Some Commentary

So I know it's been a minute since a last updated my blog reason being I was away on vacation and didn't do anything to the portfolio--however since I returned I have been made alot of changes which I will go over. First of all while on vacation--I kinda made it a habit of getting up at 9:00am and throwing on CNBC and than fall back asleep listening to the markets. I normally don't get to watch CNBC during market hours because I am at work--the one thing that I caught me off guard was how optimistic everyone sounded last week when the Dow hit 14k from the traders to the analysts. One of the major rules of investing is whenever the media starts getting too optimistic thats generally a bad sign---this was evident this week as the markets are down 6% in a week. So I am going to share with you my thoughts from my portfolio (buys & sells) to whats going on with the markets.





The Market

-As much as it sucks losing money sometimes it's really important for the markets to go through what happened this week. One of the major reasons was well we went too high too fast an indication was the Dow hitting 14k--the pull back brought the markets to a respectable 7% gain for the entire and in my opnion should finish in the 10% - 12% range for end of year. Nobody really knows how big this whole sub-prime thing is however what I do know is that as long as the FED doesn't start raising rates--we should be fine. Remeber the market thinking is very short term as an investor you gotta thing long term at the end of day it's a good thing that banks are making lending guidelines stricter.



My Sell (s)



Apple - Another rule of investing or trading whatever you want to call it is that if a stock has made a nice run before it's earnings sell it--trust me even though you might think it will go higher and will have an awesome quarter SELL IT! Most of the time and trust me I've got burnt on this the stock will tank because analysts expectations are extremely high into the call. Buy the stock back a couple days after the calls cause generally one or two days laters the analysts start changing their EPS estimates on the stock and this generally is positive or negative either way if you made profits no reason to risk--most ppl risk it because they are greedy bottom line. So that said my Apple position was up over 50% since January and so I closed my position taking a nice gain. I will probaly buy back once the dust settles and it comes back to mid or early 130's which it should. The call had a very bullish undertone the biggest being Steve Job's saying there are more products in the pipeline :) The stock went higher after the earnings which is fine with me...i rather lose out on 8% than possibly losing 20% on my gain.



Canadian Pacific - Wow big surprise last week while on vacation closed my position on this railroad one of my best trades and core positions. This was just a matter of taking my profit and waiting until the stock comes down before the whole LBO thing which won't happen TRUST ME. CP has said it and UP won't buy them out and the CAD gov't won't be happy. I will buy it again once it settles in the 70's



Buy (s)

iShares S&P Latin America 40 - I've had my eyes on the index fund for about three weeks now after I sold my holdings in HET & AQNT. I had diversification in Asia (SHG), Eastern Europe (EWO) and Europe (EWD) these were my foreign plays and all three positions have done well for me. The index fund has a large exposure to Mexico, Brazil, Argentina and Chile. My biggest conviction to buy the fund was diversification but I was not going to pay a huge premium for my position so I waited out for a nice downturn in the market which I got and built a position at 10% below it's 52 week high.

Canadian Pacific & Union Pacific - As mentioned above I had sold my holding in CP only to buy it back at much lower price in this case I bought it back under 8% of what I sold it at saving myself around 1k not bad eh? I also built a position in Union Pacific probaly the best performing railroad of late due to it's strong pricing power which is very important because revenue off shipments has been off. I split my position between both the companies and now I have three names in the sector (CNR, CP & UNP).

All in all mixed feelings about this week I am glad to get a good deal on (ILF) and (UNP) however it sucks when the market craps out like it did this week atleast I can say I played the week well and glad I was sitting on alot of cash :)

Commentary On Portfolio

Wow...what a week or last couple weeks! For the week the portfolio is up roughly 7k and I am glad that some of my investments are finally paying off such as SHG a South Korean Bank. As you can see I am still sittin on cash as it's never wise to buy into strength plus I am still contemplating what route to take. I am leaning towards either Emerging Markets or Latin America--however I do not like chasing returns--so I am going to weigh my options while the market digusts the gains we just had.

As you can see I no longer hold ANZ (Australia & New Zealand Bank) basically ANZ has de-listed from NYSE and now trades on OTC. I cannot hold any OTC stocks in my portfolio--so unfortunately I had to sell it. So than I placed a position in WBK (West Pac) another Australian Bank which I will go over in a future post. Now what to have for dinner...

