likestofocus (< 20)

Time to Rebalance

May 26, 2008 – Comments (2) | RELATED TICKERS: CNQ , EWY , EWS

It's time for likestofoucs to sell part of my core holdings.  Why am I doing this?  Well even after selling part of Leucadia earlier this month, my top 3 holdings are still over 70% of my portfolio, and my top 4 are about 80% and Mrs likestofocus thinks that's a bit too much.

Coincidentally I've been looking to invest overseas, particularly in Asia and wondering where will I get the funds to buy some ETFs, and maybe some ADRs.  So I'm going to reduce my Leucadia down to my original investment amount, and sell about 45% of my Canadian Natural Resources stock.  That will reduce my top 4 holdings to about 55% of my portfolio and free up some funds to go looking outside North America.  I'm not going to sell any of my Markel or Berkshire since I view them as "forever" holds, and both are looking to acquire or expand overseas.  This will keep my portfolio pretty focused and Ms likestofocus happy. (Note likestofocus likes to focus and have a happy family).

Where to invest?  I already have a small stake in EWS (Singapore ETF) and EWY (South Korea ETF). I'm also interested in Taiwan, Hong Kong, and possibly Japan.  My strategy will be to look at the ADRs and see what value investors I like have bought.  If I can understand the compnay and why the pros made their purchase, I'll make a buy, if not, I'll pass and pick up an ETF instead.

I know I want to add to my EWS and make it 3 or 4% of my portfolio.  I've been to Singapore twice and was very impressed both times.  

I'm also planning on adding to my Korea position for a few reasons.  Buffet and Munger both like Korea's valuation.  Also Korea has slowly been taking over my life.  I own a Hyundia, have a Samsung TV, when we lived in a furnished apartment we had LG appliances and TVs, I even have a few Korean cook books and TV series.  I do not know yet if I will buy more EWY, another Korea fund, or some ADRs.  right now I'm leaning towards Posco and SKM, but will need to research more first.  Munger has called Posco the best run steel company in the world and reasonably priced.  Tweedy Browne has been buying SKM at a higher price then it is currently trading at.  Korean Electric Power (KEP) is another possibilty since it's trading at less then half book value, but is it a value or value trap?  I'll also look at the financial ADRs, but the other ADRs are tech and I'm not a tech person.  There's also an ADR for a land line telephone company that I'm going to pass on since it reminds me of AT&T in the late 90's.

 As for Hong Kong, Taiwan, and Japan, I'll pursue the same strategy as Korea (see what the pros I like are buying and try to figure out why), but I think Korea will become my largest holding in Asia.  I may only buy in Korea and add to EWS, but I think I will at least pick up an ETF for one of the other 3 countries.

Germany and Switzerland are my leading contenders in Europe, but they will also require some research,  However if I find enough good deals in Asia, I won't bother looking to Eurpoe since I do have a value mutual fund that's primarily invested in Western Europe.

This Wednesday o Thursday (5/28 or 5/29) (barring a crash) I'm going to place my sell orders.  Once they are executed I'll add to EWS.  After that I'll start pondering Korea.