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speedybure (< 20)

Anyone Care to Comment/ Criticize One Of my Real Life Portfolios? Much Appreciated

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June 26, 2009 – Comments (36)


Anyone who has read my posts before, know I am heavily weighted towards basical materials/natural resource equities. Here is my current 20 stock portfolio (the first 15 make up about 90%) as well as one of my other portfolios. Comments/Criticisms are appreciated.

 1) Silver Wheaton

2) Transocean

3) Yamana Gold

4) Jaguar Mining

5) Migao

6) FMC technologies

7) Canadian Oil Sands Unit Trust

8) Potash

9) Agnico-Eagle

10) ABB Grain/ Viterra

11) Pennwest

12) Franco Nevada- 65% gold and Silver royalty stream, 25% oil and gas, 5% Platinum, 5% Potash

13) Taseko Mines

14) Royal Gold

15) Suncor

16) Freeport

17) Mosaic

18) Diamond Offshore

19) Aurizon Mine

20) BHP- Billiton

 My much smaller but non-resource based Portfolio1) Phillip Morris Int'l- just announced they will be returning 9billion to shareholders this year increasing to a 65% payout ratio*largest holding by a mile in this portfolio

2) Brookfield Asset Mgmt

3) Amgen- Wainting to sell half right before Desonaub goes before the FDA (always a big run up in anticipation of blockbuster drugs) for their colon cancer treatments.

4) Genzyme- My favorite Biotech, Was able to Initiate almost a full position when it crashed to 50. I have an in depth analysis on my website http://www.comingcurrencycrisis.blogspot.com . Their Pipeline could be worth more than the current enterprise value. 12 stage 3 drugs , 22 stage 2 drugs , 11 stage 1 & many more in development. This time, however, Genzyme has decided to tackle oncology, parkinsons, alheimers, ms, AML, kidney failure and a few other big markets. 

5) TBT & TLT

9) Celgene- Although I have reduced my position about 40% due to the 30% run-up I have seen  

36 Comments – Post Your Own

#1) On June 26, 2009 at 5:50 PM, binve (< 20) wrote:

speedybure. Nice. Nothing to criticize, very similar to my own, in my long term investment account (CEF is my #1 holding), but I have lots of GSMs, and few materials miners, Oil Producers, Trusts and CANROYs. I am very much on board with your thinking :) Thanks for sharing!

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#2) On June 26, 2009 at 6:08 PM, SkepticalOx (99.51) wrote:

Well, here's a question: Since your portfolio is a concentrated bet on commodities and basic materials, what if you bet wrong?

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#3) On June 26, 2009 at 6:28 PM, Seano67 (25.12) wrote:

Those are a couple of good looking portfolios. I love RIG, love SLW, love AUY, love POT and MOS, love BHP and FCX....and I may even like your non-commodities portfolio better than the commodity based one.

You've picked a lot of strong companies, but in my opinion too many of them duplicate one another. I know you love miners, but if it were me I'd probably cut loose a few of the miners and maybe DO (which is basically a slightly lesser version of RIG in my opinion), and maybe one of the fertilizer holdings- and in exchange for that maybe add some direct exposure to oil. I'd add one of the Big Oils, whether that be XOM, CVX, COP, or BP, and I would certainly add some PBR to that too.

That's going by my assumption that you plan on holding these things for awhile. Anyway that's what I'd do, but I do like your holdings. I personally don't believe there's one weakling in the bunch.

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#4) On June 26, 2009 at 6:35 PM, peachberrytea (69.84) wrote:

hmmm you've got quite a few gold miners (i count 6).. i dunno enough about the gold miners to say, but perhaps you could focus your positions in gold miners, i.e. buy larger positions in fewer miners? i imagine you know which gold miners amongst the ones you have there have the most upside potential.. so why not focus on just those? sure, you want to diversify away from the operational risk for each miner, but well.. 6 companies is a lot to keep track of. haha i guess if you aren't lazy like me it don't really matter

hmm what's your timeframe on this portfolio? im guessing 3+yrs? i like oil and PMs and AG for that time frame (or longer) definitely... it's a bit hard to say when these will actually run up tho (these depend on when inflation begins, when the global economy picks up again.. and both of these are a bit of a crapshoot at this point IMHO).. so there might be a bit of opportunity in other sectors in the short run. If you're willing to sit on it and wait it out tho i think you're fine (it might still be bumpy; read: rising interest rates on mortgage defaults and all that crap the banks have on their balance sheets)

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#5) On June 26, 2009 at 6:47 PM, peachberrytea (69.84) wrote:

hey btw... just wondering, any reason you picked pennwest and can oil trust ahead of pengrowth, enerplus, etc.? i've been looking at a canroy for myself too but i haven't gotten around to doing the research.. so if u don't mind sharing ur thoughts on how u went with the couple u went with.. thanks!

