Begin the Fourth Quarter Reshaping
Here we go again. Once a quarter, I gether together the ideas that I have gathered from the last three months, so that I can consider them as replacements for companies in my current portfolio. Here are the initial candidates:
AAUK ABC AE AGNC AHS AIB AIMC AIQ AKLE AKO.B ALJ ALV AMAT AMN AMOT AMX APA APD ARG ATPG AUO AXP AZZ BBSI BHE BRNC BTM BWS CIG CNH CNMD COMS COP CPOG CPX CRESY CTGX CVI DAC DAI DAN DCM DDS DE DIT DPS DVR EROC ETH EXH FCS FLR FRZ FWLT GD GIB GIGM GIII GLT GNW GRMN GSK GT GVA HANS HAWK HD HDNG HES HOC HRZ HURC IAR IP IPAS ISYS JAH JMHLY JOS\B JOYG KHD KLAYN LCRY LII LINC LINE LOGI LONG LOW LSR LWSN LYTS MC MDR MF MIDD MLM MOV MRO MRX MWA N NCS NFX NGLS NLC NOK NOV NSRGY NTGR NTL NTT NUE NYX OME OMI ORBK OTEX PARL PBR PCP PCR PDLI PHG PII PKX PLCM PLUS PNX PQ PRDT PRE PRU PTP PWR PX RAME RDS.A RE RHD RIG RIO SB SCHN SCL SCX SDXC SGY SHLO SHS SM SMCI SNX SNY STX SU SUN SYNL TAR TEL TEO TEVA TEX TFCO THRX TKTM TMB TNE TOT TRID TRMA TRS TRV TSO TTM UFCS UFS UPL USAK VMC VMW VQ VRS WERN WES WEYS WINN WMW WNI WRB WST WTS ZNT ZZ
Now, what have I done in the recent past, aside from losing more money than the S&P 500? The following transactions:
Rebalancing Buys: ESV DVN IBA KPPC MGA VLO HIG (twice) LNC XEC SFD AVT NTE YRCW CHIC GMK HMC (twice) SBS OMX TNP
Rebalancing Sales: RGA/A YRCW GPI NTE CHIC
Complete Sales: GPI SFD MET RGA/A IRF
New Buy: RGA/B
I sold International Rectifier because of the bid from Vishay. I would buy more Vishay, except that I fear their bid could succeed, and financing a cash deal in this environment, so large for them, would be a disaster. I sold Group One and Smithfield for balance sheet reasons. Metlife I sold because I needed to lighten up in asset sensitive life insurance; I sold the one that I felt could get hurt the worst in a prolonged slump. FInally, I swapped RGA/A for RGA/B, getting the lesser voting shares at a decent discount. It is possible that the two classes will be unified at some point, or, that RGA could be bought out, and the B shares would do better than the A shares in such a situation.
THe next article n this series will be on my industry model and ideas for there, but if you have ideas that I should consider, add a comment, and I will throw the idea into the hopper.
October 4th, 20087:26 am at
Take a look at HIMX. Not the most timely stock, but I’m not sure a lot of stocks are right now.
I own a tiny position.
October 4th, 20087:39 am at
Mr. Merkel:
Can you explain (at the high level) how you rank sectors and how you screened for that enormous list?
October 4th, 20082:36 pm at
Do you think the market is bottoming and oversold… or could we waterfall… all week we have been chatting about this on my investors place …. what do you think… thanks
October 5th, 20089:50 am at
What are people afraid of about HIG that you’re not afraid of?
October 6th, 200812:12 am at
David,
I’m not sure if you had included any of these types of positions, but it seems to me as though agency closed end funds might be a good buy here; FNMA, FRMC, and GNMA are all trading at very wide spreads to Treasuries, which seems a bit much given the now explicit guarantee. And closed-ends are trading at very wide discounts generally, on the equity side. I’m not sure which particular closed-ends are attractive, but you might know. Interesting idea, anyways, I think.
Steve
October 10th, 20085:52 am at
Big Troubles for the Euro…
David Merkel submits: The Euro has been falling recently versus the Dollar. Why? There have been many theories proposed, but I want to offer my own theory this evening. Fiat currencies are political creatures, and are only as strong a…
October 22nd, 200811:41 am at
Eric, they were obviously smarter than me on HIG. I’ve had my share of bad calls; add this one to the number.