Portfolio Breakdown:
APP - 6.5%
BAC - 13.2%
TBT - 15.5%
ITUB - 12.2%
AOB - 10.7%
COIN - 1.7%
COINU 1.3%
TAMB - 21.5%
RIMM - 9.5%
HOGS - 14.8%
SDX - 5.2%
OCNF - 2.0%
BP - 7.1%
MBI - 15.4%
TRLG - 7.9%
TBV - 8.1%
CAD Cash - 8.1%
USD Cash - (55.4%)
USD/CAD - 1.046
Portfolio Performance:
Return Since Last Update - 4.16%
Return Since Inception - 199.39%
S&P 500 - 1126.48
S&P 500 Return (June 30) - 22.59%
The Prior Week of Trading:
Because of the holiday shortened week, I did not do any trading. I am satisfied with my positions and am happy to see them into the New Year. However, I would like to mention the moves I did not make this week. First of all, I am very pleased in the recent run up in the price of MBI shares, after buying into weakness last week I have been regarded with a substantial gain on this investment; I view this as more of a long-term holding, so I dont foresee selling this on any short term gyrations. On the opposite side is the way I have treated my holdings of RIMM. After crossing the $70 mark at the end of last week I was of the opinion it would move steadily to $80 given a flat to upward bias in the market. Instead, it has moved to $67 while I have continued to hold. Given future prospects for the smart phone market and RIM's ability to capitalize and execute I am comfortable holding at this level and will be looking for that $80 target early in the New Year.
Thursday, December 24, 2009
Monday, December 21, 2009
Continuing Global Recovery
Portfolio Breakdown:
APP - 7.1%
BAC - 13.8%
TBT - 15.4%
ITUB - 12.8%
AOB - 11.0%
COIN - 1.6%
COINU - 1.2%
TAMB - 23.0%
RIMM - 10.6%
HOGS - 15.5%
SDX - 5.0%
OCNF - 2.2%
BP - 7.3%
MBI - 13.1%
TRLG - 8.0%
TBV - 2.8%
ITUB $25, Dec, sell call - (0.1%)
CAD Cash - 8.3%
USD Cash - (58.7%)
USD/CAD - 1.0655
Portfolio Performance:
Return Since Last Update - (1.97%)
Return Since Inception - 187.42%
S&P 500 - 1102.47
S&P 500 Return (June 30) - 19.98%
The Prior Week of Trading:
I made a few minor changes to the portfolio this week; mostly shifting from winners to underperformers. I sold out of my PRGN position at $5.10, a level that it had previously had resistance. I wanted to move that cash into 3 names which I currently see as undervalued; OCNF, MBI and TBV. OCNF is a fellow container and dry shipper who has not seen any recent love from the market, so I wanted to make it feel welcome in my portfolio. Adjusted tangible book value for OCNF I have calculated at slightly over $3 while the stock is currently trading at $1; on the surface this looks like unbelievable value for a going concern, it is commonplace among shippers to trade at a discount to book value. However, OCNF trades at a substantial discount to BV and forward potential P/E (0.3-0.5 IMO) to its peers. MBI I currently hold in my portfolio and decided to add to the position a couple days after it was announced that it was being removed from the S&P 500; the negative reaction was very large and in my opinion, unwarranted given the size of the move. I welcome the opportunity to hold MBI, one of the surviving stand-alone insurers who has a healthy balance sheet and the opportunity to profit from a recovery at such a steep discount. I also reintroduced TBV into my portfolio after trading it from the $3-$4 range after it dropped into the mid $2's at the end of last week. I can find no definite catalyst for this move, except for continued bearish sentiment on the inability of TBV to beat earnings expectations for the future; Now with such low levels of future expectations, I am willing to take the risk to see this stock into next quarters earnings report.
APP - 7.1%
BAC - 13.8%
TBT - 15.4%
ITUB - 12.8%
AOB - 11.0%
COIN - 1.6%
COINU - 1.2%
TAMB - 23.0%
RIMM - 10.6%
HOGS - 15.5%
SDX - 5.0%
OCNF - 2.2%
BP - 7.3%
MBI - 13.1%
TRLG - 8.0%
TBV - 2.8%
ITUB $25, Dec, sell call - (0.1%)
CAD Cash - 8.3%
USD Cash - (58.7%)
USD/CAD - 1.0655
Portfolio Performance:
Return Since Last Update - (1.97%)
Return Since Inception - 187.42%
S&P 500 - 1102.47
S&P 500 Return (June 30) - 19.98%
The Prior Week of Trading:
I made a few minor changes to the portfolio this week; mostly shifting from winners to underperformers. I sold out of my PRGN position at $5.10, a level that it had previously had resistance. I wanted to move that cash into 3 names which I currently see as undervalued; OCNF, MBI and TBV. OCNF is a fellow container and dry shipper who has not seen any recent love from the market, so I wanted to make it feel welcome in my portfolio. Adjusted tangible book value for OCNF I have calculated at slightly over $3 while the stock is currently trading at $1; on the surface this looks like unbelievable value for a going concern, it is commonplace among shippers to trade at a discount to book value. However, OCNF trades at a substantial discount to BV and forward potential P/E (0.3-0.5 IMO) to its peers. MBI I currently hold in my portfolio and decided to add to the position a couple days after it was announced that it was being removed from the S&P 500; the negative reaction was very large and in my opinion, unwarranted given the size of the move. I welcome the opportunity to hold MBI, one of the surviving stand-alone insurers who has a healthy balance sheet and the opportunity to profit from a recovery at such a steep discount. I also reintroduced TBV into my portfolio after trading it from the $3-$4 range after it dropped into the mid $2's at the end of last week. I can find no definite catalyst for this move, except for continued bearish sentiment on the inability of TBV to beat earnings expectations for the future; Now with such low levels of future expectations, I am willing to take the risk to see this stock into next quarters earnings report.
Saturday, December 12, 2009
Winding down 2009
Portfolio Breakdown:
APP - 9.2%
BAC - 14.0%
PRGN - 5.5%
TBT - 15.2%
ITUB - 13.3%
AOB - 10.2%
COIN - 1.8%
COINU - 1.3%
TAMB - 23.5%
RIMM - 9.4%
HOGS - 15.2%
SDX - 5.5%
OCNF - 2.1%
BP - 7.1%
MBI - 10.8%
TRLG - 7.8%
ITUB Dec, $25, sell call - (0.3%)
CAD Cash - 5.1%
USD Cash - (56.5%)
USD/CAD - 1.0595
Portfolio Performance:
Return Since Last Update - 4.84%
Return Since Inception - 193.21%
S&P 500 - 1106.41
S&P 500 Return (June 30) - 20.41%
The Prior Week of Trading:
It has been a few weeks since I have updated this section of my blog, so please forgive some of the broad explanations as I will attempt to discuss the entire portfolio.
The thesis of an improving economy that I started with when I launched the tracking of my own portfolio in June of 2009 has continued to be confirmed by the relevant economic data; to this end, my portfolio is highly tilted towards global economic and consumer recovery plays. I continue to consider the core holding of my portfolio to be TBT; as previously explained, a variety of factors are coming together (US dollar, budget deficit, improving economy, future inflation) that make the long term prospects of the TBT to be the safest and most effective way to capitalize on higher long term interest rates. I continue to emphasize the financial sector in my portfolio, as the improvement in lending conditions as well as the steep shape of the US treasury yield curve makes stable banks a great investment. BAC is the most undervalued bank in the US; I hold ITUB both because of confidence in the banking sector as well as a desire for exposure to Brazil; MBI as an insurer could be considered the most undervalued in my portfolio if the economy continues to recover; TAMB, a California based community bank is currently priced so low it could be conisdered an option on bankruptcy. A fairly new addition to my portfolio, TAMB carries a relatively high weight due to the substantial increase in it's market value since I took my original position; my price target continues to be $5 although for the sake of allocation I will re-evaluate a portion of the position at $2-3.