#2 skepticalox

i thought about saying what ox said about this portfolio too - this is obviously very heavy into commodities. but i stopped myself. i stopped myself because (i believe i'm quoting the idea from jim sinclair): "making concentrated bets is how you get rich. diversifying is how you stay rich"

so the idea is if you like a particular sector that much you should go for it. you put your eggs in one basket, and then you watch that basket and make sure it succeeds. plus, i don't think there's too much long term downside in commodities, and so you don't stand to lose much by concentrating into those.. concentration is okay when there is less downside

my 2 cents

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#6) On June 26, 2009 at 6:56 PM, NOTvuffett (< 20) wrote:

TGB (Taseko Mines) has a really scary chart if you look back 15 years.  I am having a hard time pulling the trigger on that one.

I don't know if oil sands really make a lot of sense unless the price of oil goes up, but that depends on your timeframe I guess.

Sean is probably right that this is not well balanced but they are good picks and I own lots of them.

The biotechs always seemed a bit risky for my taste but there could be huge rewards too.

 

 

 

 

 

 

 

 

 

 

 

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#7) On June 26, 2009 at 7:28 PM, speedybure (< 20) wrote:

SkepticalOx:

I doubt I will be 100% wrong. I take a Austrian perspective on investing i.e supply/ demand. Oil will be needed for a long time even if a new source of energy, just the time it takes to implement such a thing. Gold miners are an emerging industry as they have their costs under or around $400/oz, so even if gold goes back to $600, their is still a pre-tax operating marging of 33%. Silver is being used more and more in batteries and the future will see a battery with much more silver superior to the lithium oin which loses a little but every time it is recharged. Base metals have to be used, The Bric Countries are already coming out of this slump with 10-12% grpwth in china in fy 2010 expected.

peachberrytea: Yes there are 6 gold stocks but only 3 are miners, franco nevada has 25% oil and gas 5% platinum , 5% potash. Royal Gold also has a few different streams oncluding potash. I bought many of these in the high $3 range, so im not to worried. I am wainting for gold to break out, (I mean this will undoubtly be worse than the 70's inflation) so i expect gold to reach 1250,1500,2000,. 

I picked pennwest on valuation, and i do actually have some enerplus in another portfolio. I bought many of these when they hit rock bottom. My favorite though is Canadian Oils sands Unit Trust. They have a 38% interest in the enormous syancrude project. i expect oil to go well past 100%, so then candian oil sands have a huge advantage because of their enormous reserve base, which people don't acknowledge. But this is what I love about it. I got to start buying it at 19.5 candian and now have a full position on at an average cost just above C$23/share.

 

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#8) On June 26, 2009 at 7:29 PM, speedybure (< 20) wrote:

I'm 25 anyway, So I take quite a bit of risk in futures and equities. BTW I always hedge myself, so I don't do this without protecting myself.

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#9) On June 26, 2009 at 7:38 PM, Seano67 (25.12) wrote:

My favorite though is Canadian Oils sands Unit Trust.

 

How do you invest in that one, Bure? Is that traded on the TSX or something?

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#10) On June 26, 2009 at 7:47 PM, lquadland10 (< 20) wrote:

As they devalue the dollor you are going to make out like a bandit.

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#11) On June 26, 2009 at 8:04 PM, catoismymotor (< 20) wrote:

Twenty picks? I would reduce that to maybe ten. But that is me talking about my preferences. Best of luck to you.

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#12) On June 26, 2009 at 8:16 PM, speedybure (< 20) wrote:

Seano67:

Yes I buy it on the TSX, Although I'm living in Australia for 2-3 years, I started an interactive brokers account which allowes me to trade on every exchange open to foreigners.

 catoismymotor: Your right, but i do have my top 10 holdings weighing a significant propportion. I now manage 3 accounts, (although i graduated undergrad with a finance major and a non practicing CPA) withough having passed series 7 or the other tests needed to legally do it. So I have done so much research and valuations on 20-30 other stocks, I have found something I like in them, thus I buy a few hundred shares should I see a good opportunity. 

