Weekly Summary

It's the end of a turbulent week in the markets, and my portfolio has taken a $500 dive:


Nothing has done particularly badly: Krispy Kreme and Freddie Mac have dropped about $100 apiece, and the rest of the loss is forty dollars here, sixty there, twenty there - every single stock is down from where it was last week.

In brighter news, much of the turbulence has been over the federal bailout bill, which has finally been passed and signed. Like many investors, I have mixed feelings about it - whether it was the "right" or "wrong" thing to do from an ethical perspective, and whether it will make any difference at all to the markets, what with other economic indicators sagging ... but what's done is done, and we'll just have to wait and see.

Weekly Summary

In general, it's been a good week for me - transfer of additional funds into my portfolio to take a risk on Freddie Mac has diluted my return ratio, but it's still looking pretty good.



My sickest dog (MIVA) has pulled back from the edge of a stop-loss sell order, and a handful of them are doing well - especially Krispy Kreme. I'm at a loss to explain that, in the absense of any market news - but I don't feel the need to worry about a ray of sun in an otherwise stormy market.

Weekly Summary

This week, I'm back in the black by an appreciable margin, largely due to my recent investment in eTrade and the continued progress of Krispy Kreme:



While the beleaguered big-board stocks have been making sufficient gains, my "true" penny stocks are continuing to flounder, with Miva dancing at the edge of my tolerance for bad performance - but in the end, my losses and gains have largely balanced one another out, and I've yet to stumble across a multi-bagger this year.

Weekly Summary

Another week has gone by, and the ups and downs in my holdings have once again balanced out:


SOYO has puts its toes across the point of no return (a 50% loss) and I will be looking to unload it and cut my losses unless there's some significant development in the next few days; GOIG has been there for a while, but it's so thinly traded that it's impossible to unload my shares at any price.

On the brighter side of things, I'm beginning to consider when to take profit from KKD, which has shot upward but seems to have reached a new plateau, and FEEC, which I already cashed out my original investment, and whose star also seems to be fading in recent weeks.

Weekly Summary

I've made a few acquisitions this week, moving some of the funds that were laying fallow in my account into companies that I hope will be more productive - but other than that, the overall value of hasn't changed dramatically from last week. Given the turbulence in the market, breaking even feels like a small victory


About half of my holdings are now big-board stocks that have gone south: Revlon, Rite Aid, Blockbuster, and Krispy Kreme. This is unusual, as my typical tactic for a penny stock portfolio is to invest in smaller firms whose growth will come from scaling up their operations rather than larger firms who are seeking to solve balance-sheet issues - but then, I'll take profit however I can get it.

Weekly Summary

It's been another up-and-down week, and with the exception of Krisy Kreme (which spiked on their earnings report), there's not been a lot of motion in either direction:


I had meant to open a few more positions this week, as about a third of my portfolio is sitting fallow in cash, but none of the stocks on my watch list seem to be sparkling, and nothing new has come to my attention of late.

KKD - on the rise

Since posting a $4 million profit, shares of Krispy Kreme has been headed north for the past three days - from an opening price of $4.40 on Monday to a close of $5.20 today, and it seems to be gaining steam.

Some pundits are cautious, and cite the past quarter's success as a fluke rather than a sign of recovery - but then, I bought in because I felt it was grossly undervalued: the stock was trading at more than $10 a share just one year ago and had fallen to that level from nearly $45 before the financial woes of rampant growth gutted shareholder confidence.

The firm is still going strong, and the local franchises don't seem to have suffered much - so I still have a great deal of faith that the corporation can straighten out its balance sheets and pull through.

Weekly Summary

In spite of the turmoil on the big boards, my portfolio has edged back into the black this week:


This week's biggest gainers were KKD and FEEC - but I can't see a reason for that: neither has updated their financial statements or announced anything particularly positive, and the trading volume has not been unusual for either.

Krispy Kreme and Law Enforcement Officers Team Up

This is more in the nature of corporate PR than anything to do with the financial markets, but I couldn't help laughing:

Krispy Kreme Doughnuts, Inc. and local law enforcement officers have united again this year for the annual Cops on Doughnut Shops program to benefit Special Olympics. Police officers will sit on the roofs of local Krispy Kreme stores throughout the U.S. to raise funds for the Law Enforcement Torch Run and increase awareness of the Special Olympics movement.

I laud them both for supporting a worthy charity, but I can't help wondering what kind of structural damage is going to be done when the cops who usually spend their time sitting inside donut shops hoist themselves onto the rooves.

Worst Stock in the World?

Today, Tim Beyers of Motley Fool labeled Krispy Kreme as their "Worst Stock in the World" - indicating that ...

Over the year ended Oct. 28, 2007, the date of the most recently available report, Krispy Kreme paid $12.4 million in interest expense on an average debt balance of $103.2 million. That's 12%. I know credit cards that charge less than that.

Krispy Kreme and its still debt-dunked business model ... Wednesday's Worst Stock in the CAPS world.

Following their announcement this morning that their cost of debt will rise another 2%, the price of the stock plummeted.

I'm not running scared - industry wags have been wrong before, and the data this one cites is over six months out of date. Thus far, my losses on KKD are less than five percent, which is well within my level of tolerance for a long position such as this.

Krispy Kreme Elects New Chief Executive Officer

In a press release dated January 7, Krispy Kreme announced:

[The Company's] Board of Directors has elected the Company's Chairman of the Board, James H. Morgan, to the additional positions of President and Chief Executive Officer. ...

Morgan brings over 25 years of management experience to the Company, including his most recent role as Chairman and Chief Investment Officer of Covenant Capital, LLC, an investment management firm which he founded. Previously, Mr. Morgan served as Chairman and Chief Executive Officer of Interstate/Johnson Lane, an investment banking and brokerage firm, which was acquired by Wachovia Corporation in 1999. After the acquisition, Mr. Morgan served as Chairman and Chief Executive Officer of Wachovia Securities, Inc.

Normally, I'm less than thrilled when an accountant is given the CEO's chair - it is an indication that the company is no longer growing its markets, but is instead focusing on its capital structure. At best, that means cutting costs to make operations more efficient, which improves the bottom line, but does not result in any real growth in sales.

For a penny stock, especially one that doesn't have sufficient income to cover expenses, that can be the kiss of death, but in this instance, it's a very wise move. Krispy Kreme has had phenomenal growth over the past few years, and their top line is impressive. However, their weakness is inefficiency - so at this moment in time, getting an accountant to clean up the books and streamline operations is critical, and growth in sales could be detrimental.

In the short run, cleaning up the books and streamlining operations can ensure that more of the top-line revenues end up as bottom-line profits ... and once they've got that straightened out, they can rotate in a new chief who's focused on real growth.

Krispy Kreme (KKD)

Company:	Krispy Kreme Donuts
Web Site:	http://www.krispykreme.com
Purchase Price:	$3.11
Current Price:	Click Here

Krispy Kreme makes some of the finest donuts on the planet. The company has been in business since the 1930's, but only recently wet public and began to expand their chain nationally and internationally.

I bought into this company because they have a long track record of success, an the opening of a new franchise always causes a mob scene and makes the local news. They're having some growing pains, but I expect they will recover and the stock will return to its previous levels ($12 to $15 per share).

This is another long-run stock, which I will hold indefinitely.