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My Gut Feeling for Today, March 21, 2013

Editors Note: this week My Gut Feeling will be unprotected for all to read. Next week this featured commentary will be password protected and accessible only by Wall Street All-Stars Platinum Subscribers. You can subscribe here.                         

Welcome to March Madness which tips off today. The best stock pick for March Madness is always Buffalo Wild Wings (BWLD) followed by CBS (CBS).

After absorbing the Cyprus Madness and FOMC interest rate bracketology, the markets are in need for a little bit of sideways action. I am going to hypothesize that the weak results from Oracle (ORCL) last evening are likely to put a damper on the markets for the day, despite the S&P 500 (SPX) inching ever closer to that elusive all-time high.

Bloomberg ran an interesting story today noting how the S&P 500 Equal Weight Index (SPW) has already set an all-time high. The lesson is that equal weighting stocks might be a better strategy than having large out sized positions. My investment strategy is usually to hold about 30 -40 positions. When I initiate a new position it is for about 1 – 2% of the portfolio. I will then add or allow the position to grow on its own. Once a stock gets to over 5% weighting, I typically start to trim and look for new portfolio additions. I also close out positions that have met their price objective.

A few thoughts on ORCL are in order. Most pundits point to cloud computing as a reason that ORCL reported a less than expected quarter. I think that is a valid reason. However, I would add that ORCL, has grown primarily through acquisitions, rather than from organic sources. The company simply is unable to continue to grow by marginal acquisitions.

Overall, I expect a soft day, kicked off by the ORCL report and then by the basketball tip-offs  Let’s not forget though that some important economic data points – weekly claims, existing home sales and the Philly Fed – will be released at or before 10AM. These could drive some individual sectors.

Finally, check out my video with old friend Gregg Greenberg of TheStreet.com where I discussed Royal Caribbean Cruise Lines (RCL).



Disclosure: At the time of this commentary Scott Rothbort, his family and/or clients of LakeView AssetManagement, LLC was long BWLD and RCL stock— although positions can change at any time.                                                                                        

Scott Rothbort is also the publisher of the LakeView Restaurant & Food Chain Report, a newsletter focusing in on food, restaurant and agricultural stocks. You can subscribe at www.restaurantstox.com 

Chat with Scott all day in “The Finance Professor’s Classroom” with your Platinum subscription to Wall Street All-Stars.

You can email Scott at scottallstars@gmail.com


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