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Strategies & Market Trends : Value Investing

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bruwin

CusterInvestor

Mattyice

To: Paul Senior who wrote (54701)	1/3/2015 8:52:49 PM
From: E_K_S	3 Recommendations of 78626

I never commit 30% new money to any investment. Maybe I will grow a position (w/ new money) up to a 2% portfolio position, then if I am right, it will grow to a 10% portfolio position. I did this with WMB buying shares at $15.00/share (9/2010). Stock now at $45.50/share or almost 3x my original investment. That position represents a 4% portfolio position and is one of my top ten holdings. Note: I built original position to a 1.5% portfolio position buying my shares in Q4 2010 w/ three different buys. Typically when a portfolio position is over 7%, I will peel off a few shares. I have the KMI (MLP roll-up of 3 separate MLP's) which now represent 10% of the portfolio. I plan to hold that position w/ an avg cost at $35.00/share ( avg reflects the new shares I got at $41.50/share). I expect KMI to double in value in 3-5 years, so will hold the large position mainly because the dividend is one of my higher yielders. So in summary, I will never ever commit more than 2% 'new' money to any one position and/or as I am building a position. My goal is to find those that are undervalued and/or will grow to 5% portfolio positions or higher. FWIW, I did buy a distressed Duplex in 2009 which I paid all cash. I sold shares in the portfolio to do the purchase. Once I completed all the fix-up (nice high end everything) and converted it to a tri-plex adding another 25% cash, my final investment represented a 20% portfolio position. I got the property to produce a 10 Cap rate and the current value has increased in value by 20% too but I have no intentions to sell. This approach has saved me from land mines. Like SDRL at $38/share and now $12.00/share. Fortunately my total portfolio position in SDRL was less than 1.5% but I still felt the pain. EKS

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