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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (42078)	3/30/2011 10:45:06 PM
From: E_K_S	of 78918

Hi Paul My two success stories are CVX and BHP. In the late 90's I bought Texaco (around $28.00/share) for it's 5% dividend and in October 2000 CVX purchased them. In September 2004 CVX split 2:1 so my $28.00 shares are now $14.00 shares. One of my largest long term holds w/ very large capital gains is in BHP. I started to accumulate shares in the 90's and with two stock splits (one in 96 and another in 2001) my cost basis is now around $10.00/share. Stock is just off it's all time high of $96.00/share. These two were easy holds as they paid a pretty good dividend and both owned valuable assets "in-the-ground". They are also my #1 and #2 holdings. I only sell shares now from time to time as I do not want any one position to be too large a % of the portfolio. During the Dot Com blow up, I loaded up on GLW (2/2002) at an average cost of $5.00/share. I still hold 75% of those shares waiting for $30.00/share. Not sure if this one will make it back to it's 2000 all time high of $100.00/share. This one is a harder hold for me as it pays little or no dividend so I do sell covered calls on some of the shares from time to time to generate income. It's interesting that some of the big movers now are these E&P companies. Since October 2010 my basket of now 15 companies are up more than 42% due mainly to 3 or 4 of them launching into multi bagger status. I am not sure how long I will hold these but I would not be surprised to see a few of them taken out by a much larger integrated Oil and/or Natural resource company for cash or my preference shares in the acquirer. The biggest problem with holding such large gains inside the portfolio is that when you peel off shares it creates a significant costly tax event. Therefore, I do a lot of tax loss harvesting to offset some of the gains. It's a good problem to have and you can decide when you want to pay the tax man. EKS

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