Because of my belief in a recovery in the US economy, consumer cyclical stocks carry a substantial weight in my portfolio. My two favorite consumer discretionary stocks are APP and TRLG; both are attractive based on fundamental valuation, but also when taking into account historical and projected growth rates. RIMM would also fall into this category, although it is more a mix of technology and consumer discretionary. RIMM became attractive to me after it's latest small earnings miss put it out of favour with the market; I believe in the viability of this company over the long term and am very excited to buy it at this low level. HOGS is my bet on the Chinese consumer and follows a very simply premise; a growing population and middle class in China will require more food, and in particular: protein. HOGS supplies pork products to one of the fastest growing protein consuming populations in the world and surprisingly trades at a discount to its North American peers. AOB is a pharmaceutical company who manufactures and supplies traditional Chinese medicines within China; it currently trades at very attractive valuation levels and should outperform in the future if revenue growth begins to exceed expectations.
I continue to be bullish on global commerce and hence, have had a preference for dry bulk and container shippers since my portfolio's inception. I have begun to scale back on PRGN because of the market value gains I have experienced, and now am beginning to look once again at OCNF. I believe the market is unfairly punishing OCNF for it's dilutive share issuance without paying attention to how it is using the funds. At its current level, OCNF trades at roughly 1/3 book value and is poised to earn upwards of 0.30-0.50 for the next full fiscal year (in my opinion). Both metrics would put OCNF at a considerable valuation discount to its peers. On a similar subject, I use an investment in commodities as a partial hedge to my exposure to the US dollar. BP has a large dividend and would logically due very well if oil prices move higher over the long term. SDX is a Canadian based oil exploration company, who is in the process of drilling on promising sites in parts of Egypt. The company also boasts a very experienced management team, which is the primary factor for my investment. COIN is an small organic fertilizer supplier who has received very positive reviews from customers; as consumers continue to be more health conscious and fertilizer demand continues COIN should be a beneficiary; COINU is a unit which is comprised of one common share and one common share warrant exercisable at $1.30 in 2014.
APP - 9.2%
BAC - 14.0%
PRGN - 5.5%
TBT - 15.2%
ITUB - 13.3%
AOB - 10.2%
COIN - 1.8%
COINU - 1.3%
TAMB - 23.5%
RIMM - 9.4%
HOGS - 15.2%
SDX - 5.5%
OCNF - 2.1%
BP - 7.1%
MBI - 10.8%
TRLG - 7.8%
ITUB Dec, $25, sell call - (0.3%)
CAD Cash - 5.1%
USD Cash - (56.5%)
USD/CAD - 1.0595
Portfolio Performance:
Return Since Last Update - 4.84%
Return Since Inception - 193.21%
S&P 500 - 1106.41
S&P 500 Return (June 30) - 20.41%
The Prior Week of Trading:
It has been a few weeks since I have updated this section of my blog, so please forgive some of the broad explanations as I will attempt to discuss the entire portfolio.
The thesis of an improving economy that I started with when I launched the tracking of my own portfolio in June of 2009 has continued to be confirmed by the relevant economic data; to this end, my portfolio is highly tilted towards global economic and consumer recovery plays. I continue to consider the core holding of my portfolio to be TBT; as previously explained, a variety of factors are coming together (US dollar, budget deficit, improving economy, future inflation) that make the long term prospects of the TBT to be the safest and most effective way to capitalize on higher long term interest rates. I continue to emphasize the financial sector in my portfolio, as the improvement in lending conditions as well as the steep shape of the US treasury yield curve makes stable banks a great investment. BAC is the most undervalued bank in the US; I hold ITUB both because of confidence in the banking sector as well as a desire for exposure to Brazil; MBI as an insurer could be considered the most undervalued in my portfolio if the economy continues to recover; TAMB, a California based community bank is currently priced so low it could be conisdered an option on bankruptcy. A fairly new addition to my portfolio, TAMB carries a relatively high weight due to the substantial increase in it's market value since I took my original position; my price target continues to be $5 although for the sake of allocation I will re-evaluate a portion of the position at $2-3.
Because of my belief in a recovery in the US economy, consumer cyclical stocks carry a substantial weight in my portfolio. My two favorite consumer discretionary stocks are APP and TRLG; both are attractive based on fundamental valuation, but also when taking into account historical and projected growth rates. RIMM would also fall into this category, although it is more a mix of technology and consumer discretionary. RIMM became attractive to me after it's latest small earnings miss put it out of favour with the market; I believe in the viability of this company over the long term and am very excited to buy it at this low level. HOGS is my bet on the Chinese consumer and follows a very simply premise; a growing population and middle class in China will require more food, and in particular: protein. HOGS supplies pork products to one of the fastest growing protein consuming populations in the world and surprisingly trades at a discount to its North American peers. AOB is a pharmaceutical company who manufactures and supplies traditional Chinese medicines within China; it currently trades at very attractive valuation levels and should outperform in the future if revenue growth begins to exceed expectations.
I continue to be bullish on global commerce and hence, have had a preference for dry bulk and container shippers since my portfolio's inception. I have begun to scale back on PRGN because of the market value gains I have experienced, and now am beginning to look once again at OCNF. I believe the market is unfairly punishing OCNF for it's dilutive share issuance without paying attention to how it is using the funds. At its current level, OCNF trades at roughly 1/3 book value and is poised to earn upwards of 0.30-0.50 for the next full fiscal year (in my opinion). Both metrics would put OCNF at a considerable valuation discount to its peers. On a similar subject, I use an investment in commodities as a partial hedge to my exposure to the US dollar. BP has a large dividend and would logically due very well if oil prices move higher over the long term. SDX is a Canadian based oil exploration company, who is in the process of drilling on promising sites in parts of Egypt. The company also boasts a very experienced management team, which is the primary factor for my investment. COIN is an small organic fertilizer supplier who has received very positive reviews from customers; as consumers continue to be more health conscious and fertilizer demand continues COIN should be a beneficiary; COINU is a unit which is comprised of one common share and one common share warrant exercisable at $1.30 in 2014.
Friday, December 4, 2009
More Good Economic News
Portfolio Breakdown:
APP - 10.3%
BAC - 16.2%
PRGN - 6.2%
TBT - 16.2%
ITUB - 15.0%
AOB - 11.7%
COIN - 2.1%
COINU - 1.4%
TAMB - 22.2%
RIMM - 9.8%
HOGS - 17.1%
SDX - 3.5%
BP - 8.1%
MBI - 12.1%
TRLG - 8.8%
ITUB Dec, $25, sell call - (0.3%)
CAD Cash - 0.6%
USD Cash - (60.8%)
USD/CAD - 1.0585
Portfolio Performance:
Retun Since Last Update - (6.25%)
Return Since Inception - 179.67%
S&P 500 - 1105.52
S&P 500 Return (June 30) - 20.31%
APP - 10.3%
BAC - 16.2%
PRGN - 6.2%
TBT - 16.2%
ITUB - 15.0%
AOB - 11.7%
COIN - 2.1%
COINU - 1.4%
TAMB - 22.2%
RIMM - 9.8%
HOGS - 17.1%
SDX - 3.5%
BP - 8.1%
MBI - 12.1%
TRLG - 8.8%
ITUB Dec, $25, sell call - (0.3%)
CAD Cash - 0.6%
USD Cash - (60.8%)
USD/CAD - 1.0585
Portfolio Performance:
Retun Since Last Update - (6.25%)
Return Since Inception - 179.67%
S&P 500 - 1105.52
S&P 500 Return (June 30) - 20.31%
Wednesday, December 2, 2009
Window Dressing into Year End?
