Saturday, October 27, 2007

BUY: GLBL (NASDAQ), DBRN (NASDAQ), ARRS (NASDAQ), ARP (NYSE), LCAV (NYSE)

All total transaction prices include a $15.00 commission.

Transaction summary:

  • Total transaction costs: $16,614.85
  • Final bank account: $14.73

Portfolio:

    Total "account value" including cash is $88,803.12, a slight uptick from two months ago when it sat at $84,098 but still far cry from the optimism of $97,247.88). Some of the increase is due to market (over) optimism created by the Fed's egregious 50 basis point in the overnight rate. There is another FOMC meeting on Tuesday but, whatever they do, things don't look too good for the US economy in 2008.

    No prognostication this time. I will try in the December posting to put the total performance to date in context with major indices &c. However, one thing I really want to do is take a simplified approach to selection for the next 3 periods: just pick 5 at random from the top 25; total picking time: 5 minutes. I'd like to see how my screening attempts bias the results.

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    posted by Ghang! @ 3:24 PM   0 comments

    Wednesday, October 24, 2007

    SELL: INTX, ASEI, CECS, CRYP, DLX

    Sold Intersections, Inc. on the 22nd to bank the short-term capital loss. Sold INTX, ASEI, CECS, CRYP, DLX on the 24th in order to be in long-term capital gain territory. All aggregate prices include the $15.00 broker’s transaction fee.

    • 265 INTX x $8.43 = $2,218.95. Short-term capital loss: $265.85 = -10.7%
    • 113 CECS x $33.63 = $3,785.19. Long-term capital gain: $1,311.31 = 53.0%
    • 148 CRYP x $20.10 = $2,959.80. Long-term capital gain: $485.04 = 19.6%
    • 49 ASEI x $60.03 = $2,926.47. Long-term capital gain: $490.38 = 20.13%
    • 112 DLX x $39.84 = $4,447.08. Long-term capital gain: $1,961.36 = 78.9%
    • INTX’s total annual dividends paid out: $53.00 = 2.1%; total loss then is -8.6%
    • CRYP's total annual dividends paid out: $71.04 = 2.9%; actual gain is then 22.5%
    • DLX's total annual dividends paid out: $112.00 = 4.5%; actual gain is then 83.4%

    Totals:

    • Net short-term capital gain (loss): ($265.85)
    • Net long-term capital gain (loss): $4,248.09
    • Net proceeds for this group: $3,982.24
    • Cost basis: $12,355.25
    • Net return for this group: 32.23%

    Finally, numbers to keep around:

    • Bank account: $16,629.58
    • Accumulated short-term capital gain (loss) so far: ($3,033.40)
    • Accumulated long-term capital gain (loss) so far: $14,283.33
    • Total realized capital gain (loss): $11,249.93
    • Total dividends paid out: $721.13
    • Total realized gain (loss): $11,971.06
    • Total cost of stocks sold: $50,315.44
    • Total realized return: 23.79%

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    posted by Ghang! @ 7:55 PM   0 comments

    Saturday, September 08, 2007

    BUY: MEOH (NASDAQ), NUE (NYSE), HOG (NYSE), ESV (NYSE), AEO (NYSE)

    All total transaction prices include a $15.00 commission. The purchases below were made on Tuesday August 21st; I haven't gotten around to blogging them until now.

    Transaction summary:

    • Total transaction costs: $13,364.46
    • Final bank account: $56.05

    Portfolio:

    Total "account value" including cash is $84,098.60. The number a couple of months ago was $94,248.41 (peaking near $97,247.88). If I didn't have the sense to know how little value vague predictions on 50/50 outcomes have, I'd be boasting about -- and taking solace in -- my mentions of danger factors during last portfolio price update. However, I predicted nothing, and even if I had, could only count the successful prediction as much an accomplishment as correctly calling heads in a coin toss.

    Obviously, we have had a precipitous decline. These things happen to everyone, and can be recovered from. Right now the attitude is wait-and-see. Recession in the U.S. economy, however, is looming more likely all the time, which means further decline -- and buying opportunity -- is almost inevitable. How long can the Dow tread water at 13,000 without either getting tired and sinking, or going for a swim somewhere? It is interesting to watch extremely rich Wall Street types whine for interest rate cuts at the first sign that their enormous compensation might not materialize this year. The Bank of Canada has stopped raising (prematurely?) and it will be interesting to see what the Federal Reserve does in its next meetings, and whether it has any effect.