I keep the portfolios I manage at 10-12 equities with 10% cash 

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#13) On June 26, 2009 at 8:59 PM, ChrisGraley (29.86) wrote:

Great portfolio speedy,

I personally am not too keen on the oil sands just yet. When oil hits $90 a barrell though I'm jumping in with both feet.

I would also recommend investing in Jim Rogers' Commodity Index as well. That would give you a broader exposure to commodities to mitigate any castastrophies in any particular sector. Remember the governments of the world are trying to manipulate commodities, but something tells me that they might overlook Adzuki beans. The nice thing about that index is that over the long term it will always beat the S&P hands down, especially if the emerging markets take off again.

It appears from what I've seen from this and other posts, that you, binve and I seem to be on the same chain of thought.

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#14) On June 26, 2009 at 10:25 PM, speedybure (< 20) wrote:

Chris G:

Yeh I agree but unlike most oil sands, breakeven for COS.UN is $38/ a barrel. I'd rather accumulate now while its out of favor, I mean i love that no one likes it at the moment. It's always best to the first at the party, though patience is required.

Actually I took the RICI index and made my own futures portfolio composed of mini futures back in Dec and Jan, I do the next month out and have the whole thing rolled over. It has treated me very graciously. But futures aren't for the faint of heart.

I agree we are on the same page, I have an extremely strong convinction for inflation and the next leg up in the commoditty bull market.  

 

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#15) On June 26, 2009 at 11:11 PM, UCBKID (< 20) wrote:

Way out of balance. Dont bet on too much commodity weighting "until you see the whites of their eyes". Risks. Currency/$$ goes up/Continued low demand/Concentration without diversification

Good luck. PS- I sold almost all of my commodity positions last June for a home run.

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#16) On June 26, 2009 at 11:43 PM, wreckhur (59.00) wrote:

Celgene is great, hopefully you will do well on the upswing.  CDE is blowing up and they are my personal favorite I would sub them in for another gold and silver.  For short term i think you are looking good but i would diversify a little more in the 1st quarter next year.

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#17) On June 27, 2009 at 1:09 AM, jatt22 (41.95) wrote:

ur  most  picks   looks  good . but da main thing  is  it  takes   quite  a  big  total  to  have  them  all  or  may  be  u  just  buying  small  positions  in  them 

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#18) On June 27, 2009 at 5:06 PM, streetflame (30.34) wrote:

In drilling & oil services I like ESV, RDC, NE, ATW, HP, WH, DWSN, NOV, TDW, GLF and DVR better.  RIG has a bit too much debt and DO has a bit too high PE compared to their competitors.  Or you can just stick with OIH, since most of these companies are going to behave pretty similarly.

speedybure, in regard to comment 8 above, how exactly do you hedge yourself?  Forgive me if looking at your portfolio and reading your comments I find it hard to believe. I'm short IOC and continue to look for commodity companies with low quality earnings like LNG, FXEN, CRZO, ANV, TRGL, GDP, DEL, IVN, WLB and JRCC to short alongside my long positions. I think in the short term a nasty little commodity correction is likely and people would be wise to stay diversified, hedged and unleveraged.

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#19) On June 28, 2009 at 1:29 PM, ttboydxb (28.95) wrote:

This looks a lot like my portfolio!  If we (and a few other here on Caps) are right we'll be fighting for the last tin of Caviar, and if we're wrong we'll be holding a tin, fighting for the best street corner to perform on!  :)

 

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#20) On June 28, 2009 at 4:06 PM, speedybure (< 20) wrote:

streetflame:

The biggest hedges I have,since my portfolio has quite a bit of oil and mining exposure are a lot of puts of dbo- double oil , and gdx, the mining index. I dpn't short anything, i play them with puts, yo uget the most bang for your buck 

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#21) On June 29, 2009 at 1:59 AM, kaskoosek (44.06) wrote:

I beleive in inflation, but I do not think your best bet right now is miners.

 

Most equities are good hedges against inflation.

 

 

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#22) On June 29, 2009 at 2:13 AM, speedybure (< 20) wrote:

kaskoosek:

I understand where your coming from but like i said before I want to be the first to the party, as I initiated most positions back in Nov & Dec. They have already returned 200-300% on average, which most people consider great for 4 or 5 years if investing. The same goes with Candian Oil Sands Trust, I loved it before and continue to do because most people think it is second rate. It is second rate, but only until oil reaches 100, then the valuation becomes more compelling relative to the rest of the oil patch due to thier huge reserve base.

