Do My Ragamuffins Stir The Pot?

Now’s the time to run paper portfolios on a handful of ragamuffins that you think are potential turnarounds. I won’t bet on just one or two plays. Carry a dozen if you can find them. In the big recession, 2010,  I saw my plays in Lehman turn to dust but the preferred stock of Bank America was a double. Several plays today seem candidates for the junk pile. I’d include Cleveland Cliffs but I’m not giving up on a steel turnaround!

My sensitivity to entry points dates back to picking up Nextel at 3 dollars a share. My son, Scott, was working there in marketing. Nextel was an early-on player in cellular telephones, completely missed by The Street’s players. Thinking then was cellular phones were a fad and would fade out. Actually, it was the advent of a major new industry. I sold out my Nextel stock at $33. 

A fair question is do you commit serious money now in ragamuffins or just play money? As yet, my qualifier is Macy’s which pays a sizable cash dividend. In a serious recession Macy’s could see trouble, but that’s not my call. In a zippy setting,  Macy’s could earn over $2 and sell in the twenties, nearly a double from here.

My energy play is Carl Icahn’s collection of secondary properties, IEP. This is not analyzable like Exxon Mobil or Buffett’s Occidental Petroleum. Just another angle on playing oil futures where they can take down your pants, overnight. 

There are GDP companies with dividends selling at 10 bucks, too. Ford, for example. Here we need to see a strong recovery in consumer spending. The auto industry is viciously cyclical and Trump’s tariffs quite damaging. Surprisingly, General Motors hangs in. I can’t model Tesla’s operations so I don’t play in that game. 

Cleveland Cliffs, a steel operator, is a stock where you can build an earnings model based on its steel production numbers. So far, there’s still plenty of worldwide steel over-capacity. I paused when I saw U.S. Steel gobbled up. 

Remember X was a blue chip decades ago. Management paraded in double-breasted sharkskin suits and starched white shirts. I found they weren’t interested in Jewish College graduates for their training programs. This goes back over 50 years. 

I’ve got Rivian on my list,  the struggling electric car producer. Can they break through to profitability? It stays as a minimal position. 

Lemme go back a couple of years when I chose Halliburton as a recovery spec. It got through the slough off in oil drilling and exploration. I am about to buy HAL, a 

rank play, on rising oil drilling and exploration activity, worldwide.

I could paint an economic scenario where all this chancy paper declines 50%. Assume no economic recovery and Trump’s mindless tariffs stall out the world economy. What would happen to growth stocks? They’d get chopped in half, too. I own Apple, Amazon and Disney. Not exactly undiscovered and plenty volatile.

My wrong-footed entries so far include Macy’s, Cleveland Cliffs and Rivian. Is Ford my next casualty? Quién sabe.  

Unless we see easier money soon, there’s nothing in place to carry a bull run. I looked at Ford, 11 bucks, generating no interest. The most exciting thing Ford did was introduce its Ford Falcon economy station wagon, well over 50 years ago. 

All my goods are covered with the patina of a checkered past and must earn their way back to acceptability.