Gold & Oil Stocks Weighing Down Portfolio

THE ENLIGHTENED-AMERICAN PORTFOLIO SPREADSHEET

  • Enlightened-American Portfolio: +7.5% in 2012 (my actual IRR, including cash balance)
  • Dow Jones Industrial Average:+8.6%
  • Nasdaq: +19.8%
  • S&P 500: +12.8%
  • DJ Wilshire 5000: +13.4%
  • Russell 2000: +13.3%

With the exception of the Dow, the major indices are doubling my YTD returns (tripling in the case of the NASDAQ).  Not only is my large cash holding (26% of total assets) dragging on the portfolio but my large holdings in oil and gold stocks caused my portfolio to lose 2 percentage points in March while the general market rose. Still, I continue to remain positive on both sectors.

More on this topic (What's this?) Read more on Gold Oil at Wikinvest

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Not Much Action

With markets generally rising after a very brief, small drop last week, there hasn’t been much buying on my end. Some gold stocks have dropped a little & are starting to look attractive. In the meantime, I continue to do screening and research, most of which is published on Seeking Alpha:

Can GE Help Chesapeake Boost Natural Gas Prices?

Can GameStop Conquer The Short-Sellers?

18 Prospects For A Risky Market

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Portfolio Review: Cautious Approach Struggles To Keep Pace With Market

THE ENLIGHTENED-AMERICAN PORTFOLIO SPREADSHEET

  • Enlightened-American Portfolio: +7.3% in 2012 (my actual IRR, including cash balance)
  • Dow Jones Industrial Average:+6.1%
  • Nasdaq: +13.3%
  • S&P 500: +8.5%
  • DJ Wilshire 5000: +9.1%
  • Russell 2000: +8.5%

As I have often mentioned, my primary investment objectives are to outperform in down markets and keep within shouting distance during up years. 2012 has started with a serious bang and my portfolio is lagging most major indices by 1% – 6%. However, I stand by my cautious approach — when markets have logged their biggest gains is when investors should be wary.

More on this topic (What's this?)
DOW 12700 By January 2012!
Read more on Chun YU Works at Wikinvest

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2011 Q4 Hedge Fund Holdings

If you have a strong case for other managers I should include, send me an email or post in the comments below. Also, keep in mind that I use a perl script to parse these filings into the spreadsheet format and some information may be misrepresented. As always, YMMV.

More on this topic (What's this?)
John “Jack” Bogle Weighs In On The ETF Explosion
Oregon Fund of Hedge Funds
Hedge Funds Huge Returns
Read more on Lingui Development, Holdings, Hedge Funds at Wikinvest

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Buying Frontier Communications (FTR)

I opened a position today at $4.26 per share. Share prices have fallen drastically due to continued customer losses, declining revenue in its higher margin businesses, a large debt load over 3x EBITDA and concerns about the recent Verizon transaction that more than doubled the company’s size. Its current yield of 17.5% suggests the market is convinced that a dividend cut is coming. Even so, shares appear attractive. As with most telecoms, FTR generates copious free cash flow that should be able to cover debt payments and a substantial dividend payout. Even if FTR cuts its dividend by 50% or even 75%, it would still yield an attractive 9% or 4.5%, nothing to sneeze at when the 30-year US Treasury barely yields 3%. Even with a negative 5% growth rate for the next 5 years, I still see value in these shares and estimate FTR to be worth $6 – $8.

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Portfolio Review: Markets Shoot Out of the Gate In Jan

THE ENLIGHTENED-AMERICAN PORTFOLIO SPREADSHEET

  • Enlightened-American Portfolio: +6.1% in 2012 (my actual IRR, including cash balance)
  • Dow Jones Industrial Average:+4.1%
  • Nasdaq: +9.3%
  • S&P 500: +5.3%
  • DJ Wilshire 5000: +6.2%
  • Russell 2000: +9.3%

Yikes! With my large cash position, I am going to find it hard to maintain this pace if market keeps this up. No reason it should, though. More soon.

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