Helical Portfolio Update - 18 months in
A little holiday post, now that I have cleared my 'quiet period' on the Helical Portfolio as of 6/230/2012. I've blogged on this port for 1.5 years now, and done well with it. First the numbers, then the changes.
The portfolio ended June at $70,029.77 and held $20,235.57 (29%) in cash (counting trades still unsettled on 6/30). The portfolio has a CAGR from its introduction in 12/31/2010 of 24.9% and the IRR has been 18.7%. I added $5,000 4/10/2012. Year to date the portfolio is up 24.4% counting the added cash, and 15.5% not counting it (adding cash always helps). I don't expect this kind of performance to continue long term, but it is nice.
Changes in the Helical Portfolio in June were as follows. As noted, I reduced my holding in Genomic Health (GHDX) for risk alignment reasons [sold 40sh on 6/13/2012 for $1,356.16]. I also gave in to my frustration with JNJ, selling it from the Helical portfolio, though I still own some in my IRA [sold 60sh on 6/22/2012 for $3,985.31]. Following the Supreme Court decision on the affordable care act, I added health insurer United Health and more Wellpoint, [bought UNH, 50sh on 6/29/2012 for $3,018.50; WLP 40sh on 6/29/2012 for $3,018.50 for $2,646.20. I had previously sold some Wellpoint in April to reduce risk in case the court decision went badly. Many (the market certainly) see the court decision as potentially bad for insurers, but I do not necessarily think that to be the case (more on this later).
I was wrong in my consideration that the mandate would be overturned -- well, right that it did not stand up to the commerce clause, but wrong in that it was deemed OK as a tax. I rather like the decision (weird though it was - again more later) as it alleviates some of the 'slippery slope' concerns I would have had if the mandate was deemed acceptable under the commerce clause. Yet, I did get that better price I had been hoping for when I sold some WLP, so all is well (right?). Still, I was overly impulsive in my buy, as there has been continued weakness in both these shares. I am on the fence if I will add still more (one or either), and at what price.
The portfolio and it weighting are as follows (after 7/3/2012 with the total value of $70,946.37).
Symbol Qty Mkt Value % of Port Risk AFAM 200 $ 4,580.00 6.5% Medium BRLI 200 $ 5,484.00 7.7% High CAH 100 $ 4,289.00 6.0% Low CVS 100 $ 4,783.00 6.7% Low GHDX 160 $ 5,766.40 8.1% High HCN 50 $ 2,959.00 4.2% Low ICLR 300 $ 6,981.00 9.8% Medium MAKO 200 $ 5,192.00 7.3% High MR 100 $ 3,030.00 4.3% High UNH 50 $ 2,744.00 3.9% Medium WLP 80 $ 4,902.40 6.9% Medium Cash $ 20,235.57 28.5% Low $ 70,946.37
I linked the 5 day yahoo charts to each of the holdings to show (the curious) how they responded to the ACA decision. Teh insurers WLP and UNH have fallen since the ruling, but I still consider them only medium risk companies. Home health company Almost Family initially sold off, but has since entirely recovered. Expansion of insured rolls and thus services should serve the diagnostic industry well, so BRLI and GHDX were strongly up on the ruling. Similarly, Cardinal Health and CVS should benefit. MAKO Surgical and Mindray did not respond dramaticly, they may benefit, but perhaps not so clearly as the law does contain a tax provision on medical devices that will affect them. ICON and Health Care REIT responded well to the decision, but perhaps for 'rising boat' reasons. I don't think the ruling is all too directly related to their businesses, but indirectly could be beneficial, particularly as it allows others to operate with more certainty (such as the practices that rent medical office building from HCN or the pharma companies that contract with ICLR).
Subjectively assessing risk as previously described, I feel exposed as follows:
High 27.4% Medium 27.1% Low 45.5%
This 'structgure' comfortable for me given my intent to be a bit risky in this portfolio, but also reflecting my continued unease with the market at this time.
Enough for now, more on the insurers in a later post.