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.

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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?)
Hedge Fund’s Next-Generation
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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