Final Segment 1 Title: 'The Sell Block' .  .  .  .  . Featured Stock(s): International Game Technology (IGT) (but not to sell it - to buy it) See IGT's official website here. See the Yahoo! Finance profile for IGT here. See Opening Segment 2, below...

        

JJC:   Miscarriage of justice in the Sell Block!... DNA testing reveals it is innocent and must be sprung!...

That's how I feel today about International Game Technology (IGT), at $46 and change... and, in a tough market, just a dollar below its 52-week high...

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I manage a public portfolio... an actual cash portfolio for charity, not for personal gain, as so many of my devoted and loyal critics like to claim... where I issue bulletins before I buy or sell a stock...

The stock that has been wrongly incarcerated, IGT...  That's a name that my trust had owned for eons, because it's a tremendous play on the two most salient, pathetic, and bankable traits of our late-stage capitalist society... our collective addiction to gambling, for which IGT makes the machines that give us a much-needed fix... just pull that lever and you'll feel much better...  and, of course, what always goes along with gambling, and always makes you money when you find a stock to play it... uberous...

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But, a few weeks ago, after it reported an in-line quarter, I decided it was time...  it was time to ring the register and take profits in IGT...

One of the great things about having an online diary, where I recount every single move I'm about to make, is that I can read the verdict back, and analyze my own judgment, and see where I might have gone right or wrong, and beat myself up about it...

I made a judgment to throw IGT into the Sell Block because, as I wrote, I'm worried that casino spending could be one of the next areas where we could see a slowdown.  That could prompt casinos to spend less on capital investment...

I was concerned that the company had reported an inline quarter only...  and that its revenues had fallen $9.1 million short of expectations.  That was enough for me...

That, plus it was clear from the price action in the two casino stocks I follow, Wynn Resorts (WYNN) and Las Vegas Sands (LVS)... both of which have just lost 60 points from their high... that nothing good could come from this IGT anymore.

Yes, I extrapolated those two stocks, and the inline gains that they were having in the Chinese market, and decided that it was only a matter of time before IGT got sold down on fears of the end of the big, worldwide casino boom...  

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Talk about a bogus incarceration...

A few days after I put IGT in the slammer, and sold the stock for an admittedly nice gain for the charitable trust, voters in not one, but two, states - California and Florida - passed separate referenda...  that would allow a total of 23,000 new machines to be installed.

Suddenly, out of nowhere, came some big contracts that none of the analysts were looking for...

The Indian tribes that got the approval in California can get those machines shipped for IGT's next quarter... and the Florida casinos could be getting their's just as quickly...

They allowed the Seminoles to buy 15,000 machines...

I should have been reading the front pages of the Sacramento Bee, and the Tallahassee Demochat... but, instead, I was reading Wall Street research...

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The result?...

Suddenly, the numbers I used to indict and imprison IGT - the so-so numbers - turned out to be way too low, as the analysts were not including any wins from these referenda...

IGT then zoomed 7 straight points, as all numbers had to be raised.  I was thinking about Macau and Vegas, and over-saturation...   I should have been thinking tribes and ballots and higher numbers, which were part of the product-cycle story... the story that had my trust owning IGT in the first place.

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And that's just one part of the story of my colossal misjudgment...

This week, Harrah's took their next-generation product... a poorly-kept secret that they would... but, again, a positive that I didn't count on happening so fast, because I let irrelevant, negative data about the macro conditions scare me out of the great, long-term story, when the thesis was in tact.

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The truth is, that this stock was stuck in the mud, and I sold it, because I got impatient for that thesis to work out...

Of course, the moment I sold, the stock kicked into gear and, everything that hadn't come fast enough, all of the sudden was occurring all too quickly without me... 

A boneheaded move... I'm whipping myself...

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Never sell a stock you know is right, just because you got impatient...  It'll work out eventually if you know your thesis was right... and mine was right...

I just allowed the wrong data and my own impatience to get the better of me... and the performance of my charitable trust...

So don't repeat my mistakes... mistakes I'm aware of, because I keep an online diary of everything I do with my charitable trust.  That's something I want you to do, so you can go back and analyze your own mistakes...

That's part of the Sell Block... that's all the education you need, but it's not the headline... What is that?... Bottom line... 

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The Bottom Line!:      The DNA is in.  International Game Technology (IGT) is innocent and, if the stock pulls back because of a market decline, it would be a great buying opportunity.  Cramer, on the other hand, is strictly guilty until proven innocent, because of his mistaken IGT call, and he's been sentenced to the next month sleeping on his dirty linoleum floor, curled up next to a half-empty... not half-full...  bottle of cheap, bad-tasting scotch!...

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[See Jim's past comments on Mad Money about IGT (IGT),
pre-searched for you here >> ]

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