Figures As of Nov 28, 2009
Portfolio Breakdown:
APP - 9.3%
BAC - 13.6%
PRGN - 5.3%
TBT - 13.8%
ITUB - 12.5%
AOB - 9.7%
COIN - 1.8%
COINU - 1.3%
TAMB - 25.0%
RIMM - 8.4%
HOGS - 14.2%
BWR - 4.2%
SDX - 1.8%
OCNF - 2.2%
BP - 7.2%
MBI - 9.9%
TRLG - 7.7%
CAD Cash - 5.3%
USD Cash - (53.0%)
USD/CAD - 1.062
Portfolio Performance:
Return Since Last Update - 15.06%
Return Since Inception - 198.33%
S&P 500 - 1091.45
S&P 500 Return (June 30) - 18.78%
Portfolio Breakdown:
APP - 9.3%
BAC - 13.6%
PRGN - 5.3%
TBT - 13.8%
ITUB - 12.5%
AOB - 9.7%
COIN - 1.8%
COINU - 1.3%
TAMB - 25.0%
RIMM - 8.4%
HOGS - 14.2%
BWR - 4.2%
SDX - 1.8%
OCNF - 2.2%
BP - 7.2%
MBI - 9.9%
TRLG - 7.7%
CAD Cash - 5.3%
USD Cash - (53.0%)
USD/CAD - 1.062
Portfolio Performance:
Return Since Last Update - 15.06%
Return Since Inception - 198.33%
S&P 500 - 1091.45
S&P 500 Return (June 30) - 18.78%
Friday, November 20, 2009
Going Sideways?
Portfolio Breakdown:
APP - 11.3%
BAC -16.4%
PRGN - 6.5%
TBT - 16.5%
ITUB - 14.3%
AOB - 10.9%
COIN - 2.2%
COINU - 1.5%
TAMB - 11.5%
RIMM - 10.0%
HOGS - 16.4%
BWR - 4.7%
SDX - 2.0%
OCNF - 2.7%
BP - 8.3%
MBI - 11.7%
TRLG - 8.8%
CAD Cash - 6.1%
USD Cash - (61.8%)
USD/CAD - 1.0695
Portfolio Performance:
Return Since Last Update - (1.62%)
Return Since Inception - 159.27%
S&P 500 - 1091.38
S&P 500 Return (June 30) - 18.77%
APP - 11.3%
BAC -16.4%
PRGN - 6.5%
TBT - 16.5%
ITUB - 14.3%
AOB - 10.9%
COIN - 2.2%
COINU - 1.5%
TAMB - 11.5%
RIMM - 10.0%
HOGS - 16.4%
BWR - 4.7%
SDX - 2.0%
OCNF - 2.7%
BP - 8.3%
MBI - 11.7%
TRLG - 8.8%
CAD Cash - 6.1%
USD Cash - (61.8%)
USD/CAD - 1.0695
Portfolio Performance:
Return Since Last Update - (1.62%)
Return Since Inception - 159.27%
S&P 500 - 1091.38
S&P 500 Return (June 30) - 18.77%
Friday, November 13, 2009
Broadening the Portfolio
Portfolio Breakdown:
APP - 10.6%
BAC - 15.8%
PRGN - 20.4%
JPM - (5.0%)
TBT - 13.6%
ITUB - 14.3%
AOB - 10.0%
COIN - 2.3%
COINU - 1.7%
TAMB - 8.0%
RIMM - 10.2%
HOGS - 15.8%
BWR - 4.5%
SDX - 2.1%
OCNF - 6.3%
BP - 8.1%
MBI -7.2%
TRLG - 4.7%
PRGN $5 Nov, sell 37 call - (0.4%)
TRLG $25 Nov, sell 2 put - (1.2%)
BAC $16 Nov, sell 3 put - (0.1%)
CAD Cash - 6.1%
USD Cash - (55.0%)
USD/CAD - 1.0516
Portfolio Performance:
Return Since Last Update - 0.96%
Return Since Inception - 163.54%
S&P 500 - 1087.52
S&P 500 Return (June 30) - 18.35%
APP - 10.6%
BAC - 15.8%
PRGN - 20.4%
JPM - (5.0%)
TBT - 13.6%
ITUB - 14.3%
AOB - 10.0%
COIN - 2.3%
COINU - 1.7%
TAMB - 8.0%
RIMM - 10.2%
HOGS - 15.8%
BWR - 4.5%
SDX - 2.1%
OCNF - 6.3%
BP - 8.1%
MBI -7.2%
TRLG - 4.7%
PRGN $5 Nov, sell 37 call - (0.4%)
TRLG $25 Nov, sell 2 put - (1.2%)
BAC $16 Nov, sell 3 put - (0.1%)
CAD Cash - 6.1%
USD Cash - (55.0%)
USD/CAD - 1.0516
Portfolio Performance:
Return Since Last Update - 0.96%
Return Since Inception - 163.54%
S&P 500 - 1087.52
S&P 500 Return (June 30) - 18.35%
Monday, November 2, 2009
Buying the Dips
Portfolio Breakdown:
APP - 11.2%
BAC - 14.8%
PRGN - 18.2%
JPM - (13.7%)
TBT - 16.6%
ITUB - 12.5%
AOB - 7.8%
COIN - 2.2%
COINU - 1.8%
TAMB - 5.8%
RIMM - 7.0%
HOGS - 12.7%
BWR - 6.3%
OCNF - 3.8%
BP - 3.4%
PRGN Nov, $5, sell call - (0.4%)
TRLG Nov, $25, sell put - (0.3%)
BAC Nov, $15, sell put - (0.4%)
CAD Cash - 3.6%
USD Cash - (12.9%)
USD/CAD - 1.0843
Portfolio Performance:
Return Since Last Update - (5.01%)
Return Since Inception - 164.84%
S&P 500 - 1087.52
S&P 500 Return (June 30) - 18.35%
APP - 11.2%
BAC - 14.8%
PRGN - 18.2%
JPM - (13.7%)
TBT - 16.6%
ITUB - 12.5%
AOB - 7.8%
COIN - 2.2%
COINU - 1.8%
TAMB - 5.8%
RIMM - 7.0%
HOGS - 12.7%
BWR - 6.3%
OCNF - 3.8%
BP - 3.4%
PRGN Nov, $5, sell call - (0.4%)
TRLG Nov, $25, sell put - (0.3%)
BAC Nov, $15, sell put - (0.4%)
CAD Cash - 3.6%
USD Cash - (12.9%)
USD/CAD - 1.0843
Portfolio Performance:
Return Since Last Update - (5.01%)
Return Since Inception - 164.84%
S&P 500 - 1087.52
S&P 500 Return (June 30) - 18.35%
Friday, October 23, 2009
Tired Market?
Portfolio Breakdown:
APP - 5.6%
BAC - 15.1%
PRGN - 19.1%
JPM - (13.6%)
TBT - 15.1
ITUB - 10.5%
AOB - 8.0%
TBV - 4.8%
COIN - 2.6%
COINU - 2.1%
TAMB - 1.7%
RIMM - 5.0%
HOGS - 7.5%
BWR - 2.2%
SDX - 1.7%
PRGN Nov, $5, sell call - (0.4%)
CAD Cash - 4.0%
USD Cash - 9.0%
USD/CAD - 1.0537
Portfolio Performance:
Return Since Last Update - 0.29%
Return Since Inception - 179.70%
S&P 500 - 1079.6
S&P 500 Return (June 30) - 17.49%
APP - 5.6%
BAC - 15.1%
PRGN - 19.1%
JPM - (13.6%)
TBT - 15.1
ITUB - 10.5%
AOB - 8.0%
TBV - 4.8%
COIN - 2.6%
COINU - 2.1%
TAMB - 1.7%
RIMM - 5.0%
HOGS - 7.5%
BWR - 2.2%
SDX - 1.7%
PRGN Nov, $5, sell call - (0.4%)
CAD Cash - 4.0%
USD Cash - 9.0%
USD/CAD - 1.0537
Portfolio Performance:
Return Since Last Update - 0.29%
Return Since Inception - 179.70%
S&P 500 - 1079.6
S&P 500 Return (June 30) - 17.49%
Friday, October 16, 2009
USD putting in a bottom???
