November 28, 2007

Luckily for me, we aren’t really required to keep a regular diary for this assignment, just follow our investment portfolio over the course of the semester. I’ve been busy over the past month or so, and have been letting my portfolio ride.

Not much has happened over the past few weeks. As expected, the market has moved “sideways”, investors still unsure about the total effects of the sub-prime lending fallout. The weak dollar hasn’t really manifested into foreign money flowing into American markets, probably due to the sub-prime lending issues, and the general impression that the Fed may continue to lower interest rates (further handicapping the US Dollar).

However, none of that really matters for this assignment, since I am done! Here’s my final summary sheet:

Date	Action	Symbol	Amount	Price	Extended Value
8/30	Deposit	(Cash)			100000.00
8/30	BUY	AAPL	73	136.25	(9946.25)
8/30	BUY	BAC	199	50.21	(9991.79)
8/30	BUY	CAT	134	74.66	(10004.44)
8/30	BUY	CVX	115	87.19	(10026.85)
8/30	BUY	XOM	117	85.40	(9991.80)
8/31	BUY	PBW	472	21.17	(9992.24)
9/10	DIV	CVX	115	0.58	66.70
9/10	DIV	XOM	117	0.35	40.95
9/10	BUY	VMMXX	40154.28	1.00	(40154.28)
9/21	SELL	VMMXX	40154.28	1.00	40154.28
9/21	DIV	VMMXX	40154.28	0.0012	48.41
9/21	BUY	VEIEX	1269	31.66	(40176.54)
9/27	SELL	VEIEX	306	32.32	9889.92
9/27	BUY	FLY	443	22.58	(10002.94)
9/28	SELL	VEIEX	306	32.83	10045.98
9/28	BUY	DUF	550	18.25	(10037.50)
9/30	DIV	BAC	199	0.56	111.44
10/22	SELL	FLY	443	22.35	9901.05
10/22	SELL	BAC	199	47.78	9508.22
10/22	SELL	CAT	134	73.50	9849.00
10/22	BUY	AAPL	171	171.36	(29302.56)
11/28	SELL	AAPL	244	180.22	43978.68
11/28	SELL	CVX	115	85.98	9887.70
11/28	SELL	DUF	550	19.83	10906.50
11/28	SELL	PBW	472	23.25	10974.00
11/28	SELL	VEIEX	654	32.52	21268.08
11/28	SELL	XOM	117	87.92	10286.64
11/28	Withdraw	(Cash)			107398.27
11/28	Net Gain	(Yay!)			7398.27
11/28	% Gain				7.40

 

 

Market	Initial (8/28)	Final (11/29)	Net Gain/(Loss)	% Gain/(Loss)
DJIA	13256.78	13289.45	32.67	0.25
S&P 500	1457.66	1471.16	13.50	0.93
NASDAQ	2565.30	2663.41	98.11	3.82

The bottom line? I kicked butt!

Managing to outperform the market by at least 2:1 ratio (30:1, if you use the DJIA as the measuring stick) is something most professional investment fund managers would be proud of. Unfortunately, I can’t claim to be all that skilled. Really, I got lucky. A couple of my stocks really managed to carry me (AAPL and the PBW fund). Had I concentrated more on tech and foreign stocks, I would have done better. Of course, had I concentrated on blue-chips, I would have done worse.

My two experiments didn’t really produce spectacular conclusions either way.

The IPOs of Duff & Phelps and Babcock & Brown didn’t produce the IPO run-up of the late 90s, but I didn’t expect them to. Duff and Phelps has had a decent return of almost 9% over the two months since its IPO. Babcock & Brown had lost about 1% when I sold it after 3 weeks. Its gone down more since then.

Oil started, in August at about $80 per barrel. It has been getting close to $100 recently. The two oil company stocks haven’t really benefitted from the rise in oil prices as one would have expected. Chevron (CVX) is down 1.2%, while Exxon (XOM) had a decent gain of about 3% (note: both CVX and XOM paid dividends during the period, which made them gainers). The “Head vs. Heart” experiment really seems to have gone the other way on me. The PowerShares Clean Energy fund seems to have benefitted more from higher oil prices than the major oil companies. PBW was up almost 10%...So maybe there is something to investing with companies that are “doing the right thing”. Well, not really...In the case of the huge rise in oil prices, the “Head” should have realized that alternative energy sources start to cross over into financially viable territory. Formerly unprofitable energy companies become suddenly viable. Major oil companies are already profitable, and their profits don’t have a 100% correlation to oil prices. Therefore, with foreknowledge of a 30% gain in oil prices, I might have picked a clean energy fund with both my head and my heart.

The PowerShares fund success also brings up another point. Both of my managed funds did better than the market. Generally, professional fund managers are going to do the same or better than the market, so if I was going to take the “hands off” approach I used during the past month, I would probably be better picking a couple of managed funds. Granted, there’s a tradeoff, especially when it comes to tax benefits, but that’s another discussion.

October 22, 2007

I believe!

Yea, though I have strayed into heavy industries, dallied with banks, and foreign growth funds, my heart (and currently a huge chunk of my real-life investments) will always be with my first major financial success, AAPL.

