January 5, 2011
Comparing your third quarter return to your enclosed year-end return should evoke a positive feeling. We have bounced nicely this last quarter. Since the August lows, we’ve rebounded considerably, but we’re just getting started. Every day is a decision about whether to continue to own the companies in our portfolio or to take a swing at new investments. UniPixel was one in which GCM decided to make a sizeable investment. It’s an exciting company that is a leading producer of Performance Engineered Films™ (PEFs) and in the past two months I’ve met with all of the key players between New York and the Houston headquarters. (FYI -To the naked eye, their PEF looks like a normal plastic sheet, resembling something you’d place on an overhead projector.) Here are some noteworthy facts:
UniPixel designs, develops and produces PEFs for industrial use in the following categories and markets:
Flexible Printed Electronics: for Touch Panel Displays (UniBoss), Antenna (RFID) and EMI/RFI Shielding.
Optical Films: for Fingerprint Resistant Films (FPR), LCD Backlights, 3D Films (without glasses)
Energy Efficiency Films: for General Lighting, Solar Panels, Transportation Deicing and Anti-glare film.
Common applications for the FPR would be for use with a smart phone, laptop, or iPad – any glossy surface where prevention of fingerprints and smudges is important. It’s currently available for consumer purchase through Amazon.com. The reason for taking a large stake in the company (approximately 7.5%) is due to its flexible printed electronics – UniBoss in particular. This microscopic, copper-infused film will be used in the touch-screen industry. It can eventually replace the expensive (and rare) indium tin oxide (ITO) that currently provides the conductivity required by most touch-screens (think iPad). Thus far, UniPixel is a very well-kept secret. Keep an eye out for new business developments over the next few months.
Calcium, which may prevent some dietary fat from being absorbed, is a weight-loss weapon. In a recent study, dieters with the highest calcium intake from foods lost 60% more weight than those with the lowest intake. Aim for 1,000 mg a day in the form of food rather than supplements.
Hop on the massage table now to stay out of the sick bed later. Massages may help you fend off the flu. People who received a 45-minute Swedish massage had an 18% increase in infection-fighting white blood cells. Deep tissue massages may move white blood cells from one’s lymph nodes into the bloodstream. And my wife thought I did this for relaxation only!
Snack attack…. If it’s cream-filled and sold in a convenience store, skip it!. The phosphorus compounds used as additives in junk food (like good ‘ol Twinkies) may raise your risk of cardiac and kidney diseases. Scan ingredient lists: The additives go by monikers such as disodium phosphate, monocalcium phosphate, and sodium aluminum phosphate.
Some Investing Tips for the Kids/Grandkids….
This past year I was interviewed by several college students who were interested in my profession. Specifically, they wanted to know: how I discovered companies, what books/magazines/newspapers I read, why (and when) a CEO or CFO will talk to me and what types of financial analyses I perform. It was an interesting and fun exercise for me, to say the least! (This sudden attention from those students prompted me to establish Roth IRAs for my OWN college kids as a tool to get them interested in some of our companies.)
Here is some wisdom that I shared with them (Feel free to pass it on):
1. Investing is not for the wealthy – it’s for everybody! Be curious– read everything (Popular Science, Popular Mechanics, Scientific American, Men’s Health, WSJ, Barrons, The Economist….)
2. Never spend your gas money – once you have disposable dollars (money that is not required to live), open a low expense, on-line trading account. Wait until you have enough money to buy 2 or 3 stocks, so that you can diversify. There is nothing worse than buying a single stock that performs poorly. This can turn someone away from the market for a long period of time.
3. Never get too excited or fall in love with a company. This can blind you to the cons because nothing is perfect. Liking a certain “brand” DOES NOT necessarily translate into a good investment (due to timing or financials). Try to take all emotion out of investing to clearly see if the company producing your “brand” makes investing sense.
4. The most important thing is to rely on yourself and do not invest in something because your buddy Jim does unless he can spell out, specifically, why he put his money there. If he’s got you enthused – do your OWN research and then draw your OWN conclusions.
5. Once you make a commitment to spend your hard earned dollars (or that birthday $$ from Grandma), keep an eye on the company, its news, the competition, etc. Don’t fall asleep!
6. Get started as soon as you can and try to save a minimum of 10% of your income. Never put it (the 10%) into the checking account, else you will spend it, not invest it.
Barring any unforeseen world events, I am feeling pretty excited about our prospects in 2011. We’ve shown patience with a number of companies and now believe that we will strike gold with one or more of our names. This is not just wishful thinking but based on the notion that their work has been in preparation for success.
What looks like failure is quite often that we are simply….. just too early!
May the New Year bring health and prosperity for all!
Goldberg Capital Management is an investment adviser registered with the State of CT Department of Banking. This Newsletter and its contents are for informational and educational purposes only. You alone will need to evaluate the merits and risks associated with the use of the information provided herein. Although this Newsletter may provide information relating to approaches to investing or types of securities and other investments you might wish to buy or sell, no information provided in this Newsletter is intended or should be construed as an investment recommendation or endorsement from Goldberg Capital Management. Please remember that past performance is no guarantee of future results.