Portfolio Breakdown:
APP - 5.7%
BAC - 15.9%
PRGN - 18.2%
JPM - (13.7%)
TBT - 14.7%
ITUB - 10.4%
AOB - 8.2%
TBV - 5.3%
COIN - 3.0%
COINU - 1.9%
TAMB - 2.2%
RIMM - 2.9%
HOGS - 3.8%
CAD Cash - 11.3%
USD Cash - 10.2%
Portfolio Performance:
Return Since Last Update - 0.03%
Return Since Inception - 178.89%
S&P 500 - 1087.52
S&P 500 Return (June 30) - 18.35%
APP - 5.7%
BAC - 15.9%
PRGN - 18.2%
JPM - (13.7%)
TBT - 14.7%
ITUB - 10.4%
AOB - 8.2%
TBV - 5.3%
COIN - 3.0%
COINU - 1.9%
TAMB - 2.2%
RIMM - 2.9%
HOGS - 3.8%
CAD Cash - 11.3%
USD Cash - 10.2%
Portfolio Performance:
Return Since Last Update - 0.03%
Return Since Inception - 178.89%
S&P 500 - 1087.52
S&P 500 Return (June 30) - 18.35%
Friday, October 9, 2009
Entering Earnings Season
Portfolio Breakdown:
BAC - 10.5%
PRGN - 18.3%
PRGN - (13.7%)
TBT - 14.8%
ITUB - 10.2%
AOB - 8.6%
TBV - 5.0%
COIN - 1.9%
HOGS - 3.9%
JPM Oct, $50, sell call - (0%)
BAC Oct, $17, sell put - (0.1%)
RIMM Oct, $60, sell put - (0%)
RIMM Oct, $65, sell put - (0.1%)
ITUB Oct, $20, sell call - (0.6%)
HOGS Oct, $15, sell put - (0.6%)
TRLG Oct, $25, sell put - (0%)
JPM Oct, $48, sell call - (0.1%)
CAD Cash - 23.1%
USD Cash - 18.9%
Portfolio Performance:
Return Since Last Update - 1.37%
Return Since Inception - 178.82%
S&P 500 - 1071.49
S&P 500 Return (June 30) - 16.61%
USD/CAD - 1.0431
BAC - 10.5%
PRGN - 18.3%
PRGN - (13.7%)
TBT - 14.8%
ITUB - 10.2%
AOB - 8.6%
TBV - 5.0%
COIN - 1.9%
HOGS - 3.9%
JPM Oct, $50, sell call - (0%)
BAC Oct, $17, sell put - (0.1%)
RIMM Oct, $60, sell put - (0%)
RIMM Oct, $65, sell put - (0.1%)
ITUB Oct, $20, sell call - (0.6%)
HOGS Oct, $15, sell put - (0.6%)
TRLG Oct, $25, sell put - (0%)
JPM Oct, $48, sell call - (0.1%)
CAD Cash - 23.1%
USD Cash - 18.9%
Portfolio Performance:
Return Since Last Update - 1.37%
Return Since Inception - 178.82%
S&P 500 - 1071.49
S&P 500 Return (June 30) - 16.61%
USD/CAD - 1.0431
Monday, October 5, 2009
Buying Again
Portfolio Breakdown:
BAC - 6.5%
PRGN - 17.7%
APP - 1.0%
JPM - (13.2%)
BWR - 3.1%
TBT - 14.4%
ITUB - 10.4%
AOB - 6.7%
TBV - 5.0%
COIN - 2.1%
HOGS - 3.8%
JPM Oct, $50, sell call - (0.2%)
BAC Oct, $17, sell put - (0.4%)
RIMM Oct, $60, sell put - (0.1%)
RIMM Oct, $65, sell put - (0.2%)
ITUB Oct, $20, sell call - (0.5%)
HOGS Oct, $15, sell put - (0.8%)
TRLG Oct, $25, sell put - (0.1%)
CAD Cash - 16.5%
USD Cash - 28.3%
Portfolio Performance:
Return Since Last Update - (1.32%)
Return Since Inception - 175.04%
S&P 500 - 1027.14
S&P 500 Return (June 30) - 11.78%
USD/CAD - 1.081
BAC - 6.5%
PRGN - 17.7%
APP - 1.0%
JPM - (13.2%)
BWR - 3.1%
TBT - 14.4%
ITUB - 10.4%
AOB - 6.7%
TBV - 5.0%
COIN - 2.1%
HOGS - 3.8%
JPM Oct, $50, sell call - (0.2%)
BAC Oct, $17, sell put - (0.4%)
RIMM Oct, $60, sell put - (0.1%)
RIMM Oct, $65, sell put - (0.2%)
ITUB Oct, $20, sell call - (0.5%)
HOGS Oct, $15, sell put - (0.8%)
TRLG Oct, $25, sell put - (0.1%)
CAD Cash - 16.5%
USD Cash - 28.3%
Portfolio Performance:
Return Since Last Update - (1.32%)
Return Since Inception - 175.04%
S&P 500 - 1027.14
S&P 500 Return (June 30) - 11.78%
USD/CAD - 1.081
Monday, September 28, 2009
Directional Uncertainty...
Portfolio Breakdown:
BAC - 6.7%
PRGN - 17.6%
APP - 0.8%
JPM - (13.7%)
BWR - 2.7%
TBT - 9.2%
CAD Cash - 29.6%
USD Cash - 47.6%
JPM Oct, $50, sell call - (0.1%)
BAC Oct, $17, sell put - (0.3%)
RIMM Oct, $60, sell put - (0.1%)
Portfolio Performance:
Return Since Last Update - (1.25%)
Return Since Inception - 178.72%
S&P 500 - 1044.38
S&P 500 Return (June 30) - 13.66%
USD/CAD - 1.0918
BAC - 6.7%
PRGN - 17.6%
APP - 0.8%
JPM - (13.7%)
BWR - 2.7%
TBT - 9.2%
CAD Cash - 29.6%
USD Cash - 47.6%
JPM Oct, $50, sell call - (0.1%)
BAC Oct, $17, sell put - (0.3%)
RIMM Oct, $60, sell put - (0.1%)
Portfolio Performance:
Return Since Last Update - (1.25%)
Return Since Inception - 178.72%
S&P 500 - 1044.38
S&P 500 Return (June 30) - 13.66%
USD/CAD - 1.0918
Friday, September 18, 2009
Looking for Opportunities
Portfolio Breakdown:
BAC - 2.9%
PRGN - 18.9%
APP - 2.1%
JPM - (3.7%)
BWR - 2.9%
TBT - 5.1%
CAD Cash - 32.0%
USD Cash - 39.8%
Portfolio Performance:
Return Since Last Update - 0.84%
Return Since Inception - 182.54%
S&P 500 - 1068.30
S&P 500 Return (June 30) - 16.26%
USD/CAD - 1.0696
The Prior Week of Trading:
Not much action this week for the portfolio; I have decided to take a wait and see approach. The market seems to be caught between a continuation of positive economic data and an environment that seems to be screaming "technically overbought". I am by no means a technician or chartist (believing more in efficient markets than obscure patterns on paper) but I do occasionally fall into the mean reversion trap. Valuations seem to be stretched given the fact that next quarters earnings season will most likely resemble the last; decent EPS performance stemming more from cost cutting rather than revenue growth. The market definitely chose to focus on the EPS surprises last quarter even though estimates were remarkably low; I think the stagnant revenue numbers and lack of forward looking guidance next season will be a wet blanket on a great many of the low quality stocks that have performed so well as of late. I would look to add quality names with a solid dividend and overseas revenue exposure (to take advantage of the low US dollar) to my portfolio to capitalize on this coming trend.
The one name I added to my portfolio this week is the TBT; an inverse ETF tracking the performance of 20+ year treasury securities. I will look to expand on this post at a later date further explaining my reasoning; the short version is that I expect the yield curve to steepen as inflationary expectations start to creep into the economy, while the Central Bank will choose to keep benchmark rates low for a considerable amount of time. Downside risks still remain to economic stability, but cost-push inflationary pressures coupled with an extreme easy money environment will undoubtedly produce higher rates in the future.