In line with our most recent project, Apple filed an 8K today, announcing earnings for the quarter ended September 29th. Stellar results with things only looking up with the release of Leopard a few days away and the holiday shopping season fast approaching.

I'm gonna dump my loser stocks, FLY, BAC and CAT, and move those assets into AAPL. Yeah, I'm going to be waaay overweight on tech, and Apple, but guess what? Invest with what you know....and I know Tech, baby.

Action	Symbol	Quantity	Price	Value	Net Gain/Loss
SELL	FLY	443	22.35	9901.05	(101.89)
SELL	BAC	199	47.78	9508.22	(483.57)
SELL	CAT	134	73.50	9849.00	(155.44)
BUY	AAPL	171	171.36	29302.56
Cash				92.47

October 15, 2007

Once again, not much action on the stock front. AAPL continues its tear, briefly touching an all-time high, before falling victim to profit taking. Even with the retreat back from $171, it still leads my portfolio gainers, up 22% since the end of August. CVX had a earnings warning, so it's lost about half of it's gains from the past six weeks. Oil did break $86/barrel today, so I don't expect CVX to stay down for long. XOM is certainly moving up.

For class this week, we're supposed to look at some 10-K, 10-Q and 8-K filings for a stock we are interested in. Unfortunately for me, the stocks that I am currently looking at are all foreign, or ADRs. Sure, the ADR shares have to file quraterly, and annual earnings statements, but they do so using a 6-K form, which is used for pretty much any SEC form, so I would have to wade through the piles of 6-K forms to find the correct, corresponding filing. I'll probably just make it easy, and grab an obvious domestic firm, instead...probably a tech or communications firm...Comcast, Sirius/XM, or Google, perhaps.

October 7, 2007

Not much activity on the portfolio front this week. We talked about mutual funds in class, and I've already got two funds. The PowerShares clean energy (sector) fund and Vanguard's emerging markets fund. Both funds are doing very well and are only being beat by my Apple shares.

The markets aren't moving all that rapidly. The tech sector and Nasdaq are doing the best, up about 8.3% since the start. My portfolio is up 9.4%, led by AAPL, up 18%. As long as I stay ahead of the market, I'm happy.

September 30, 2007

Oh yeah, “one more thing”...Having worked for Apple for as long as I did, I have accumulated the vast majority of my stock portfolio in AAPL (thanks to the Employee Stock Purchase Plan). AAPL has been VERY good to me, but to “have all ones eggs in one basket”, is not a smart long-term investment plan. As such, I have been slowly moving shares out of AAPL, even though its had an incredible run, and picking up other stocks that I consider good long term options. Last week I traded some AAPL for more Boeing Aircraft (BA), to a point where I carry more in BA, than I do in XOM, so technically, I should drop XOM from this portfolio, since it’s no longer in my real-life “top five”. However, I’m not going to. For a short-term project, I expect XOM to do better, especially going into Winter, and the increased energy demands that come with the cold.

Bank of America (BAC), also paid their $0.56/share dividend last week.

Action	Symbol	Amount	Price	Extended Value
DIV	BAC	199	0.56	111.44
Cash				136.76

The running tally so far this semester:

My portfolio is up 5.86%

Nasdaq is up 5.31%
Dow index is up 4.96%
S&P 500 is up 4.74%

Yay me!
Of course, in either an appropriate, or ironic manner, my big winner so far has been...wait for it...AAPL - up 12%

September 29, 2007

Babcock & Brown IPO-ed on Thursday, opening at $23.00. It dropped to close at $22.70. I actually bought a few shares for my real-life portfolio at $22.58, so that’s the price I’ll use for this portfolio. Duff and Phelps’ offering went live Friday, opening at $16, and closing at $18.35. When I checked the price during the day, it was at $18.25, so that’s where I priced my shares for this portfolio. Bioheart delayed their IPO until at least next week, so I’m not going to “buy” any of their shares.

I’m a little surprised by the fact that perception of Babcock & Brown’s IPO was that it was overpriced. It really seems like a bit of a mistake for the underwriters (Morgan Stanley, Citicorp, Merrill Lynch, and Credit Suisse) to have made. However, it is only about a 1% drop at this point, so maybe that’s not too bad for an IPO in this market.

Action	Symbol	Amount	Price	Extended Value
SELL	VEIEX	306	32.32	9889.92
BUY	FLY	443	22.58	10002.94
SELL	VEIEX	306	32.83	10045.98
BUY	DUF	550	18.25	10037.50
Cash				25.32

“In other news” the Dollar hit another new low against the Euro, generally attributed to a weak inflation report, despite the Fed’s rate cut(s). So, investors are expecting the likelihood of another rate cut to increase. All the more reason to look at foreign markets for at least the next few months. Once the Dollar stabilizes, it’s probably going to be a good time for long-term investors to buy US stocks again. However, since this project is only 3 months long, I’m going to see what I can do with ADR shares (remember, this project disallows currency trading, and is restricted to NYSE and NASDAQ listings)