Pettit Funds

I’m selling off half of my K-Tron (KTII)–up 40% since I purchased it for the second time last December–and I’m going to spread the proceeds amongst International Assets Holding Company (IAAC–another repeat buy), Overhill Farms (OFI), and EnGlobal Corporation (ENG). Those latter two are practically “penny stocks” and all three are rather thinly traded for now–hence my decision to diversify amongst the three. I’m recovering nicely from my dismal lows back in March, but there is still a long way to go to achieve my former glory. Hopefully, these picks will help me get there. Good luck!

I saw a clip on CNN this morning about the possibility of a special tax on fattening, non-nourishing foods and found the idea intriguing. We tax cigarettes and alcohol, I thought, maybe there is something to be said about taxing other harmful products to 1) discourage their use, and 2) use the funds for health care or whatever.

Yeah, this–like many taxes–disproportionately affects the poor, but…they also have disproportionately more problems with obesity because of buying cheap non-nutritional food.

Am I just being my usual “tax happy” self? Bah: I get a kick out of the One-Issue Republicans chanting “Lower Taxes” out of their own basic human greed (”More money in my pocket!”), while supporting policies that take many more multiples of that money out of their eventual pockets. For example, it is said that the Iraq War will end up costing us $1 trillion when you take into account the future medical expenses for our wounded troops. Divide this by the 300 million people in our country and we’re all going to pay an extra and unnecessary $3000+ just for that war–which will eventually have to be paid for during the Obama/Biden, Palin/Limbaugh, and Jenna Bush/Blanket Jackson administrations. (Never mind that pretty much all of us lost more of our net worth that last year of the Bush Administration than we had paid in taxes during his eight-year reign…)

From the FREAKONOMICS BLOG:

From a Wall Street Journal article by Betsy McKay come these tantalizing facts (emphasis added):

The medical costs of treating obesity-related diseases may have soared as high as $147 billion in 2008, the Centers for Disease Control and Prevention said Monday, as its new director set a fresh tone in favor of more aggressively attacking obesity.

The cost of treating obesity doubled over a decade, signaling the rising prevalence of excess weight and the toll it is taking on the health-care system. The medical costs of obesity were estimated to be $74 billion in 1998, according to a study by federal government researchers and RTI International, a nonprofit research institute in Research Triangle Park, N.C.

The findings were released at a conference on obesity held by the CDC in Washington, D.C. The prevalence of obesity rose 37 percent between 1998 and 2006, and medical costs climbed to about 9.1 percent of all U.S. medical costs, the researchers said.

Obese people spent 42 percent more than people of normal weight on medical costs in 2006, a difference of $1,429, the study found. Prescription drugs accounted for much of the increase.

We’ve blogged here variously in the past about the many possible contributing factors that have made it so much easier to get obese these days. That said, it is a self-inflicted condition any way you look at it….[Rest of article]

Rats, just when I’m starting to get close…

From the FREAKONOMICS BLOG:

I love receiving senior discounts. I got 15 percent off Wednesday’s chamber concert and 30 percent off Friday’s hot-springs entry.

These discounts represent demand-based price discrimination. Theory says such discrimination is based on employers’ perceptions of different demand elasticities across demographic groups. But are today’s seniors’ demands more elastic than those of other adults?

Their more elastic demand can’t arise from lower incomes: In 2007 the poverty rate among adults aged 19 to 64 was 15 percent, and among those 65-plus it was only 13 percent….[Rest of article]

Market up nicely so far today.

I’ve decided to sell off some of my earlier winners and diversify into
LMI Aerospace, Inc. (LMIA).

I’ve always been a little nervous about investing in technology stocks (I share that with Buffett), and, indeed, I don’t think I’ve done very well there.

Still, I don’t feel I should entirely neglect it and this one did show up on my screen.

Good luck!

For the first time, I’m going to take a chance on a Chinese stock: China Automotive Systems, Inc. (CAAS).

They popped up on my “screen” looking very intriguing, so I actually took a fairly large position in it this morning–after selling off a portion of some of my recent “winners” (I sold off about one-third of my MFW and NVEC, which have been doing very well–I wanted to lock in some of the profits and raise money for the CAAS purchase).

Lots of people buying cars in China these days.

Good luck!

From the NY TIMES:

The debate over economic policy has taken a predictable yet ominous turn: the crisis seems to be easing, and a chorus of critics is already demanding that the Federal Reserve and the Obama administration abandon their rescue efforts. For those who know their history, it’s déjà vu all over again — literally.

For this is the third time in history that a major economy has found itself in a liquidity trap, a situation in which interest-rate cuts, the conventional way to perk up the economy, have reached their limit. When this happens, unconventional measures are the only way to fight recession.