BAC - 2.9%
PRGN - 18.9%
APP - 2.1%
JPM - (3.7%)
BWR - 2.9%
TBT - 5.1%
CAD Cash - 32.0%
USD Cash - 39.8%
Portfolio Performance:
Return Since Last Update - 0.84%
Return Since Inception - 182.54%
S&P 500 - 1068.30
S&P 500 Return (June 30) - 16.26%
USD/CAD - 1.0696
The Prior Week of Trading:
Not much action this week for the portfolio; I have decided to take a wait and see approach. The market seems to be caught between a continuation of positive economic data and an environment that seems to be screaming "technically overbought". I am by no means a technician or chartist (believing more in efficient markets than obscure patterns on paper) but I do occasionally fall into the mean reversion trap. Valuations seem to be stretched given the fact that next quarters earnings season will most likely resemble the last; decent EPS performance stemming more from cost cutting rather than revenue growth. The market definitely chose to focus on the EPS surprises last quarter even though estimates were remarkably low; I think the stagnant revenue numbers and lack of forward looking guidance next season will be a wet blanket on a great many of the low quality stocks that have performed so well as of late. I would look to add quality names with a solid dividend and overseas revenue exposure (to take advantage of the low US dollar) to my portfolio to capitalize on this coming trend.
The one name I added to my portfolio this week is the TBT; an inverse ETF tracking the performance of 20+ year treasury securities. I will look to expand on this post at a later date further explaining my reasoning; the short version is that I expect the yield curve to steepen as inflationary expectations start to creep into the economy, while the Central Bank will choose to keep benchmark rates low for a considerable amount of time. Downside risks still remain to economic stability, but cost-push inflationary pressures coupled with an extreme easy money environment will undoubtedly produce higher rates in the future.
Sunday, September 13, 2009
Considerably Smaller
Portfolio Breakdown:
BAC - 2.9%**
PRGN - 17.7% *
APP - 2.1%
JPM - (3.6%)***
BWR - 2.8%
CAD Cash - 32.2%
USD Cash - 45.9%
* Sold 37 sept call options at 5 strike (0.05 premium)
** Sold 5 Sept put options at 16 strike (0.15 premium)
*** Sold 2 Sept call options at 44 strike (0.36 premium)
Portfolio Performance:
Return Since Last Update - 5.57%
Return Since Inception - 180.18%
S&P 500 - 1042.73
S&P 500 Return (June 30) - 13.48%
USD/CAD - 1.0773
The Prior Week of Trading:
I took this week to lighten up the portfolio by selling both some profitable positions as well as options on ones I chose to keep. I sold out of 2/3 of my position in APP as I see limited near term upside due to the prospect of the continuation in its current tight trading range; I like the exposure to high beta consumer discretionary in the medium term, but I think there are better ways to play this thesis. I wish I had switched from APP to TRLG, a name I have been watching for a long time, because it has continued to outperform it's peers; I would look to add TRLG to my portfolio on a pullback into the low 20's. I continue to stay bearish on JPM and to that end sold the September 44 calls and as a quasi hedge to this position I sold the September 16 puts on BAC; the overall pair trade of long BAC and short JPM becomes more attractive by the day and I will look to add to this position in the weeks to come. It was the right time for me to exit KFN as it traded up sharply the morning of Sept. 11 on very light volume; technically KFN seems to be entering some resistance in the mid 4 range and I would look for a significant pullback if the market decides to reverse course; I will look to pick this back up in the 3.75 range.
HNU was definitely my most successful move this week. I took the opportunity of extreme bearish sentiment last Thursday to go double leveraged long natural gas on that day and have since exited the trade one week after it's inception as it has gone beyond my expectations in a very short period of time. Last Thursday it seemed as though no one was long Natural Gas and when the commodity price traded off yet again following a smaller than expected build in the EIA inventory report I thought we had reached a state of maximum (or near maximum) pessimism; turns out, I was right. As I explained in my post from last week, my plan was to ride a bounce to the $3 level in the commodity and that is exactly what I did. I would expect natural gas to consolidate in this level in the weeks to come with a bias more to the downside than up.
BAC - 2.9%**
PRGN - 17.7% *
APP - 2.1%
JPM - (3.6%)***
BWR - 2.8%
CAD Cash - 32.2%
USD Cash - 45.9%
* Sold 37 sept call options at 5 strike (0.05 premium)
** Sold 5 Sept put options at 16 strike (0.15 premium)
*** Sold 2 Sept call options at 44 strike (0.36 premium)
Portfolio Performance:
Return Since Last Update - 5.57%
Return Since Inception - 180.18%
S&P 500 - 1042.73
S&P 500 Return (June 30) - 13.48%
USD/CAD - 1.0773
The Prior Week of Trading:
I took this week to lighten up the portfolio by selling both some profitable positions as well as options on ones I chose to keep. I sold out of 2/3 of my position in APP as I see limited near term upside due to the prospect of the continuation in its current tight trading range; I like the exposure to high beta consumer discretionary in the medium term, but I think there are better ways to play this thesis. I wish I had switched from APP to TRLG, a name I have been watching for a long time, because it has continued to outperform it's peers; I would look to add TRLG to my portfolio on a pullback into the low 20's. I continue to stay bearish on JPM and to that end sold the September 44 calls and as a quasi hedge to this position I sold the September 16 puts on BAC; the overall pair trade of long BAC and short JPM becomes more attractive by the day and I will look to add to this position in the weeks to come. It was the right time for me to exit KFN as it traded up sharply the morning of Sept. 11 on very light volume; technically KFN seems to be entering some resistance in the mid 4 range and I would look for a significant pullback if the market decides to reverse course; I will look to pick this back up in the 3.75 range.
HNU was definitely my most successful move this week. I took the opportunity of extreme bearish sentiment last Thursday to go double leveraged long natural gas on that day and have since exited the trade one week after it's inception as it has gone beyond my expectations in a very short period of time. Last Thursday it seemed as though no one was long Natural Gas and when the commodity price traded off yet again following a smaller than expected build in the EIA inventory report I thought we had reached a state of maximum (or near maximum) pessimism; turns out, I was right. As I explained in my post from last week, my plan was to ride a bounce to the $3 level in the commodity and that is exactly what I did. I would expect natural gas to consolidate in this level in the weeks to come with a bias more to the downside than up.
Sunday, September 6, 2009
Proceeding with Caution
Portfolio Breakdown:
KFN - 33.1%*
BAC - 3.1%
PRGN - 17.4%
APP - 2.1%
JPM - (3.8%)
BWR - 3.0%
HNU - 6.5%
CAD Cash - 26.5%
USD Cash - 12.2%
*sold equivalent total call contracts at $5 strike, Sept 2009 expiry
Portfolio Performance:
Return Since Last Update - 15.53%
Return Since Inception (June 30) - 165.40%
S&P 500 - 1016.40
S&P 500 Return (June 30) -10.61%
USD/CAD - 1.0852
The Prior Week of Trading:
The makeup of my portfolio has changed significantly in response to KFN reaching my short term price target of $4; in response, I sold off approximately 2/3 of my position and wrote front month calls on the remaining shares at the $5 strike. Although my short term price target was $4 (the main reason for the partial liquidation with the upside/risk relationship now smaller), I see intrinsic value at the $6 mark and plan to hold the remaining shares until that target is reached. I used the rec
ent strength of gold as an opportunity to sell my entire position of YRI; I had bought into this stock with precisely this current scenario in mind and am happy to have made a profit (albeit a meager one). Gold has, over the past few months, moved towards the $1,000 level from its tight range around $900, with great haste only to quickly fall back from whence it came (see chart from http://www.futures.tradingcharts.com/). If gold could not maintain a push through $1,000 at the height of the economic crisis, I fail to see how it can do so under a recover scenario with no risk of inflation. If the US dollar can avoid a collapse (which I am betting on), then gold should quickly fall back to the low 900's once again.