    From the start of Year 2, changes on the indices are:

    • Dow: 12,961.98 -> 13,113.38: up 1.2%.
    • S&P 500: 1,484.35 -> 1,453.55: down 2.1%.
    • NASDAQ composite: 2,526.39 -> 2,565.70: up 1.6%.
    • TSE 300: 12,171.29 -> 13,651.21: up 12.16%

    From the start of Year 1, changes on the indices are:

    • Dow: 11,278.7695 -> 13,113.38: up 16.3%.
    • S&P 500: 1,309.93 -> 1,453.55: up 11%.
    • NASDAQ composite: 2,370.8799 -> 2,565.70: up 8.2%.

    A stock to watch is Mylan Labs. For a generic drugs maker, it looked to me like it was on a pretty solid footing until I had a look at its financial position, likely arrived at by borrowing for acquisition. In fact, I saw a lot of these companies with cringe-worthy quick, current, and asset to liability ratios. They look like they're doing well, until the earnings fall off...

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    posted by Ghang! @ 12:58 PM   0 comments

    Tuesday, August 21, 2007

    SELL: HRB, FDG, XJT, FCX, CLMT

    Sold H&R Block, Fording, and ExpressJet Holdings on the 20th to keep the capital loss; remainder on the 21st for the long-term capital gain. Including commissions of $15.00 per transaction, here are the sale results:

    • 109 HRB x $19.20 = $2,077.80. Short-term capital loss: $408.23 = -16.42%
    • 82 FDG x $28.71 = $2,339.22. Short-term capital loss: $143.98 = -5.8%
    • 378 XJT x $4.25 = $1,591.50. Short-term capital loss: $891.84 = -35.9%
    • 46 FCX x $81.29 = $3,724.34. Long-term capital gain: $1,199.12 = 47.4%
    • 79 CLMT x $46.35 = $3,646.65. Long-term capital gain: $1,182.65 = 48.0%
    • HRB's total annual dividends paid out: $59.69 = 2.4%; total loss then is -14%
    • FDG's total annual dividends paid out: $216.86 = 8.7%; actual gain is then 2.9%
    • FCX's total annual dividends paid out: $160.54 = 6.4%

    Totals:

    • Net short-term capital gain (loss): ($1,444.05)
    • Net long-term capital gain (loss): $2,381.77
    • Net proceeds for this group: $937.72
    • Net return for this group: 7.5%

    Finally, numbers to keep around:

    • Bank account: $13,960.41
    • Accumulated short-term capital gain (loss) so far: ($2,767.55)
    • Accumulated long-term capital gain (loss) so far: $10,035.24
    • Total realized capital gain (loss): $7,267.69
    • Total dividends paid out: $485.09
    • Total realized gain (loss): $7,752.78
    • Total cost of stocks sold: $37,960.19
    • Total realized return: 20.42%

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    posted by Ghang! @ 7:04 PM   0 comments

    Sunday, July 22, 2007

    Portfolio Price Update

    For now, the 14,000 horizon for the Dow is still in sight, which means that one would expect US equities to carry on doing well for a while. On the other hand, the following factors are loom large:

    • China, where multiples are in the 40x-50x range and every Tom, Dick, and Harry (err, Chen, Cong, and Fai) is rushing to get in on things. Although this is from a May New York Times story (and things have fallen off since then) it is still pretty illuminating (my emphasis).
      Whoever succeeds Mr. Zhou confronts one of the toughest challenges of any financial policy maker. Chinese families eager to make money are opening brokerage accounts around the country, with the number of new accounts rocketing from several thousand a day two years ago to nearly 300,000 a day this month.
      I think it is self-evident that people, as a whole, can't get wealthier faster than the overall economy is growing; all these paper fortunes have to fade sometime.
    • The subprime thing, for which I blame Alan Greenspan and his 1% interest rates. "Home ownership is at record levels in America!" Tell me about it. It appears that many "respectable" firms, even Merrill Lynch, are intent on hiding the true extent of the subprime damage, or building it into "contingency " funds on the balance sheet rather than admitting the loss outright, thus sustaining "high earnings". On the other hand, this thing could be blown all out of proportion by the penchant of financial radio and television shows to beat each story to death for several months at a time.
    • The inevitability of recession in the US economy. These things happen periodically, and when they do, typically market prices suffer out of all proportion to the economic declension.

    Current price of all investments in the portfolio is $97,247.88 purchased at a cost of $81,237.87 for an appreciation (of current investments) of $15,872.34 or 19.5%.

    Totally excluding taxation, gains are 29.7% ($22,247.88) since the beginning of year 1 and 10.2%($8,967.68) from the beginning of year 2 until now.

    Since the start, here's how the three major US market indices have been faring.

