or should not buy USG with more cash. Below is my opinion in general on this issue:

(1) There is no need to regret for missing a big rally, or for missing a big winner.  A successful value investor can always find the next big winner. US stock market is so big that investment opportunity is always available to prudent investors. Furthermore,  nobody is perfect.  I myself missed lots of big runs before. For example, I sold PTR right before it jumped up big, I purchased MLT (MUSA) at $6, sold at $10, and it jumped up to $18. All of old timers of MITBBS should know my investment record on PTR or MLT stocks in 2003 or before. 

Value investing is long term process. Even if you missed 2003 or 2004 winners, there will be next 5 to 10 years available for making big money ahead. Sure, you missed my past big winner, there will be more new picks next year and the current positions are not bad either.

(2) The real question is how you want to use BIRTP service. Mutal fund service is mainly for passive investors, BIRTP service provides flexibility for both passive investors and aggressive investors.

Check out our FAQ Question 5 on how to use BIRTP:  http://www.blastinvest.com/faq_RT_Plus.htm

The idea is that you decide first whether you want to be a passive investor or an aggressive investor. If you are not sure, you can try out first with small amount. For example, for small amount you passively follow the model portfolio, for another small amount you manage aggressively yourself. As time goes on,  you will know what you want to do.

BIRTP newsletter Technology Upgrade


In the next 1 month or 2, Blast Investor Real-time Plus will have major technology upgrade.  The newsletter provider will be changed from Yahoo group to BlastInvest in-house.  All the existing services such as archive, model portfolio, trade alert, hot list will be preserved and enhanced in the future.  We will send out further email notices to you when the change comes.



Blast Investor Model Portfolio Update

(as of 12/15/2004)

Model Portfolio - Performance


Portfolio inception date
 12/31/2003
Portfolio inception value
 $89,000
YTD Performance
 54.76%
S&P500 Index YTD Performance
 8.22%


Model Portfolio - Open Positions
Symbol Last Shrs Value Paid Gain
ADGO.OB 1.37 9,000 $12,330.00 0.78 $5,300.00 +75.39%
CHK 17.02 1,100 $18,722.00 13.90 $3,422.00 +22.37%
EXXa 1.47 6,500 $9,555.00 1.638462 -$1,115.00 -10.45%
LIBHA.PK 4.80 1,200 $5,760.00 5.10 -$370.00 -6.04%
NRG 34.31 670 $22,987.70 23.05 $7,534.20 +48.75%
NTES 51.39 150 $7,708.50 36.60 $2,208.50 +40.15%
SOHU 18.23 700 $12,761.00 24.882857 -$4,677.00 -26.82%
USG 36.62 950 $34,789.00 18.425789 $17,264.50 +98.52%
WLL 31.36 600 $18,816.00 22.683333 $5,186.00 +38.05%
$$CASH -5,694 -$5,694.00 - - -
10 symbols Total(USD):
$137,735.20




Model Portfolio Transactions


Date  Type Symbol Shares Price Comm Amount Notes
Nov 24, 2004 Sell HRB 350 47.35 10.00 16,562.50 - 12.31%
Nov 4, 2004 Sell NTES 100 46.50 10.00 4,640.00 + 27.05%
Oct 19, 2004 Buy EXXa 1,500 1.60 10.00 2,410.00
-
Oct 6, 2004 Buy EXXa 5,000 1.65 10.00 8,260.00
-
Oct 6, 2004 Sell NEN 100 80.00 10.00 7,990.00 + 48.15%
Oct 5, 2004 Buy USG 250 18.75 10.00 4,697.50
-
Oct 5, 2004 Sell NTES 100 39.12 10.00 3,902.00 + 6.9%
Sep 30, 2004 Buy USG 700 18.31 10.00 12,827.00
-
Sep 29, 2004 Sell NEN 100 79.65 10.00 7,955.00 + 47.5%
Aug 5, 2004 Buy WLL 250 23.50 10.00 5,885.00
-
Aug 2, 2004 Sell NEN 100 69.95 10.00 6,985.00 + 29.5%
Jun 17, 2004 Sell HCA 250 40.30 10.00 10,065.00 - 4%
Jun 17, 2004 Buy NRG 670 23.05 10.00 15,453.50
-
May 24, 2004 Sell ADGO.OB 13,000 1.55 10.00 20,140.00 + 98.7%
May 10, 2004 Sell HCA 250 39.97 10.00 9,982.50 - 4.8%
May 10, 2004 Buy SOHU 200 15.59 10.00 3,128.00
-
Mar 5, 2004 Buy WLL 350 22.10 10.00 7,745.00
-
Jan 26, 2004 Sell WRP 700 17.40 10.00 12,170.00 - 5%
Dec 31, 2003 Buy CHK 1,100 13.90 10.00 15,300.00
-
Dec 31, 2003 Buy NEN 300 54.00 10.00 16,210.00
-

Date  Type Symbol Shares Price Comm Amount Notes
Dec 31, 2003 Buy HRB 350 54.00 10.00 18,910.00
-
Dec 31, 2003 Buy NTES 350 36.60 10.00 12,820.00
-
Dec 31, 2003 Buy SOHU 500 28.60 10.00 14,310.00
-
Dec 31, 2003 Buy LIBHA.PK 1,200 5.10 10.00 6,130.00
-
Dec 31, 2003 Buy ADGO.OB 22,000 0.78 10.00 17,170.00
-
Dec 31, 2003 Buy HCA 500 42.00 10.00 21,010.00
-
Dec 31, 2003 Buy WRP 700 18.30 10.00 12,820.00
-
Dec 31, 2003 Cash In -
-
-
-
 89,000.00 Inception