Week 3 2012 Performance...Earnings Season in full swing

The portfolio actually started seeing some action this week as I started to get more defensive and finally had the opportunity to get into some names I have been eyeing for some time.  You will see a new category this week in addition to the long and option portfolio pieces there is now a short component.

I took action this week going after a few names that I believe are extremely overvalued.  Ever since Groupon went public a few months ago this has been on my radar screen.  The company does not make money and the valuation it received in my mind is completely ridiculous.  I wanted to short it from the very beginning but didn't as I watched the stock continue its downward trajectory.  I finally came to the point that I couldn't pass any longer as it's valuation still doesn't justify it's price.  Another recent IPO LinkedIn currently sports a Forward P/E of 150 which is out of this world.  I just don't see how the stock can live up to such high expectations (think tech bubble in 1999/2000). I like the product just not the stock.  It will be interesting to see how much Facebook is valued at when it goes public later this year and if it will be able to live up to expectations?

I exited out of the natural gas position UNG this week as I have no insight as to when it will find it's bottom.  I still believe that long-term nat gas is a solid play but with all of the supply coming on board the price has no where to go but down.

Buffalo Wild Wings BWLD is now apart of the options portfolio of the fund.  This is the time of year where people are heading in to watch the final days of the NFL season with March Madness just around the corner. I also see this as a play on lower input costs i.e. chicken as well as any type of positive news in consumer spending and confidence.  BWLD also has a great growth story intact as they continue to build out new locations.  I know that I could certainly use one by our new house.

Here is the link to this week's Economic Calendar.  Besides the continued earnings parade this is a big week for data.  There is a  FMOC  meeting that starts on Tuesday with the rate announcement on Wednesday, consensus estimate is for no change.  On Thursday you get durable goods orders, weekly jobless claims, December new home sales, and the weekly Leading Indicator number all before or just after the opening bell so expect some price action early on in the trading day.  The week wraps up on Friday with the release of the first revision of Q4  GDP  and the University of Michigan Consumer Sentiment with consensus estimate being unchanged.  Here is a link to all of the corporate earnings releases.

Again I think it will be another week where we wait to see if any of our orders hit and keep a tight watch on the earnings releases of specific companies in our watch list.  I see no need to get extremely offensive here but instead to continue to build some defensive positions and possibly start taking some profits.