Yet such unconventional measures make the conventionally minded uncomfortable, and they keep pushing for a return to normalcy. In previous liquidity-trap episodes, policy makers gave in to these pressures far too soon, plunging the economy back into crisis. And if the critics have their way, we’ll do the same thing this time.

The first example of policy in a liquidity trap comes from the 1930s. The U.S. economy grew rapidly from 1933 to 1937, helped along by New Deal policies. America, however, remained well short of full employment.

Yet policy makers stopped worrying about depression and started worrying about inflation. The Federal Reserve tightened monetary policy, while F.D.R. tried to balance the federal budget. Sure enough, the economy slumped again, and full recovery had to wait for World War II.

The second example is Japan in the 1990s. After slumping early in the decade, Japan experienced a partial recovery, with the economy growing almost 3 percent in 1996. Policy makers responded by shifting their focus to the budget deficit, raising taxes and cutting spending. Japan proceeded to slide back into recession.

And here we go again.

On one side, the inflation worriers are harassing the Fed. The latest example: Arthur Laffer, he of the curve, warns that the Fed’s policies will cause devastating inflation. He recommends, among other things, possibly raising banks’ reserve requirements, which happens to be exactly what the Fed did in 1936 and 1937 — a move that none other than Milton Friedman condemned as helping to strangle economic recovery.

Meanwhile, there are demands from several directions that President Obama’s fiscal stimulus plan be canceled…[Rest of article]

Leviticus 27:3-7 (Sorry, ladies–but that’s why you get treated like crap by the church…)

Well, I’m going to come out from under the bed and try and give you some picks again.

My last one was back in February, when I finally “lost my faith”. I’ve actually made several selections for myself since then (but not posted here), and all have done fairly well. CALM, recommended here on Feb. 19, is up only 3%, but SBS, recommended the same day, is up 52%. The market as measured by the S&P 500 is only up 16% since then (through end of May).

Unpublished picks since then all have made money: CVA and AMX, both picked on March 11 are up 18% and 46% respectively; STLD, CLF, MBT, and POT (yes, I scored some POT) are up 79%, 54%, 36% and 46% respectively; IAAC bought on April 6 is up 37%; TLVT, bought April 23 is up 22%; and AZZ bought May 14 is up 23% (all through end of May). Having quite a run… (Frankly, it would seem that my forte is picking winners in “up” markets, as I barely hold my own when the market goes down for any length of time).

So let’s try this again: Today’s pick is Brasil Telecom Participacoes S.A. (BRP), which I actually recommended back in June, 2008, when it was $82 per share and it promptly went down to $39. Oops. It’s at about $45 per share now and I’m going back in. I’ll be taking a smaller position in EZCORP (EZPW), which is another stock that I recall having owned a while back and not having done well with. They run a chain of pawnshops. This is a risky one and my first foray back into buying in the financial sector in a while. I feel good about the Brasil Telecom, though.

Good luck!

From the BBC:

The Church of Scientology has gone on trial in the French capital, Paris, accused of organised fraud.

The case centres on a complaint by a woman who says she was pressured into paying large sums of money after being offered a free personality test.

The church, which is fighting the charges, denies that any mental manipulation took place.

France regards Scientology as a sect, not a religion, and the organisation could be banned if it loses the case.

It will be the first time the church has appeared as a defendant in a fraud case in France. Previous court cases have involved individual Scientologists.

The woman at the centre of the case says she was approached by church members in Paris 10 years ago, and offered a free personality test. But, she says, she ended up spending 21,000 euros ($29,400, £18,400) on lessons, books and medicines she was told would cure her poor mental state….[Rest of article]

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So here I go again “sticking up for” Scientology, despite being notoriously anti-all-religions.

Don’t get me wrong: The Scientologists are as misguided in their beliefs as anyone.

But you’ve got to be kidding me: Here in France we have a country of good witch-burning Christians (Joan of Arc, R.I.P.) saying that giving a lot of money to the Scientologists is tantamount to being a fraud victim, while thumping their Bibles and asking people to give their “tithes” (10% of their income) PLUS “offerings” to the Man Who Walks On Water.

Doesn’t this kind of precedent open the doors for the prosecution of our good old American televangelists who plead with little old ladies to give, give, give so that Oral Roberts won’t be “called home”?

I have old clients (and family members, come to think of it) who tithed all of their lives despite being on the wrong side of the Federal Poverty Guidelines–and who gave a lot more to their Christian church over the years than this poor, deluded French woman, and with nothing more to show for it than extra “Stars In Their Crown”.

But fools and their money are soon parted, and it should remain a god-given right to try and buy your way into heaven–generally considered a good investment what with the whole mansions and streets paved with gold thing going. If you’re going to start prosecuting churches for fraud, well…that’s a pretty slippery slope now, isn’t it?

(A tip of the hat to Uncle Rich for the “heads up” on this story).