Portfolio Update - 07/12/07

Sector Allocation
Financials - 28%
Consumer/Retail - 12%
Tobacco - 11%
Transportation - 11%
Cash - 10%
Technology - 8%
Foreign ETF - 6%
Energy - 6%
Gaming - 3%

Portfolio Update July 11th

Sector Allocation

Financials - 28%

Consumer/Retail - 12%

Tobacco - 11%

Transportation - 11%

Cash - 10%

Technology - 8%

Foreign ETF - 6%

Energy - 6%

Gaming - 3%

Sold my positions in AQNT & HET

Pretty uneventful week in the markets--same old theme (M&A Activity, Treasury Yield , Fed Rates and Energy Prices) any one of those themes have been moving the market one way or another this week. Like I mentioned last week--I was going to sell my positions on AQNT & HET as both of these companies have been bought out. It's kinda funny because when I took a position on both of these companies I never had the intention that they were going to be prime candidates to be taken over. So as you can see by the sector allocation the proceeds of the disposition is sittin in cash--which currently makes up 10% of my portfolio. Don't worry I'll be using the cash to good use however I feel that we are at the fork at the road in terms of where the US Economy is going. Some analysts say that the "housing market" will spill over into the rest of the economy and that we are in for weaker growth which will lead to a rate cut. This means that basically any industry that is sensitive to GDP growth will tank an example of this would be Transportation--however if we see a rate cut Financials would probaly rally. Now some analysts forecast that the economy will pick up in the later part 0f 2007 and we are either going to see a rake hike or rates being level to what there are now. So as you can see it's a little bit more complicated and maybe the best answer is to just sit on the cash and wait until we get a clear direction. Stay tuned and I will let you know what I decide to do....

Portfolio Update

Sector Allocation

Financials - 28%
Consumer/Retail - 12%
Tobacco - 11%
Transportation - 11%
Cash - 10%
Technology - 8%
Foreign ETF - 6%
Energy - 6%
Gaming - 3%

Apple Stock (Buy, Sell or Hold)

If you have been living under a rock for the last couple days you would've not known that Apple will be releasing iPhone today. Since Apple announced they will be coming out with the iPhone the stock has been up over 30%--which is the exact % Apple is up in my portfolio. So here's how I think the stock is going to play out--since we didn't see a huge runup in the shares in the last couple weeks of the release date we might see Apple hit fresh 52 week highs based on the iPhone selling out at some stores. However, this will be short lived as I think the stock will trade between 110 - 140. Heading into next quarters conference call I think that stock will sell off as analysts still try to figure out how to price in this new revenue from the product. I will most likely add some more to my position at this time. After that I couldn't tell you...I do know that christmas season will be a big teller to how popular this product is so expect within the next six months to be very violatile. One more thing alot of analysts will be looking to see how the iPhone affects the iPods #'s if we see iPods falling off this could be potentially bad. Here is a writers take on Apple & iPhone...

500 phone, $200 stock Right now, analysts on average expect Apple to earn $4 in fiscal 2008. Now let's figure that the analysts have blown it again by the average amount that they have been mistaken over the past four quarters, which is 27.5%. So you add 27% to the $4 consensus number to get an estimate that we'll just call $5 to keep it simple. If that's the right number for 2008, then the stock is currently trading for just 23 times our new estimate. That's pretty darned cheap for a company that has been growing at better than 30% for the past few years and is actually on the verge of a whole new product cycle.
If you apply the company's current 37 price-earnings multiple to $5 you get a target of $185. Which is not bad, but then if you are looking out two years, you need to speculate that Apple will grow by another 30% over the next 12 months. So add 30% to $5 to get a 2009 estimate of $6.50. Multiple that by 35 and you get an 18-month target of $240, or double the current price. Shares have doubled in the past year, so that's unlikely but not totally outrageous.
Although that sounds like a lot, and it is a lot, it's a target that only assumes the company's current pace will continue and does not include any possible new devices or product cycles -- or, to be fair, any risks like the potential for a total meltdown in consumer spending. So I'll ratchet down my target, and add more time, to account for any mischief and overheated assumptions out there. Nibble on Apple now for my 18-month target of $200, but add materially if and when it trades down into its 10-month moving average to around $110-$115 over the summer.