In general I try to rein in my natural optimism when posting about companies I own. I prefer to focus on the downside and let the upside take care of itself. I do try to provide balanced input and avoid hyperbole. But not today. For once I want to unleash my wildest optimism and ride my unbridled enthusiasm to a heady conclusion.

Last month I mentioned taking a small position in Neptune Marine Services to give me the right to participate in their SPP. I followed that post up with this initial analysis on NMS. The offer closes this Friday and after my heroics, or was it histrionics, with the ANZ SPP a few weeks back I decided to give myself a couple days leeway. Today is pony up day and that is what I’ve decided to do. As always this is not recommendation.

I still don’t feel comfortable investing in NMS and am breaking a personal rule by investing when I have doubts. One of my favourite quotes is capital is scarce and investment opportunities are plentiful. Warren Buffett expressed the same sentiment when he compared investing to baseball without strikes. He said you can wait for the right pitch all day and there is no penalty other than lost opportunity. So, when the fielders are asleep, step up and hit the pitch.

S&P 500 monthly data 1872-2009 highlights probability of up months coming. Could the market really not be random and patterns really exist?

The FI Portfolio continues to hold onto it’s outperformance over the ASX200.

We may be seeing green shoots or maybe they are yellow weeds as Roubini suggests. To me that’s all noise and I wonder why so much of the blogosphere and media is full of speculation on such matters. As even the best economists have a poor predictive track record, why should an average punter like me even bother thinking about it? There are easier and more profitable things to think about, but each their own.

Perhaps some people will ask why bother looking at historical market data. My simple answer is big picture reassurance. The main reason is that I do not want to get bogged down in the here and now of unemployment reports and the like, such stats are psychologically damaging and cloud the mind. They induce fear and you don’t want to go there. The conspiracist in me believes they are promulgated to confuse poor investors and make them freeze instead of act. I say, stand on giants shoulders to get a better view of the future so that you may act now.

As a part owner of Amgen and nephew to a breast cancer sufferer I was happy to read Denosumab demonstrated superiority over Zometa. As an option seller it sent a shiver down my spine.

I prefer to invest in companies that are both self funding and creating value, but I occasionally dip my toe into unabashed growth stories like Neptune Marine Services.

I know the synthetic theory of Puts and covered calls and I sell both naked puts and calls on stock I own. I have never entered a covered call as a Put is the better trade; less expensive and usually marginally more profitable. Believing writing covered calls is conservative made it as my fifth biggest mistakes in option trading. But I always wonder when I sell a call, “what the hell am I doing!” Why don’t I just sell the sell the stock and sell a put.

Bill Gross in his wonderful July missive suggests, “short-term policy rates will be kept low for longer than cyclical norms, and the outlook for risk assets – stocks, high yield bonds, and commercial and residential real estate will involve just that – risk. Investors should stress secure income offered by bonds and stable dividend-paying equities.”

Steve Johnson at the excellent Bristlemouth blog declared it’s Time to Get Defensive (again).

FormFactor bucks the downward tech trend.

Portfolio Manager Steven Glass discusses Hunter Hall’s investment in Biota and the implication of swine flu.
A few key points from the video:

Releanza is one of two antivirals to treat HINI (swine flu)
If HINI mixes with seasonal flu which has resistance to Tamiflu then there is only one antiviral left, Biota’s Relenza.
LANI is main drug in pipeline. Finished PIII is Japan [results out soon]. One puff. [HRV is the other main drug in Biota's pipeline.]
Should have $85M cash as of June 30. [Biota had $55.4 cash at December]
Expect return of cash via …