KFN - 33.1%*
BAC - 3.1%
PRGN - 17.4%
APP - 2.1%
JPM - (3.8%)
BWR - 3.0%
HNU - 6.5%
CAD Cash - 26.5%
USD Cash - 12.2%
*sold equivalent total call contracts at $5 strike, Sept 2009 expiry
Portfolio Performance:
Return Since Last Update - 15.53%
Return Since Inception (June 30) - 165.40%
S&P 500 - 1016.40
S&P 500 Return (June 30) -10.61%
USD/CAD - 1.0852
The Prior Week of Trading:
The makeup of my portfolio has changed significantly in response to KFN reaching my short term price target of $4; in response, I sold off approximately 2/3 of my position and wrote front month calls on the remaining shares at the $5 strike. Although my short term price target was $4 (the main reason for the partial liquidation with the upside/risk relationship now smaller), I see intrinsic value at the $6 mark and plan to hold the remaining shares until that target is reached. I used the rec
ent strength of gold as an opportunity to sell my entire position of YRI; I had bought into this stock with precisely this current scenario in mind and am happy to have made a profit (albeit a meager one). Gold has, over the past few months, moved towards the $1,000 level from its tight range around $900, with great haste only to quickly fall back from whence it came (see chart from http://www.futures.tradingcharts.com/). If gold could not maintain a push through $1,000 at the height of the economic crisis, I fail to see how it can do so under a recover scenario with no risk of inflation. If the US dollar can avoid a collapse (which I am betting on), then gold should quickly fall back to the low 900's once again. APP has worried me of late, given the persistently weak consumer and the strong possibility of a back to school bust punishing discretionary retailers. I would like to say that APP has held up remarkably well, but under a market correction this stock could easily fall to the lower end of its short term trading range around $3. I don't think that the scandal and subsequent layoffs surrounding illegal migrant workers will hurt the company in the long run, although it may turn out to be a reason not to own it through a broad market correction; an event that may supply the opportunity to pick this retailer up in the future on the cheap. I decided to edge my way into Natural Gas (scary I know!) through the double long ETF: HNU. I have taken a relatively minor stake here purely looking for a morbidly dead, rigamortis infected, cat bounce. Natural Gas is no one's favorite right now, a reason that makes it at least interesting to me. I dont think Natural Gas can sustain a price well below $3 as producers try to add to reserve supply for the coming winter; a series of smaller than expected builds to inventory as production is idled due to its low cost may prove to be a buoy to prices back towards $3. My short term price target under this scenario puts HNU at around $2.50, the level which will be my exit.
Saturday, August 29, 2009
Cautious Territory...
Portfolio Breakdown:
KFN - 88.8%
YRI - 3.2%
BAC - 3.7%
PRGN - 20.8%
APP - 7.9%
JPM - (4.5%)
BWR - 1.7%
CAD Cash - (0.5%)
USD Cash - (21.1%)
Portfolio Performance:
Return Since Last Update - 4.88%
Return Since Inception - 129.72%
S&P 500 - 1028.93
S&P 500 Return (June 30) - 11.97%
KFN - 88.8%
YRI - 3.2%
BAC - 3.7%
PRGN - 20.8%
APP - 7.9%
JPM - (4.5%)
BWR - 1.7%
CAD Cash - (0.5%)
USD Cash - (21.1%)
Portfolio Performance:
Return Since Last Update - 4.88%
Return Since Inception - 129.72%
S&P 500 - 1028.93
S&P 500 Return (June 30) - 11.97%
USD/CAD - 1.0925
The Prior Week of Trading:
Not much has changed since my last update, well more accurately that is, in terms of the composition of my portfolio. I would like to take a moment to express my trepidation regarding the current levels of the US market and the probability of its sustainability. From a purely empirically qualitative perspective, the market has seemed to have lost some of its ability to close significantly higher following good news and yet has been unable to be pushed down when we receive worse than expected economic tidbits; Thus, we must look to what other factors may become relevant enough to shove the market in one decided direction or another. I would first like to point out the Investors Intelligence bull-bear chart posted by http://www.market-harmonics.com/ showing a large percentage increase in apparent bullish sentiment in the market. 
Although, to paraphrase Keynes (write this moment down in history, as I so rarely even mention Keynes...) the market can stay irrational longer than we can remain solvent is poignant to remember when considering any indicators based on sentiment as that is fleeting at best. To the contrary, on a quantitative level, a Fibonacci retracement of the S&P 500 from its high of 1565 (10/09/07) to its closing low of 676 (03/09/09) puts the 50% level at 1120. As we approach this level, I become more and more cautious given that the S&P 500 has now rallied 52% of its closing low in less than 6 months; if this doesn't at least give a cautious investor pause, I don't know what will...
In this spirit, I will be looking towards next week with the following in mind: On those positions that I find to be undervalued and/or poised to outperform their peers I will look to write front month calls on my position; in general I would like to seek out more opportunities to execute pair trades or at least, add a short market position.
I should finish off this segment by mentioning my outlook for the 3 largest holdings in my portfolio. KFN has had another good week and seems to be headed straight towards my price target of $4. This is an intriguing position for me because I see so many options for dealing with its future in my portfolio. I have noticed that KFN seems to exude considerable strength pre-market, selling off mid-morning, only to stabilize and move higher towards the end of the day; as KFN is now moving close to my $4 target, I may try to capitalize on this occurrence while keeping myself protected with either a tight stop or an options collar. PRGN has been a relative laggard, as the Baltic Dry Index has remained weak; I think given the eventuality of a global economic recovery this shipper is still the best, and most undervalued, way to play this move. APP seems to be range bound between $3 - $4 and given the possible froth in the broader market, may sharply retreat to $3 in a correction, I will look to take profits here either through a sale or an equivalent options hedge.
Sunday, August 16, 2009
The New Bull Market
Portfolio Breakdown:
KFN - 87.5%
YRI - 3.3%
BAC - 3.8%
PRGN - 18.8%
APP - 8.0%
JPM - (4.6%)
BWR - 1.8%
CAD Cash - (0.5%)
USD Cash - (18.1%)
Portfolio Performance:
Return Since Last Update - 22.58%
Return Since Inception - 119.03%
S&P 500 - 1003.65
S&P 500 Return (June 30) - 9.22%
USD/CAD - 1.0988
The Prior Week of Trading:
I continued to move in and out of my BAC/JPM pair trade this week with flat results. Over the longer term I am confident in BAC's ability to outperform its peers relative to its current price. APP continues to be a hold in my portfolio, but would likely be trimmed if we experience a significant market correction predicated on fears of a weak consumer and US economy. Continuing on the retail front I am looking at TRLG as a possible buy in the framework of an optimistic econmic scenario; TRLG has had solid earnings even during the recent recession as they have managed their balance sheet and most importantly, offered a product that consumers desire. I would look to enter into TRLG in the $19 range, ceteris peribus.
PRGN has traded lower following a very upbeat earnings release moving from $4.61 on Aug. 11 to close at $4.21 on Aug. 14 (9% drop). Adjusted EPS for the quarter came in at 0.51 making the ttm earnings 2.25 (P/E - 1.87), it's current P/B is 0.26, P/S - 0.66, P/FCF - 10.12 is all well below the industry average. Of course the ultimate fate of any shipper is tied directly to the Baltic Dry Index which has suffered over the last couple months; after bottoming out in the 600's in 2008, the BDI recovered to over 4000 in early June but now sits at around 2750. A continued improvement in the global economy means improvement in global trade and a demand for commodities, this scenario would prove to be beneficial for PRGN.
KFN has obviously been a major driver of my portfolio's success to date; and I think it will continue to perform in the future. My price target of $4-5 remains, although I dont believe we will reach this level until the next earnings release or the market continues to move appreciably up in value. I am content to hold until the next earnings release and will re-evaluate the price target and situation at that time.
KFN - 87.5%
YRI - 3.3%
BAC - 3.8%
PRGN - 18.8%
APP - 8.0%
JPM - (4.6%)
BWR - 1.8%
CAD Cash - (0.5%)
USD Cash - (18.1%)
Portfolio Performance:
Return Since Last Update - 22.58%
Return Since Inception - 119.03%
S&P 500 - 1003.65
S&P 500 Return (June 30) - 9.22%
USD/CAD - 1.0988
The Prior Week of Trading:
I continued to move in and out of my BAC/JPM pair trade this week with flat results. Over the longer term I am confident in BAC's ability to outperform its peers relative to its current price. APP continues to be a hold in my portfolio, but would likely be trimmed if we experience a significant market correction predicated on fears of a weak consumer and US economy. Continuing on the retail front I am looking at TRLG as a possible buy in the framework of an optimistic econmic scenario; TRLG has had solid earnings even during the recent recession as they have managed their balance sheet and most importantly, offered a product that consumers desire. I would look to enter into TRLG in the $19 range, ceteris peribus.