You also have to be careful when you most equities are good hedges against inflation. This is true only for companies who rely on domestic sales for a small part of their total revenue. I also want to point out those ones who can pass the inflation costs to their customers are rare if we are to expirience the type of inflation I expect to see over the next 2-5 years.  

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#23) On June 29, 2009 at 12:36 PM, Bays (30.20) wrote:

I started an interactive brokers account which allowes me to trade on every exchange open to foreigners.

Do you mind me asking which one?  I can only buy stocks on either the TSX or NYSE... There are a lot of good foreign companies out there that I'd rather buy on their exchange instead of on the NYSE in USD.

BTW, great blog and thanks for sharing. 

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#24) On June 29, 2009 at 4:26 PM, speedybure (< 20) wrote:

Yeh I'd love to share, that's the whole point. yeh go to interactivebrokers.com and set up an account. I am currently living in australia but i opened my account in the states and my tax information etc still go to my apt in cali then forwarded here. 

I do not see why everyone doesn't use interactive brokers, I mean the trading feed are 99cents for us stocks, $2 for canadian, 3.5 for australian and 5$ for honk kong.

Did that answer your question :which one"?, sorry i didn't quite understand the question.

I hope that was of any help, if not just post another comment.

I'm in your boat. My other portfolio which is smaller than the one above: has mainly stocks from hong kong and the returns have been phenominal. There are many attractive candian stocks out there as well, mostly in agriculture, mining & oil.

I have more in depth analysis of select foreign equities at my website if you care to take a gander. http://www.comingcurrencycrisis.blogspot.com 

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#25) On June 29, 2009 at 6:39 PM, Bays (30.20) wrote:

Yes that did answer my question....  I'm Canadian so i have an a account with a Canadian brokerage firm. This is needed for my RRSP and TSFA, but I'd like just a cash account where I can buy foreign equites.   My Canadian account only allows me to buy on the NYSE and TSX. 

I am not really enticed to buy anything with USD right now for obvious reasons so I've only been buying Canadian stocks.  So like you, my portfolio is heavily weighted with resource based companies.   On the other hand, I do own CBQ.TO, a BRIC ETF which has China Mobile and Petrobras as it's two largest holdings. 

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#26) On June 29, 2009 at 7:26 PM, speedybure (< 20) wrote:

Bays:

Since you are able to buy on the TSX, two of my favorite equities in agriculture (i have done more than my fair share on research regarding wheat and potash) are Viterra : Vt.to, which recently quired one of my largest holdings (ABB Grain in Australia). They will have a worldwide reach in wheat pooling/handling/marketing etc and using conservative valuation inputs i.e WACC 15%, LT Growth 2.8%, the combined company is worth at least $20/share. This does not take into account the rise in the price of wheat I expect to happen over the next several years.

Migao- I really do consider the chinese Potash, it has extremely high pre-tax returns on tangible capital as welll as a great earninigs yield. not to mention a great cash flow analysis via DCF. They are also expanding capacity 70% in the next 14 months. Like Viterra, Migao is severly undervalued on all valuation metrics. I got a 25-30$ fair value using 17% WACC and 3% LT Growth.

Supposing you get the capabilities to trade worldwide, their are some great deals in Australia, due to the recent correction. I'm focusing mainly on agricultures and Uranium as I have for the most part full positions in the mining industry and select oil patches.

One last note: if you like petrobras (which I do as well, I just own it on the Bovespa), You may Like Petro-Energia - PZE 

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#27) On June 29, 2009 at 8:06 PM, Bays (30.20) wrote:

Thanks speedy,,,,

I've always wanted to add some agriculture to my portfolio.  I was looking towards maybe an index fund, but ill do my own dd on the above and see what I find.  

After looking at your website, I see we share the same macro outlook.  Having Jim Rogers on your side is always assuring too. 

 I also see a lot of potential in Australia as they will be in a prime position to easily export to Asia once they pick up again. 

