First Quarter Portfolio Changes – The Aleph Blog

Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control

Posted on 2 April 20092 April 2009 by David Merkel

With all of the furor over the past quarter, I did not update my actions on my portfolio.? Today I do so.

New Buys

Archer Daniels Midland
Chevron Texaco
General Dynamics
Mosaic
Noble Energy
Oracle (can you believe it?)
iShares Brazil ETF

New Sells

Charlotte Russe
Cimarex Energy
Kapstone
CRH plc
Devon Energy
Tsakos Energy Navigation
Japan Smaller Capitalization Fund

Rebalancing Buys

AIZ (2)
CHIC
CRH
DVN
IBA (3)
LNT
NTE
NUE
RGA (2)
SAFT
SBS
SCVL (2)
VLO
VSH
XEC

Rebalancing Sells

AIZ
CHIC (3)
CRH
IBA
NUE
RGA (2)
SCVL
VLO
VSH
XEC (2)

Candidates List

My candidates list was smaller than usual, as I strictly limited candidates to be solvent in severe scenarios, such as we are facing now.? Nonetheless, here was my list of replacement candidates:

ABT ADM COL COV CVX FLR FMX GD INFY JNJ MCK MHP MOS MSFT NE ORCL PCP RTN SFG VAR

My favorite of those I did not buy was Stancorp.? If I could add more insurers, I would add them.? Stancorp is a? very well run firm.

I traded Brazil for Japan, and cleaned up my portfolio, trading away names with weaker balance sheets for those with stronger balance sheets, and aimed for industries that were not heading into reverse.

Full disclosure: long ADM CVX GD MOS NE ORCL EWZ AIZ IBA LNT NUE NTE RGA SAFT SBS SCVL VLO VSH

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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. Also, though David runs Aleph Investments, LLC, this blog is not a part of that business. This blog exists to educate investors, and give something back. It is not intended as advertisement for Aleph Investments; David is not soliciting business through it. When David, or a client of David's has an interest in a security mentioned, full disclosure will be given, as has been past practice for all that David does on the web. Disclosure is the breakfast of champions. Additionally, David may occasionally write about accounting, actuarial, insurance, and tax topics, but nothing written here, at RealMoney, or anywhere else is meant to be formal "advice" in those areas. Consult a reputable professional in those areas to get personal, tailored advice that meets the specialized needs that David can have no knowledge of.