a friend asked and here's the answer
After looking at this almost two week old website, a friend e-mailed with the question, "ok, so what are you buying today or thinking of buying and why". Fair question since all I've done so far is point out that: Sirius has done well in 2005; Citigroup and JPMorganChase would have been good investments to make over two months ago and there may still be upside; Time Warner has significant potential but only if managed; and short term CD's are very attractive parking spots.
Well, it's the holidays so I'm not doing anything now and am not thinking about what to do next. I'll leave this time to the market professionals, those managing tax positions and fund managers dealing with perception issues in their year end statements. So, in answer to the question I'll list what I did do between Thanksgiving and mid-December.
----Reinvested the proceeds from Treasuries and CD's that matured in November, primarily in 6 month CD's at 4.25% and a one year CD at 4.35%.
---Bought positions in ETFs as follows: EEM(emerging markets)---I mostly missed the emerging market party of 2005 and now this is the safest and least expensive way that I know to stick my toe in the water. Events in Bolivia will cause concern about Latin American momentum; PHO(global water)---brand new ETF, and long term water seems like a good bet to me. Hmm, may be a reasonable way to play a very granular market; FXI(China)--I added to an existing position for no other reason than that global asset allocation should suggest some level(?) of exposure to the fastest growing major economy; EWS(Singapore)--Just in case this fiefdom becomes the Zurich of Asia, I want some exposure.
---Added to positions in the following mutual funds: FSTMX and FSEMX(Fidelity Total Market Index and Fideltiy Extended Market Index). Both of these index funds have a 10 basis point management fee, give broad based equity market exposure, have minimum expense, limited tax exposure, and limited surprises outside of the market itself. FSTMX is large cap U.S. and FSEMX is mid-cap and small cap U.S.; TAVFX(Third Avenue Value Fund) a mid-cap global fund with a limited number of positions, limited turnover, and an excellent track record. An added bonus is that their quarterly newletters are well written, thoughtful, and seemingly honest; FSCOX(Fidelity International Small Cap)--This relatively new fund is in the early stages when managers have the liquidity and thoughts "in the bank" to do well, and I've had good experience with a larger American Century fund that has the same mandate; FJSCX(Fidelity Japan Smaller Companies)--this has performed well, and earlier adds have worked. There are not too many ways for individual investors to play Japan below the large cap level.
---Bought the following individual stocks: New position---BMY(Bristol Myers)--5% dividend, top two shareholders are Capital Group and Morgan Stanley Investment Mgmt., beaten down like most big pharma, and big but not too big to be bought. Added to PFE(Pfizer)---at this point, it's almost either sell painfully or buy more. I'm operating on the premise that big pharma, like large cap finance for a long time, has become cyclical and will rebound when calm arrives, and especially the best companies like PFE. And the dividend pays for the wait; Added to GE---I just like the company, its business portfolio management, and either its foresight or public relations as now it's become an industrial environmental services concern. I have owned various levels of GE since the mid-80's.
---Sold the following: FFRHX(Fidelity Floating Rate High Income)--This mutual fund that invests in short stubs of LBO type debt had disappointed in a big way, and was yielding less than 50 basis points more than money markets while having principal risk and a higher expense ratio. This was a relatively large position; GNLB(Genelabs)--I had traded in and out of this biotech since the mid-90's, always buying it between $1 and $2 and selling between $3 and $5. After a several good round trips, this one didn't work and I gave up at 45 cents; CRDS(Crossroads Systems)--I had ignored this remnant of the late 90's in a small account and was actually surprised to see the amount of my loss. At this point it feels like a gift for tax purposes. But when $80 a share goes for 80 cents a share, even if it's not that big, it's startling; ALTH(Allos Therapeutics)--- this biotech was once going to cure cancer. Hopefully it still will. $11 to $2 for tax purposes, with no conviction left.
That's it.
Well, it's the holidays so I'm not doing anything now and am not thinking about what to do next. I'll leave this time to the market professionals, those managing tax positions and fund managers dealing with perception issues in their year end statements. So, in answer to the question I'll list what I did do between Thanksgiving and mid-December.
----Reinvested the proceeds from Treasuries and CD's that matured in November, primarily in 6 month CD's at 4.25% and a one year CD at 4.35%.
---Bought positions in ETFs as follows: EEM(emerging markets)---I mostly missed the emerging market party of 2005 and now this is the safest and least expensive way that I know to stick my toe in the water. Events in Bolivia will cause concern about Latin American momentum; PHO(global water)---brand new ETF, and long term water seems like a good bet to me. Hmm, may be a reasonable way to play a very granular market; FXI(China)--I added to an existing position for no other reason than that global asset allocation should suggest some level(?) of exposure to the fastest growing major economy; EWS(Singapore)--Just in case this fiefdom becomes the Zurich of Asia, I want some exposure.
---Added to positions in the following mutual funds: FSTMX and FSEMX(Fidelity Total Market Index and Fideltiy Extended Market Index). Both of these index funds have a 10 basis point management fee, give broad based equity market exposure, have minimum expense, limited tax exposure, and limited surprises outside of the market itself. FSTMX is large cap U.S. and FSEMX is mid-cap and small cap U.S.; TAVFX(Third Avenue Value Fund) a mid-cap global fund with a limited number of positions, limited turnover, and an excellent track record. An added bonus is that their quarterly newletters are well written, thoughtful, and seemingly honest; FSCOX(Fidelity International Small Cap)--This relatively new fund is in the early stages when managers have the liquidity and thoughts "in the bank" to do well, and I've had good experience with a larger American Century fund that has the same mandate; FJSCX(Fidelity Japan Smaller Companies)--this has performed well, and earlier adds have worked. There are not too many ways for individual investors to play Japan below the large cap level.
---Bought the following individual stocks: New position---BMY(Bristol Myers)--5% dividend, top two shareholders are Capital Group and Morgan Stanley Investment Mgmt., beaten down like most big pharma, and big but not too big to be bought. Added to PFE(Pfizer)---at this point, it's almost either sell painfully or buy more. I'm operating on the premise that big pharma, like large cap finance for a long time, has become cyclical and will rebound when calm arrives, and especially the best companies like PFE. And the dividend pays for the wait; Added to GE---I just like the company, its business portfolio management, and either its foresight or public relations as now it's become an industrial environmental services concern. I have owned various levels of GE since the mid-80's.
---Sold the following: FFRHX(Fidelity Floating Rate High Income)--This mutual fund that invests in short stubs of LBO type debt had disappointed in a big way, and was yielding less than 50 basis points more than money markets while having principal risk and a higher expense ratio. This was a relatively large position; GNLB(Genelabs)--I had traded in and out of this biotech since the mid-90's, always buying it between $1 and $2 and selling between $3 and $5. After a several good round trips, this one didn't work and I gave up at 45 cents; CRDS(Crossroads Systems)--I had ignored this remnant of the late 90's in a small account and was actually surprised to see the amount of my loss. At this point it feels like a gift for tax purposes. But when $80 a share goes for 80 cents a share, even if it's not that big, it's startling; ALTH(Allos Therapeutics)--- this biotech was once going to cure cancer. Hopefully it still will. $11 to $2 for tax purposes, with no conviction left.
That's it.
posted by John Borden at 9:31 PM
1 Comments:
It would be interesting if you tracked the performance of these choices over the next year and revisited this. But don't have big expectations for Bristol Myers--the mgmt. culture is too thick.
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