Recent Portfolio Actions

New Buys:

  • 5/19/2010      Petrobras
  • 7/9/2010        Goldman Sachs Group Inc
  • 8/31/2010      American Electric Power
  • 8/31/2010      Corn Products International
  • 8/31/2010      Zhongpin
  • 8/31/2010      PC Connection
  • 8/31/2010      Stancorp Financial

New Sales:

  • 8/31/2010      Goldman Sachs Group Inc
  • 8/31/2010      Dominion Energy
  • 8/31/2010      PPL Inc.
  • 8/31/2010      Sempra Power
  • 8/31/2010      Safeway Inc.

Rebalancing Buys:

  • 5/19/2010      Ensco International Inc
  • 6/1/2010        Noble Corporation
  • 6/29/2010      Computer Sciences Corp
  • 6/30/2010      Industrias Bachoco
  • 6/30/2010      Northrop Grumman
  • 6/8/2010        Safeway Inc
  • 7/6/2010        National Presto
  • 8/12/2010      Constellation Energy Group

Rebalancing Sales:

  • 8/2/2010        Noble Corporation

Thoughts

1)  I try not to trade too much.  For those that are new to my writings, rebalancing buys and sells are meant to bring the positions back to target weight after they have moved 20% away from the target weight.  As it is, for three months, I have not made a lot of trades.

2) I reduced utility exposure, it seems to have gotten relatively expensive amid the yield craze.  I have added cheap, well-financed names in a number of areas.

3) Assurant and National Western are double weights.  The rest of the portfolio is equal-weighted aside from that.  Note that National Western is quite illiquid.  Do not place market orders to buy or sell.

4) I flipped my momentum factor from small negative to moderate positive.  I have concluded that in a touchy macro environment like this, it is wise to consider return momentum.

5) I still don’t trust the financial sector aside from insurers here.

6) I had some runners-up in my analyses: AXS EDS TRH DFG

7 ) Some thoughts on the 8/31 buys:

  • PC Connection is a net-net, illiquid, but makes money.  Unusual to have a company that trades for less than its net assets, and makes money.  THIS IS ILLIQUID.  NO MARKET ORDERS.
  • Stancorp Financial is a well-run insurer trading at a discount.  Issues: Commercial mortgage exposure high, and disability may prove problematic during recessionary conditions.
  • American Electric Power was cheaper than the utilities it replaced.
  • Zhongpin sells pork in China.  Seems cheap, and has a decent amount of growth potential.  The financials look clean, but I am still reviewing it.
  • Corn Products seems cheap, and its products are needed globally.

8 ) I have roughly 11% in cash.  If I find a really good idea, I might bring that down to 8%.  At present, my stocks are nearer to the high end of their rebalancing bands, so I am more likely to be doing a little selling than buying of my existing stocks in the short-run.

9)  Here was the last update.  Comments welcome.

Full disclosure (here is the whole portfolio): COP SBS DIIBF IBA VLO NTE SAFT RGA ESV ALL PRE PEP GPC LNT AIZ ADM CVX NE ORCL NWLI CB CSC NOC NPK SCG TOT SENEA CEG PBR AEP HOGS PCCC SFG CPO