What’s Working, What’s Not…

With one week left in Q2 of 07, its time to review this quarter’s trade action. This quarter unfolded with some themes gaining traction and some faltering, then stalling. They work until they don’t. In the ‘hasn’t worked lately’ category is precious metals, gold (GLD) and silver (SLV) mining stocks (AUY) and (GFI). Although GFI just gave a buy signal. Our top gainer for the quarter has been EMC. EMC seems like an obvious investment to profit from growth in online storage fueled by the popularity of cell phone pictures and videos, YouTube, blogging and MySpace data demands. We nailed the bottom when EMC dipped to $13 and snapped up shares for two accounts I manage. Lately the stock has been flirting with $18. On the long term chart (right side) it’s easy to see it running to $30 on continued market strength.

The second theme that is working is CHINA. Our current China theme holdings are CNOOC Ltd. (CEO), the Chinese oil company that has a monopoly on half of all oil pumped from Chinese waters. Then there is Mindray Medical Intl. (MR) the Medical Diagnostic manufacturing company that is growing revenue and profits at a healthy clip. Taiwan Semiconductor (TSM) is about to increase manufacturing capacity in a big way in the second half, and Home Inns & Hotels (HMIN), is building its chain by leaps and bounds in China.