Some updates on my portfolio.

I threw in some more money to open a general investment fund, separate from my IRA. I'm going to aggregate the totals for the time being because I don't feel like calculating all that money twice.

Portfolio: Active since Janury 12th, 2006 (hoo, three months!). I've learned that since the last time I posted an update, I should probably post my exit points and growth expectations. Obviously the expectations will rarely be met, but if I'm aiming to hit my 25% growth target for the year, I'll need to be more stringent in in exit points.

  • Fidelity Blue Chip Value (FBCVX) (Currently 25% of my portfolio, price is up 3.53% since 1/13/06)
    Just a standard "conservative" mutual fund. From last time, I've liquidated my position down from 53% to 25%.
    Target: I'll be satisfied with 10% growth that it's been averaging per year.
  • Toronto Dominion Bank (TD) (Currently 17% of portfolio, price is down 1.58% since 03/31/06)
    My "safe" non-American financial group holding. No changes since last time.
    Target: $60 by October (for an annualized growth of roughly 9% with its dividends)
  • Yahoo! (YHOO) (Currently 8% of portfolio, price is down 2.95% since 2/23/06)
    What a stinker. It was down nearly 8.9% at its low last week prior to earnings; my stop-loss almost kicked in (10%) ... luckily earnings boosted it up to break-even before tapering down to where it is today. I'm ready to take the loss on this turd of a stock and drop it like it's hot.
    Exit: Next week, with a lesson learned in how not to buy turds of stocks
  • Southern Copper Corporations (PCU) (Currently 13% of portfolio, price is up 5.12% since purchase 4/6/06)
    The commodities have been blowing up lately. I'm not much of a gold/silver guy (practical value is overshadowed by sentimentalism towards the gold standard, imo), so I stick with the most useful of metals: copper. Copper is nearly everywhere - wiring, computers, etc. As China and India's demand for electronics increases, copper demand will continue to be strong. The downside to buying PCU was that it's located in a politically sensitive area (presidential elections runoffs will happen in late May, with the possibility that a strongarm like Chavez of Venezuela wins) ... but the company itself is very strong. It's paid annualized dividends of 10% consistently, and is also a strong performer. I think a lot of commodity stocks are pricing in futures, but PCU's is dragged down a bit because of political instability. It's current PEG is 0.49, whereas similar miners like PD have PEG of 1.5. When I decided to play the commodity companies, I decided to pick one large company (for stability) and one small one (upside).
    Target: Expect $110 by September, probably exit by October
  • Northgate Minerals Corporation (NXG) (Currently 24% of portfolio, price is up 2.2% since 4/20/06)
    I bought this earlier this week as my small-cap commodity company (net worth only $780 mil). Like PCU, this one has a low PEG, but there's also the risk their reserves may run out, unless they open up a new mine (they've found one and should hopefully get the clearance to start drilling later this year). This is an incredibly volatile stock (it was up 6% after I bought it, down 8%, now up again) and so I'm trying not to watch it for fear of getting a heart attack. I really like the long-term aspects of this company, and I'm hoping that their new mine will yield great reserves and continue to boost this stock.
    Target: Conservatively, I want to see $5 by October, but I really think this one may blow up if they get that second mine running and investors realize that it's incredibly undervalued.
  • Barnes Group (B) (Currently 9.5% of portfolio, price is up 18.94% since 2/23/06)
    I bought this the same day as Yahoo! because I couldn't decide which one I liked better - Barnes was a more fundamental company, but Yahoo! was ... a company I was familiar with and respected. What an idiot I was. I should have invested it all into Barnes instead.

    Barnes announced their earnings Wednesday after the market - the stock had been creeping up a few percent a day prior, so I was expecting good news.

    Barnes hit the trifecta on "good news:" they announced higher than expected profits and revenues, they INCREASED their forward guidance (what they expect to make in the future), they announced an INCREASE in their dividends to 2% a year, and they announced a 2:1 stock split.

    Talk about being blown away. The stock opened high, and closed higher; the thing has netted me 20% in two months! (After chatting with Bert, he bought in, too!)

    Target: $60 (pre-split) by '07

I've been doing a ton of research lately into additional stocks that I think might be promising (BPT, FELE, BBBB, JLG, NFI, WWW), but one in particular struck me today as being quite promising.

Ever since my Barnes struck gold, I've been looking more at mid/small-caps. I think I finally understand Bert's "shotgun" approach to investing; you invest into many different companies and hope one hits. You set stop-loss limits on each one so you limit the loss, and you reap the rewards from one big hit. For example, my first shotgun group was B and YHOO. YHOO tank, but B hit big. My second group (only like a month old) is TD, PCU, and NXG. TD can stay even, and I'll be happy as long as PCU and NXG perform. I want to add one more company to that shotgun group, and I'm looking at Cogent, Inc (COGT).

Cogent, Inc. is a biometrics company with strong financials (high assets, low liabilities, increasing revenue growth, steady R&D investment). They have a standard P/E (24) and a low PEG (0.88) for a software company. The company has a market cap of 1.61B which makes it still a mid-cap, but relatively unnoticed (average volume is only 885K/day). Unless demand for biometrics dropped (doubtful), they should continue to post strong earnings. They are announcing earnings next week, so I'll need to decide whether or not to buy them by Monday. I'm going to sleep on it for the next few days and think about it. If any stock market wizards are out there, I'd like to hear your thoughts on COGT. I've attached a chart below, which shows that even COGT is due for a nice rise as well...

Posted by roy on April 21, 2006 at 05:01 PM in Finances | 7 Comments

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NATE (guest)

Comment posted on April 28th, 2006 at 02:58 PM
Use the charts on Etrades website they are much better. And use the msn money stock screeners. Low debt to equity ratio, low p/e, any volume, and look at the price to sales and price to book ratios (the lower the better). Pick something that has consistent earnings growth and diversify, ten percent is weak!
I hit at least 20% even after 9/11. Just move your money to gold stocks when the market is weak! Oh yeah and insider trading is key. If a top exec sells over ten percent of his stake get out. It's all free information so use it people!!
Comment posted on April 22nd, 2006 at 09:53 AM
I wish I could past my fear of the stock market in general. I can't seem to forget "black Friday" or whatever it was called. I stick to mutual funds, but would love to gamble a little. I always play it safe. Part of my nature I guess.
Comment posted on April 21st, 2006 at 10:32 PM
I guess the portfolio has become the new poker for you in more ways than one.
Comment posted on April 21st, 2006 at 08:53 PM
so... now that you're thinking...
try to think what mutual funds are.. and what their point is... =P
Comment posted on April 21st, 2006 at 09:39 PM
a waste of money?

i think they're good for people who don't want to spend the time researching - a good mutual fund makes ... 10% per year for about 10 years?

i think the biggest change for me thus far is adjusting to the fact that 15% returns = average.

Comment posted on April 28th, 2006 at 03:51 PM
i think a mutual fund is a great way to diversify yourself into a market you don't know too much about (or use an ETF...).

eg. you want to get into some emerging market like India, Japan or China, but don't know too much about them... so you buy IIF, EWJ and FHKCX.

i'm a big fan of the Motley Fool as well... I subscribe to their Hidden Gems newsletter (picks of small-cap companies). they do pretty good overall, but there's still risk involved.
Comment posted on April 28th, 2006 at 11:12 PM
I've actually been eyballing EEM as a good emerging markets ETF, although if Fidelity has one, I'll have to look at theirs. Sweet!