What's left behind
I considered calling this blog entry "Too Soon to Gloat?" but, really, it is too soon. My massive slash and burn sale last week - I sold 2/3 of my entire portfolio, and 3/4 of the stock portion; has saved 1.5% of paper losses on my entire portfolio, net of commission. So that's great, but I'm still not sure that we won't get a reversal and get up to my target of S+P 1920 before we see the big pullback. I'm waiting for the big pullback and expect it; and I intend to get back in, I never lost faith in stocks.
So what *didn't* I sell? Well, let's go over it:
I kept the corporate junk fund, Fidelity Capital and Income, because I think it's well managed, because I've had it for 9 years and it does well in most markets, and because I've done well just keeping my hands off it. Same logic for the convertible fund, the emerging markets debt fund. I kept the gold miners fund because - no good reason, it's been a pig. I should probably sell it but it has shrunk so much it makes almost no difference, it's less than 1% of the portfolio now. 5% is my start position size; this position has shrunk by about 60% while the overall portfolio more than doubled in value.
I kept the IAU stake. I don't really even believe in investing in gold this way, but I bought this to balance out the decline in the gold miners. It's a small stake, about 4% of portfolio. I still believe in diworseification :/
Now, for equities:
I kept PBPB because it's a long term bet. I expect them to open a lot more locations over the next 5 years. The stock price may do things over that time; I'll be more interested in the number of locations they can open.
I kept PCL because it's a 20 year bet. They are an REIT that owns productive timberland. Stock price fluctuations, jobs reports, Fed decisions simply don't change the value of the underlying very much. Beetles do, but PCL doesn't own any of the beetle-infested territories. So that's that.
I kept the TTWO because I think it's just horrendously misvalued with regard to future earnings potential - as in, maybe undervalued by a factor of 10 or more. This is not my usual "hey, this is 15% undervalued" kind of buy. They are a studio, basically, and they keep churning out massive hits and raking in tons of profits - and I think the market *also* is underestimating the value of their long tail/intellectual property. Cramer had the CEO on this week, and they both agreed with this thesis - I bought them several months ago, so I was just amused to see that interview. I could be wrong about this thesis - easy for a company like this to just totally miss a trend and fall to pieces - but if I am, I'll just take a bath on it.
I kept the GCVRZ despite the absolutely wretched FDA committee report on alemtuzumab because, in the end, the committee recommended 17 to 0 (plus 1 abstention) that the medicine be approved. I've already lost 80% of the value of my initial stake; I think the drug probably gets approved late and hits one sales milestone, which would make the warrant's true value $1 (currently $0.40); but I'm sure not betting any more money on it.
And that's it, folks, apart from a 0.4% position in a European equity index that was the result of a typing error 10 years ago and which isn't worth the commission to correct. I'm 70% in cash. So - if you thought I owned something that's not mentioned here, you're wrong.
Enjoy this Mae West market: by which I mean: Buckle your seatbelts, folks - next few months are going to be a bumpy night.