Author: Yale Bock,
Y H & C Investments
Covestor model:
GARPSentiment has changed dramatically in the market as we head into the first Friday in August. What is weighing on the market? A better question is what is not weighing on the market? First, the sense that the European sovereign debt crisis has been bungled by the politicians has turned any asset manager on that continent into a seller. Second, the way our politicians handled the raising of the debt limit inspired no confidence from any rational person living in the United States. Third, almost every piece of economic data in the United States has recently shown a slowing economy. In combination, the investment world is now fearful. Meanwhile, my portfolio continues to underperform – which is the bottom line in the investment world.
Portfolio Holdings
1. Gigamedia (NASDAQ: GIGM): The stock continues to underperform and the company will announce earnings on August 15, 2011. Hopefully we will see improved revenues, a reduction in cash burn, and some more information on how their Asian businesses are performing. Also, of critical importance is an update on the Spongebob game release – when will it ever happen? The Everest Poker division is of some interest, but I think better information on monetizing their investment portfolio and how the internal development of games is progressing is more significant. At some point, either this company has to produce revenue producing games or it ceases to exist.
2. Digital Globe (NYSE: DGI): The company reported revenues and earnings of (.01) cents per share for the 2nd Quarter of 2011. Revenue came in at almost 82 million dollars, and for the first six months of 2011 versus 2010, cash flow from operations was up to $105 million from $57 million. The thesis for owning DGI remains the same – private and public enterprises all over the globe will continue to demand high quality pictures from satellites due to security and legal issues. The growth story here remains in place.
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