    • Dow: 11,278.7695 -> 13,851.08: up 22.8% since the beginning of year 1. (12,961.98 -> 13,851.08: up 6.9% since the beginning of year 2).
    • S&P 500: 1,309.93 -> 1,534.10: up 17.1% since the beginning of year 1. (1,484,35 -> 1,534.10: up 3.4% since the beginning of year 2).
    • NASDAQ composite: 2,370.8799 -> 2,687.60: up 13.4% since the beginning of year 1. (2,526.39 -> 2,687.60: up 6.4% since the beginning of year 2).

    Three final comments: first, besides all the things that Joel's methodology requires, it absolutely forces one to consistently maintain the cheapest possible "good" equities in one's portfolio. By forcing down the portfolio price, you are arguably (in a very loose sense!) maximizing the potential price appreciation at these regular intervals. Second, given how different the Canadian economy's make-up is to that of America, how likely is it that Canadian equities exhibit the same "magical" behaviour? Is the Canadian economy big enough? Diverse enough? Thirdly, I really want to start doing this stuff with my own money, however puny an amount it is. Although reasonably confident in the logic of the method, I am still fearful that the exuberance of "earning" a few thousand dollars in fake money is carrying me away...

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    posted by Ghang! @ 11:57 AM   0 comments

    Sunday, June 24, 2007

    BUY: GW (AMEX), TCK (NYSE), RAIL (NASDAQ), ASPV (NASDAQ), AVR (NYSE)

    All total transaction prices include a $15.00 commission.

    Transaction summary:

    • Total transaction costs: $17,263.53
    • Final bank account: $139.67

    Portfolio:

    Total "account value" including cash is $94,248.41. The number a couple of months ago was 88,280.20 meaning that in theory things are moving along at a nice clip; this means that to-date second-year returns are 6.7% and overall increase since the start of 25.7%. Internet is unavailable to me as I write this, but I understand that P/E on the S&P is around 17+ x some very high earnings, so pricing is moving to the fringe of being related to reality. When the US economy does go boom, it may well be joined by China's, meaning instant recession. If the broader economy continues growing, prices will certainly continue the upward climb for a while. This can’t go on indefinitely, though, and probably within a year prices will have fallen below the current level. I think shifting ramping the market cap cut-off from $50 million to $1.5 billion would be wise over the next year. Bigger companies will suffer less when the contraction comes. That’s a consideration for a methodology with a one-year holding horizon.

    From the start of Year 2, changes on the indices are:

    • Dow: 12,961.98 -> 13,360.76: up 3.1%.
    • S&P 500: 1,484.35 -> 1,502.56: up 1.2%.
    • NASDAQ composite: 2,526.39 -> 2,588.96: up 2.5%.
    • TSE 300: 12,171.29 -> 13986.03: up 14.91%

    From the start of Year 1, changes on the indices are:

    • Dow: 11,278.7695 -> 13,360.76: up 18.5%.
    • S&P 500: 1,309.93 -> 1,502.56: up 14.7%.
    • NASDAQ composite: 2,370.8799 -> 2,588.96: up 9.2%.

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    posted by Ghang! @ 7:12 PM   0 comments

    Wednesday, June 20, 2007

    SELL: MOT, PWEI, PPD, HNR, ANIK

    Sold Motorola on the 18th to keep the capital loss; remainder on June 19 for the long-term capital gain. Including commissions of $15.00 per transaction, here are the sale results:

    • 133 MOT x $18.13 = $2,396.29. Short-term capital loss: $289.35 = -11.4%
    • 254 ANIK x $15.60 = $3,947.40. Long-term capital gain: $1,245.08 = 46.1%
    • 90 PWEI x $33.41 = $2,991.90. Long-term capital gain: $317.40 = 12.7%
    • 217 HNR x $12.97 = $2,799.49. Long-term capital gain: $98.03 = 3.6%
    • 78 PPD x $63.71 = $4,954.38. Long-term capital gain: $2,271.78 = 84.7%
    • MOT's total annual dividends paid out: $26.60 = 0.99%
    • PWEI's total annual dividends paid out: $21.40 = 0.8%

    Totals:

    • Net short-term capital gain (loss): ($289.35)
    • Net long-term capital gain (loss): $3,932.29
    • Net proceeds for this group: $3,642.94
    • Net return for this group: 27.09%

    Finally, numbers to keep around:

    • Bank account: $17,403.20
    • Accumulated short-term capital gain (loss) so far: ($1,323.50)
    • Accumulated long-term capital gain (loss) so far: $7,653.47
    • Total realized capital gain (loss): $6,329.97
    • Total dividends paid out: $48.00
    • Total realized gain (loss): $6,377.97
    • Total cost of stocks sold: $25,518.40
    • Total realized return: 24.99%

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    posted by Ghang! @ 1:26 PM   0 comments