Aug

Triage

I’m still working through my portfolio, but I have categorized some stocks:

The Dead — Companies with bad balance sheets, but have been whacked so bad that it is still worth playing

Jones Apparel
Deerfield Capital
YRC Worldwide

Walking Wounded — Companies with okay balance sheets that we feed more cash to

Lafarge
Industrias Bachoco

Seemingly healthy that might have financing problems — Sold

Lithia Automotive
Group 1 Automotive

Uncertain as of yet

Barclays plc

Safe New Names Bought

PartnerRe
Microcap yet to be named when I have my full position on.

More tomorrow. As you can tell, I am positioning my broad market fund more conservatively. I am not optimistic on how we work through the amalgam of debts that might not get paid.

Full disclosure: long PRE IBA DFR JNY YRCW BCS LR

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One Response to Triage

Josh Stern says:
17 August 2007 at 4:07 pm
Nice pop with the DFR. IMO, it would be an informative column to explain in detail how you evaluate a company like that.

Disclaimer

David Merkel is an investment professional, and like every investment professional, he makes mistakes. David encourages you to do your own independent "due diligence" on any idea that he talks about, because he could be wrong. Nothing written here, at RealMoney, Wall Street All-Stars, or anywhere else David may write is an invitation to buy or sell any particular security; at most, David is handing out educated guesses as to what the markets may do. David is fond of saying, "The markets always find a new way to make a fool out of you," and so he encourages caution in investing. Risk control wins the game in the long run, not bold moves. Even the best strategies of the past fail, sometimes spectacularly, when you least expect it. David is not immune to that, so please understand that any past success of his will be probably be followed by failures.

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Triage

One Response to Triage

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