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#28) On June 29, 2009 at 8:27 PM, speedybure (< 20) wrote:

Bays :

I actually moved here for a PHD program and to work internationally from a bit. I can say one thing, I don't see any side of a recession here. Here are a list of Australian Equities you should def check out:

NuFarm

Incitec Pivot

GrainCorp

ABB Grain - ABB Viterra will trade on the ASX as well

Atlas Iron

Woodside Petroleum

Santos

Austrlian Wheat Board

There are many others, most are listed under the ASX 200 

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#29) On June 29, 2009 at 8:42 PM, QwertyHero (< 20) wrote:

Are you a millionaire?  How do you own stock in 20 companies?

I own:

GE

INTC 

BLUD

SBLK

SNRY

PS: I suck at investing...

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#30) On June 29, 2009 at 10:02 PM, speedybure (< 20) wrote:

Sum are through options. I only has 1 stock during the crash and I made out like a bandit buying silver and oil futures from Nov - Jan. I  I also made well will oil futures on its way to 150. i bailed at 110 but got on board in the sixties. Remember the multiplyer on futures can be very high i.e silver = $5000 for every 1 it goes up. 

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#31) On June 29, 2009 at 10:27 PM, dave22q (< 20) wrote:

reasonable choices but a lot of duplication, I would cut back to 3-4 oil producers, 2-3 suppliers (RIG rather than DO), 2-3 steel (maybe add VALE & AKS), etc. For gold I also like AUY but you might want to go with 1 miner and the metal rather than multiple miners. for fertilizer I like POT and IPI but MOS is not bad. Generally, I ask if I really am equal between 2 stocks and if not I only buy the one I prefer. you might also want to add a shipper or 2.  DRYS, FRO or GNK are not low risk but will move with oil prices. I think your commodity bet is a good one if you don't have to show results in the next 6 months.

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#32) On June 29, 2009 at 10:43 PM, speedybure (< 20) wrote:

My focus and research has over the last year and a half has been in the PM miners, Oil and agriculture. As for the miners, Two of them are royalty companies which include silver, gold, oil, gas, potash. You can't really break up fertilizer companies as you did in your comment due to the fact some crops use potash, others such as srf or lrf. Then some mentioned above are in the crop protection business where there is a high demand for them such as australia. I made a mistake with Mosaic, which I used to own, it should have been Nufarm. I only have potash now because I bought some back in dec when it was trading at ridiculous prices.

 

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#33) On June 30, 2009 at 11:25 PM, SkepticalOx (99.51) wrote:

Concentrated bets can make you rich (if you have Buffett like investing abilities, or are damn lucky). It can also make you poor. No matter how hard you stare at that one basket, if it drops, all your eggs will go kaput.

If commodities and miners are such a sure bet, than it would already be priced into the price (especially with headlines of green shoots, hyperinflation, and potential stock market recovery). There are concerns (and valid ones at that), that things can get worse, or just plain not improve for a long while.

Now, I'm not sure how well or how cheaply you hedged your positions, but what do you know that the market doesn't know (especially with the market being bullish on almost everything)?

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#34) On July 02, 2009 at 11:23 PM, speedybure (< 20) wrote:

Just like an any profession it is superior forecasting that seperates one from the rest of the herd. I'm not saying I am one of those in the least but rather trading of fundamentals. Silver and Wheat have seen growth in world production but it has been vastly short of keeping up with demand. We have seen this through the last 10 years, with the exception of this pullback. As for Oil production is not increasing, in fact quite the opposite. I think we have reached peak oil, but the demand for it will still be there.

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#35) On July 03, 2009 at 10:01 AM, Bays (30.20) wrote:

Speedy,

Thanks for your list of Australian equities....

There is no sign of  recession where I live as well.  I live in Ottawa, Canada, and with the infusion of stimulus money going into government buildings, schools, and infrastructure there is a lot of work here.  

Couple Canadian companies you might want to take a look at are Aecon (ARE.TO) and SNC Lavalin (SNC.TO).   SNC's subsidiary, ProFac, has a huge federal government contract and will be benefiting nicely from the stimulus money. Aecon is Canada's largest infrastructure company and I suggest looking them up.

Disclosure:

I own ARE.TO

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#36) On July 03, 2009 at 12:43 PM, Bays (30.20) wrote:

Btw....

VT.TO is looking really good so far.... It's been a quiet day here at work (no holiday here in Canada) so I thought i'd give it a read.     This weekend i'll plug some numbers into my spreadsheets and see what kind of valuations I get. 

I'll keep you posted!

Have a good weekend.
Cheers

Bays

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