PRGN has traded lower following a very upbeat earnings release moving from $4.61 on Aug. 11 to close at $4.21 on Aug. 14 (9% drop). Adjusted EPS for the quarter came in at 0.51 making the ttm earnings 2.25 (P/E - 1.87), it's current P/B is 0.26, P/S - 0.66, P/FCF - 10.12 is all well below the industry average. Of course the ultimate fate of any shipper is tied directly to the Baltic Dry Index which has suffered over the last couple months; after bottoming out in the 600's in 2008, the BDI recovered to over 4000 in early June but now sits at around 2750. A continued improvement in the global economy means improvement in global trade and a demand for commodities, this scenario would prove to be beneficial for PRGN.
KFN has obviously been a major driver of my portfolio's success to date; and I think it will continue to perform in the future. My price target of $4-5 remains, although I dont believe we will reach this level until the next earnings release or the market continues to move appreciably up in value. I am content to hold until the next earnings release and will re-evaluate the price target and situation at that time.
Friday, August 7, 2009
US Economy Shows Stabalization
Portfolio Breakdown:
KFN - 83.2%
YRI - 4.0%
BAC - 4.3%
PRGN - 11.8%
APP - 10.2%
JPM - (5.5%)
CAD Cash - 1.6%
USD Cash - (9.6%)
Portfolio Performance:
Return Since Last Update - 13.16%
Return Since Inception - 79.41%
S&P 500 - 1010.48
S&P 500 Return (June 30) - 9.97%
USD/CAD - 1.0828
The Prior Week of Trading:
KFN has continued to outperform the market, running into the $3 range ahead of earnings; the company reported in-line EPS and a reasonable outlook for coming quarters and the stock sold off sharply. This appears to be an over-exaggerated snap based on profit taking as the stock has moved more than 5x off its lows; as long as expectations remain high and short term traders sell into big gains, I will gladly take the other side of this trade in the expectation that this deep value investment will reach my $4-5 target in the coming months.
I executed a pair trade going long BAC and short JPM; I still believe this is the right move, although I executed the trade very poorly. I like the growth that the Countrywide and Merrill Lynch acquisitions will add to BAC; the core businesses of mortgage origination and refinancing from Countrywide and investment banking and trading that Merrill Lynch bring to the table will be very strong as the economy and capital markets continue to rebound. JPM, at current levels, is only off 33% from its all time high of 64.15 in March of 2000 while it has de-levered its business model substantially and can not conceivably have the same EPS growth expectations as it had in the past. On the flip side, BAC should be adding to the bottom line as its acquisitions become fully accretive giving it a much more reasonable forward looking P/E.
I continue to believe in the rebounding US economy and thus believe PRGN and APP will be very well positioned with rebounding global trade and a strengthening consumer. YRI is held primarily as a means to lower my beta and protect against a weak US dollar. I sold off my PHM too early into this weeks rally, but am happy with the profit I made. Including my shorts, I am 102% invested; I am confident in the economy, but hesitant of having the market rally too far too fast. In the coming weeks, it is my expectation to add to my portfolio with pairs, so as to stay fully invested but have protection from the short side.
KFN - 83.2%
YRI - 4.0%
BAC - 4.3%
PRGN - 11.8%
APP - 10.2%
JPM - (5.5%)
CAD Cash - 1.6%
USD Cash - (9.6%)
Portfolio Performance:
Return Since Last Update - 13.16%
Return Since Inception - 79.41%
S&P 500 - 1010.48
S&P 500 Return (June 30) - 9.97%
USD/CAD - 1.0828
The Prior Week of Trading:
KFN has continued to outperform the market, running into the $3 range ahead of earnings; the company reported in-line EPS and a reasonable outlook for coming quarters and the stock sold off sharply. This appears to be an over-exaggerated snap based on profit taking as the stock has moved more than 5x off its lows; as long as expectations remain high and short term traders sell into big gains, I will gladly take the other side of this trade in the expectation that this deep value investment will reach my $4-5 target in the coming months.
I executed a pair trade going long BAC and short JPM; I still believe this is the right move, although I executed the trade very poorly. I like the growth that the Countrywide and Merrill Lynch acquisitions will add to BAC; the core businesses of mortgage origination and refinancing from Countrywide and investment banking and trading that Merrill Lynch bring to the table will be very strong as the economy and capital markets continue to rebound. JPM, at current levels, is only off 33% from its all time high of 64.15 in March of 2000 while it has de-levered its business model substantially and can not conceivably have the same EPS growth expectations as it had in the past. On the flip side, BAC should be adding to the bottom line as its acquisitions become fully accretive giving it a much more reasonable forward looking P/E.
I continue to believe in the rebounding US economy and thus believe PRGN and APP will be very well positioned with rebounding global trade and a strengthening consumer. YRI is held primarily as a means to lower my beta and protect against a weak US dollar. I sold off my PHM too early into this weeks rally, but am happy with the profit I made. Including my shorts, I am 102% invested; I am confident in the economy, but hesitant of having the market rally too far too fast. In the coming weeks, it is my expectation to add to my portfolio with pairs, so as to stay fully invested but have protection from the short side.
Sunday, August 2, 2009
Movin' On Up
Portfolio Breakdown:
KFN - 67.2%
YRI - 4.7%
PHM - 4.5%
BAC - 4.4%
PRGN - 12.4%
APP - 11.4%
CAD Cash - (2.7%)
USD Cash - (1.9%)
Portfolio Performance:
Return Since Last Update - 24.3%
Return Since Inception - 58.5%
S&P 500 - 979.73
S&P 500 Return (June 30) - 6.6%
USD/CAD - 1.0788
The Prior Week of Trading:
I sold half my BAC and PHM positions into strength in the sector and the market; banks and homebuilders have both outperformed as of late and I believe would be the hardest hit in a correction phase. I am bullish longer term on the banks and the market as a whole, but it is getting hard to ignore how overbought conditions appear to be when considering various technical and fundamental indicators. I added to my PRGN position ahead of earnings scheduled for Aug 11; this company has a great EPS track record and should look to improve with continued improvement in the Baltic Dry Index. KFN still remains as an unusually high portion of my portfolio, this is due to it's recent exceptional performance, not because of additional purchases. KFN is still well below my price target for the near term of $4 and thus remains a very attractive hold in my portfolio. I will look to diversify this position at the earliest possible opportunity.
KFN - 67.2%
YRI - 4.7%
PHM - 4.5%
BAC - 4.4%
PRGN - 12.4%
APP - 11.4%
CAD Cash - (2.7%)
USD Cash - (1.9%)
Portfolio Performance:
Return Since Last Update - 24.3%
Return Since Inception - 58.5%
S&P 500 - 979.73
S&P 500 Return (June 30) - 6.6%
USD/CAD - 1.0788
The Prior Week of Trading:
I sold half my BAC and PHM positions into strength in the sector and the market; banks and homebuilders have both outperformed as of late and I believe would be the hardest hit in a correction phase. I am bullish longer term on the banks and the market as a whole, but it is getting hard to ignore how overbought conditions appear to be when considering various technical and fundamental indicators. I added to my PRGN position ahead of earnings scheduled for Aug 11; this company has a great EPS track record and should look to improve with continued improvement in the Baltic Dry Index. KFN still remains as an unusually high portion of my portfolio, this is due to it's recent exceptional performance, not because of additional purchases. KFN is still well below my price target for the near term of $4 and thus remains a very attractive hold in my portfolio. I will look to diversify this position at the earliest possible opportunity.
