Evolution -
At the end of 1997, my long term portfolio held only MSFT, INTC, and CPQ. Late in the year I made a decision to start diversifying - bought into DELL in December and in 98 I added CSCO and LU. In January '99 I reduced DELL (which was up 4X from my '97 buy) and CPQ, added more CSCO and INTC, added and dropped PFE, added TYC. This year I have cut back more on DELL, added JDSU, NOK, JBL, CIEN.
So the current lineup is CIEN, CPQ, CSCO, DELL, INTC, JBL, JDSU, MSFT, NOK, TYC. All about 10% except CPQ (about 20%), TYC (5%) and LU (5%). I plan to move CPQ down to about 10% but am waiting for what I think is an inevitable run up into the 40s... I will add to NOK (which I think is a likely big winner for years into the future).
The goal of this is to stay in relatively high growth stocks that I understand, but with an overall mix that will allow me to ignore my portfolio for months on end without much worry. So far this year I am up about 17%. If I do 40% for the year I will be delighted, 30% will be OK.
I also like to fool with options, and made more on option plays in 1999 than on equity appreciation. Mostly sell covered calls, sometimes sell puts, once in a while buy calls. Counting the option plays, my overall portfolio had a return of over 100% in 1999, not counting them, I was about 40%. The equity returns were depressed by the drop in CPQ, which is currently my largest holding.
I don't intend this as investment advice - I invest in these companies because I know something about them, like to follow them, and have had good luck with this mix. But for me this mix is as close to "no worry" as I need to be... |
