50% GAINS PORTFOLIO – JANUARY 29
KEY RATIOS:
TECH – 9%
NON-TECH – 88%
CASH – 3%
BONDS - 1.5%
OPTIONS – 2%
LARGE CAP U.S. STOCKS – 1.5%
SMALL/MIDCAP U.S. STOCKS – 41.5%
INTERNATIONAL STOCKS – 50.5%
IN: PXL.V (1.93), IOC June 60 calls (12), SXPRF (5.39), PDMDF (2.85)
OUT: ZARLF
REDUCED POSITION: COPJF, ACNDF
ADDED MORE: None
TOP TEN: TOP TEN: MHR, GTE, SWHS, PSDMF, MLPG, SSN, ECON, EPM, EMLC, PEB. **Percentage of total portfolio: 28.5%. Top five holdings: 21%. Total portfolio: 79 companies (stocks, options, bonds, funds and shorts).
CURRENT SHORTS, SHORT ETFS AND PUTS: CSKI Mar 5 puts (.475)
LOSS REPORT: This week: 19 stocks/8 options in the red - losses equal 2% of the portfolio, market value 18% of the portfolio (Last 14 stocks/5 options in the red - losses equal 1.5% of the portfolio, market value 11.5% of the portfolio)
SECTORS: Energy 46.5%, Finance 9.5%, Hardware 7%, RE 6.5%, Mining 5.5%, Infrastructure (formerly Services) 3.5%, Retail 3.5%, Transportation 3.5%, Internet 3%, Communications Services 2%, Funds 2%, Bonds 1.5%, Broadcasting 1.5%, Communications Infrastructure 1.5%, Cash 3%.
HOLDINGS:
CATEGORY - STOCK (COST BASIS updated periodically to reflect averaging into positions)
ENERGY – ATPG (19.5), AVNDF (5.63), AXAS (4.75), AZZEF (.4), CAAEF (.66), CENJF (5.82), COPJF (.30), CPX (25.98), CYSVF (11.2), DEJ (.32), EPM (5), EPM July 7.50 calls (.45), GEOI (11.84), GTE (3.33), GUKYF (2.12), HDY (7.38), HDY Feb 5 calls (2.6), IACAF (1.52), IOC June 60 calls (12), MAUXF (.246), MHR (.49), MHR Feb 7.5 calls (.4), MHR May 2.5 calls (1.8), MLPG (25.34), NEYYF (1.09), PBEGF (16.26), PMGLF (32.31), PXL.V (1.93), RCKHF (3.55), REN (10.52), REN-WT (2.57), SDRL (21.2), SSN (1.39), SXPRF (5.39), TAT (3.42) , TTRHF (1.25), XCTGF (5.75)
FINANCE - ALTE (18.95), BAC 2012 17.5 LEAP calls (4.1), C 2012 4 calls (1.13), C 2012 5 calls (.62), CATM (10.78), FIG (4.31), FSC (12.14), MIG (8.49), QBEIF (3.35), SF (44.87), SSBI (5.70)
HARDWARE – ARTW (10.4), DYSL (3.58), LGL (23.94), NNOCF (1.75), PSDMF (2.54), TRPLF (.48)
RE – ACNDF (.625), ARESF (8.9), NRF (4.45), PEB (19.58), SPPR (1.22), STRS (9.32)
MINING/MATERIALS - AABVF (.51), AMHPF (4.75), ARGEF (.42), OROCF (3.05), PDMDF (2.85)
INFRASTRUCTURE - CSYJF (.54), SWHS (2.78)
RETAIL - CHS (11.99), CHW.L (2.66), CSKI Mar 5 puts (.475), ECON (21.23), FINL (15.87)
INTERNET - ACOM (33.82), SBSNF (27.3), WWWW (10.19)
TRANSPORTATION - ALK (45.07), CMI (108.48), MAPGF (.665), UAL (22.3)
COMMUNICATIONS SERVICES – CTEL June 12.5 calls (2.7), EGHT (1.44)
FUNDS - FFD (14.85), KROO (30.04)
BONDS - EMLC (25.99)
BROADCASTING - CETV (21.27)
COMMUNICATIONS INFRASTRUCTURE - IDCC (42.62), IDCC June 60 calls (2.8)
INTERNATIONAL STOCK LIST (46 stocks): AABVF, ACNDF, ALTE, AMHPF, ARESF, ARGEF, AVNDF, AZZEF, CAAEF, CENJF, CHW.L, COPJF, CSKI puts, CSYJF, CTEL, CYSVF, ECON, EMLC, FFD, GTE, GUKYF, HDY, IACAF, IOC, KROO, MAPGF, MAUXF, NEYYF, NNOCF, OROCF, PBEGF, PDMDF, PMGLF, PSDMF, PXL.V, QBEIF, RCKHF, SBSNF, SDRL, SSN, SXPRF, TAT, TRPLF, TTRHF, XCTGF, ZARLF.
Africa/ME - HDY, MAUXF, PDMDF, TAT
Australia - AZZEF, COPJF, MAPGF, QBEIF, SSN
Asia - ACNDF, CENJF, CSKI puts, CSYJF, CTEL, IOC, KROO
Europe - CHW.L, GUKYF, IACAF, NNOCF, PSDMF, SBSNF, TRPLF
Canada - AABVF, ARESF, ARGEF, AVNDF, CYSVF, NEYYF, PBEGF, PXL.V, TTRHF, SXPRF
Latin America - AMHPF, CAAEF, GTE, PMGLF, OROCF, RCKHF
Bermuda - ALTE, SDRL
Global - ECON, EMLC, FFD
**Monthly update on YTD performance January 29, 2011: +0% YTD.
Dow +2% YTD, SP500 +1.5% YTD, NASDAQ -1.5% YTD.
**Last 12 Months: Portfolio +46%, SP500 +19%.
JANUARY 2011 MARKET COMMENTARY
January was a frustrating start to the year, but hardly a surprise. The major US indexes enjoyed a 20-25% vertical liftoff from September - December. It is very typical in the first quarter after a strong year to see a quick blowoff top, then profit taking that tips the market into a sideways grind. That familiar script played out again in 2011, just like it did in early 2005 after the strong 2003-2004 market recovery from the tech stock crash. Stocks traded in a fairly tight range in 2005 until, like 2004, the market rallied in the fourth quarter. This year may not be much different (since 2009-2010 was almost a mirror image of 2003-2004).
These market momentum shifts rarely have much to do with fundamentals in individual stocks. The US earnings season has just begun, with few bad reports to muddy the waters. This is when I always wished we had separate markets, one for traders and one for investors. The charts of our long-term value holdings would be a lot smoother if we didn't have to endure these periodic stampedes in and out of various market asset classes. Most of the time, small cap stocks will outperform their large cap brethren; but when the mood shifts like it did in mid-January, they are likely to lag for a while. That is the market we have to invest in, not the market we would necessarily like.
Because we don't want to give back the gains from last quarter, I have started to sell some of our stocks when the charts break down below a certain support level. I don't usually like to sell a stock for anything but fundamental reasons, but there is also no reason to take the full brunt of a market correction based on sentiment.
Most of our holdings will report Q4 earnings in the next month or so (though US companies have until March 31 to file their complete 2011 audited results). I expect our energy stocks to report solid cash flow and drilling progress, while financials had a strong January too. Any company that shows signs of falling down will be dumped ASAP.
The recent unease in the Arab world is likely to roil the markets in weeks to come. Since these unexpected events came along precisely when the markets were prone to a correction anyway, traders have every excuse to run for the sidelines for a while. But like always, our investing goals are long-term. That's where the real payoff remains. |