Friday, July 24, 2009
Contained Optimism
Portfolio Breakdown:
KFN - 57%
YRI - 6%
PHM - 11%
BAC - 17%
PRGN - 12%
APP - 16%
CAD Cash - (4%)
USD Cash - (15%)
USD/CAD - 1.084
Portfolio Performance:
Return Since Last Update - 15.32%
Return Since Inception - 17.41%
S&P 500 - 979.26
S&P 500 Return (June 30) - 6.57%
KFN - 57%
YRI - 6%
PHM - 11%
BAC - 17%
PRGN - 12%
APP - 16%
CAD Cash - (4%)
USD Cash - (15%)
USD/CAD - 1.084
Portfolio Performance:
Return Since Last Update - 15.32%
Return Since Inception - 17.41%
S&P 500 - 979.26
S&P 500 Return (June 30) - 6.57%
Friday, July 17, 2009
Steady as She Goes...
The broad market is looking surprisingly strong given the length of the current upward trend. The confluence of decent economic data in the US and a healthy majority of earnings surprises have set a floor of support under this market. According to cnbc.com: "Of the 55 S&P 500 companies who have reported, 71% beat estimates, 9% were in-line, and 20% were below estimates".
If this trend holds true, I would expect to see the S&P 500 move towards 1000; however, I would keep an eye on the value of the market in relation to forward looking economic indicators. The data I have seen thus far seems to point towards a relief in consumer expectations, but has not yet translated into such things as business inventories. The fact that the job market seems to have slowed in its pace of declines and housing starts and sales may have bottomed are both positive signs of fundamental base building.
I have at this time no shorts in my portfolio, although I am long gold which serves as a correlation and currency hedge in my portfolio. I am currently heavily skewed towards KFN, mainly because the stock's drift downwards on low volume may present an attractive short term trading opportunity given my opinion on its short term prospects. However, as it stands now I am pleased with my portfolio's level of diversification and the mix I have built to capitalize on the growth in early cyclical sectors.
Portfolio Breakdown:
KFN - 48%
YRI - 8%
PHM - 12%
BAC - 21%
DD - 13%
PRGN - 13%
APP - 16%
CAD Cash - 0%
USD Cash - (31%)
Portfolio Performance:
Return Since Last Update - 12.70%
Return Since Inception - 1.81%
S&P 500 - 940.38
S&P 500 Return (June 28) - 2.34%
If this trend holds true, I would expect to see the S&P 500 move towards 1000; however, I would keep an eye on the value of the market in relation to forward looking economic indicators. The data I have seen thus far seems to point towards a relief in consumer expectations, but has not yet translated into such things as business inventories. The fact that the job market seems to have slowed in its pace of declines and housing starts and sales may have bottomed are both positive signs of fundamental base building.
I have at this time no shorts in my portfolio, although I am long gold which serves as a correlation and currency hedge in my portfolio. I am currently heavily skewed towards KFN, mainly because the stock's drift downwards on low volume may present an attractive short term trading opportunity given my opinion on its short term prospects. However, as it stands now I am pleased with my portfolio's level of diversification and the mix I have built to capitalize on the growth in early cyclical sectors.
Portfolio Breakdown:
KFN - 48%
YRI - 8%
PHM - 12%
BAC - 21%
DD - 13%
PRGN - 13%
APP - 16%
CAD Cash - 0%
USD Cash - (31%)
Portfolio Performance:
Return Since Last Update - 12.70%
Return Since Inception - 1.81%
S&P 500 - 940.38
S&P 500 Return (June 28) - 2.34%
Monday, July 6, 2009
First Week
The first week since the inception of my portfolio has passed; let's see the results thus far...
Portfolio Breakdown:
KFN - 43%
YRI - 8%
PHM - 12%
BAC - 23%
DD - 14%
PRGN - 13%
APP - 18%
CAD Cash - 5%
USD Cash - (36%)
Portfolio Performance:
Return Since Last Update - (9.64%)
Return Since Inception - (9.64%)
S&P 500 - 898.72
S&P 500 Return (June 28) - (2.20%)
Portfolio Breakdown:
KFN - 43%
YRI - 8%
PHM - 12%
BAC - 23%
DD - 14%
PRGN - 13%
APP - 18%
CAD Cash - 5%
USD Cash - (36%)
Portfolio Performance:
Return Since Last Update - (9.64%)
Return Since Inception - (9.64%)
S&P 500 - 898.72
S&P 500 Return (June 28) - (2.20%)
Sunday, June 28, 2009
New Direction
I have decided, after a long sabbatical, to take this blog in a new direction. The focus of my efforts will be towards relaying details on my personal portfolio and track its performance. I will list my ideas and methodology as it applies to the makeup of my portfolio and hence the broader investing landscape. I will continue to post my views on the economy, but try to relate it back to generating investable theses. However, you can rest assured that I will continue to express my views on free market capitalistic principles and its interlock (or lack there of) in modern western politics.
Investment Objective:
To provide capital growth through a total return approach on a short – medium term horizon. Investments are made across all industry groups and capitalizations. Country exposure will be mainly in North America, with overseas investments made primarily using ADRs and ETFs. Leverage is utilized through margin trading, with the constraint of standard Canadian margin borrowing rates applicable; the maximum amount of leverage undertaken will be to a maximum of 50% of equity invested. The use of short selling is allowable and will be used to the extent that conditions warrant.
Calculation and Reporting:
Returns will be presented net of trading fees and irrespective of any additional management fees. Reporting currency is Canadian dollars and all positions for calculation purposes will be converted to Canadian dollars at the current market rate. The margin interest rate for both Canadian and US debit balances is P+1.5%; this margin cost is calculated once a month and debited from the cash account around the 16th of the month.
Methodology:
My process is most easily identified as value in nature, although I consider value in the context of relative or intrinsic value not simply in terms of its classic definition. If the price of a stock does not fully reflect such relevant factors as future earnings potential or the current value of its tangible assets, it may be attractive based on trading at a discount to its intrinsic value. Relative value may be realized if a stock is a laggard to its peers with no relevant reason or recent events have had a misguidedly detrimental impact on it’s current price. I favour a top-down approach to selection, preferring to identify underlying industry or macroeconomic factors that would support prices in a certain sector or business structure.
Portfolio Breakdown:
KFN - 42%
YRI - 8%
PHM - 12%
BAC - 15%
DD - 13%
PRGN - 12%
APP - 12%
CAD Cash - 17%
USD Cash - (31%)
Portfolio Performance:
Return Since Last Update - NA
Return Since Inception - NA
S&P 500 - 918.90
S&P 500 Return (June 28) - NA
Investment Objective:
To provide capital growth through a total return approach on a short – medium term horizon. Investments are made across all industry groups and capitalizations. Country exposure will be mainly in North America, with overseas investments made primarily using ADRs and ETFs. Leverage is utilized through margin trading, with the constraint of standard Canadian margin borrowing rates applicable; the maximum amount of leverage undertaken will be to a maximum of 50% of equity invested. The use of short selling is allowable and will be used to the extent that conditions warrant.
Calculation and Reporting:
Returns will be presented net of trading fees and irrespective of any additional management fees. Reporting currency is Canadian dollars and all positions for calculation purposes will be converted to Canadian dollars at the current market rate. The margin interest rate for both Canadian and US debit balances is P+1.5%; this margin cost is calculated once a month and debited from the cash account around the 16th of the month.
Methodology:
My process is most easily identified as value in nature, although I consider value in the context of relative or intrinsic value not simply in terms of its classic definition. If the price of a stock does not fully reflect such relevant factors as future earnings potential or the current value of its tangible assets, it may be attractive based on trading at a discount to its intrinsic value. Relative value may be realized if a stock is a laggard to its peers with no relevant reason or recent events have had a misguidedly detrimental impact on it’s current price. I favour a top-down approach to selection, preferring to identify underlying industry or macroeconomic factors that would support prices in a certain sector or business structure.
Portfolio Breakdown:
KFN - 42%
YRI - 8%
PHM - 12%
BAC - 15%
DD - 13%
PRGN - 12%
APP - 12%
CAD Cash - 17%
USD Cash - (31%)
Portfolio Performance:
Return Since Last Update - NA
Return Since Inception - NA
S&P 500 - 918.90
S&P 500 Return (June 28) - NA
Subscribe to:
Posts (Atom)