As I mentioned yesterday, I am out of settled funds and have three open positions. So, we are going to enter one new position that isn’t good for an exit till next week to cover that issue. As for the three positions, first off we have our Play of the Week in Advanced Micro Devices (AMD). We got involved at 7.48 and sold half at 7.78. Last night, AMD reported very solid earnings with an EPS of 0.11 vs. the expected 0.06. The company also had record revenue. Yet, the stock is down in pre-market slightly. I am selling out of the gate. We are in bad shape with Bank of America (BAC). We got involved yesterday at 15.56. We are going to take a large loss. Despite beating earnings 0.27 vs. 0.22 and recording great profits, investors are not happy. Finally, I am going to close the position on Marriott this morning as well for a slight loss.

This is one of the worst days for me ever as far as investing goes. We will try to salvage this with a new position and a Long Term Investment. AMD is the discerning one. They had recored revenues. They beat earnings when we remove one-time charges, and they have great outlook. 

Good luck to you guys…

 

Long Term Investment: Paychex Inc. (PAYX) 

Paychex Inc. (PAYX) is involved in the outsourcing of payrolls. The company focuses on outsourcing payroll for small to medium-sized businesses that have around fifth to 100 employees. The company was founded in 1971 in Rochester, New York, and it was grown in 1979 by consolidation 17 payroll processors. The company services over 550,000 clients. The company is the second largest payroll outsourcing firm behind Automatic Data Processing Inc. (ADP).
 
Thesis
 
Paychex is a leader in a fairly uncompetitive industry with a wide economic moat that is created by the company’s significant competitve advantage and top notch brand image. The cost of switching payroll processors and high scalability gives the firm a significant advantage of any firm entering the industry. Further, the company has the respect of thirty years of business that have allowed it to grow and keep customers. Small businesses also are less likely to take on new businesses since margins are smaller on small businesses and do not wish to take on new costs.
 
Paychex also has a really low cost of doing business once it is established. The ability to easily…
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