There is a lot of money/capital in the system right now, probably in part to the Fed. So a secondary part of my thinking is that the US (and probably other countries as well) will be using that money to build out infrastructure and larger capex projects as confidence improves that the world will not be ending tomorrow. A corollary of this thought is that I'd rather be in quasi-growth stocks right now as opposed to value/income stocks.
Finally, China is the potential anchor in my mind. I think they have over-built, I believe that a planned economy like theirs is not as efficient as we'd like to think, I think that as their labor costs rise (and it is happening) some work will be shifting out of China to other low-cost countries (Philippines?). China is still a long term growth story in my mind, but until it gets a solid middle/upper-middle class like Western Europe and North America have and the internal demand push that will cause, it will have some ups and downs. I believe this has repercussions on basic material prices and also potentially luxury goods which have had a great market in China.
20 Largest Non MFI Holdings
Here are my 20 largest non-MFI holdings. A few quick thoughts about each one:
| Stock | Avg Cost | Current Price | Dividends | Gain per Share | Sum of Shares |
| 493.89 | 502.33 | 8.16 | 16.60 | 294 | |
| GNW | 7.10 | 12.59 | - | 5.49 | 9,000 |
| TC-PT | 15.43 | 19.33 | 0.81 | 4.71 | 5,500 |
| 17.30 | 24.27 | 0.80 | 7.77 | 4,356 | |
| GTAT | 3.39 | 6.27 | - | 2.88 | 14,000 |
| 11.25 | 11.39 | - | 0.14 | 7,269 | |
| AOD | 3.95 | 4.02 | 0.11 | 0.18 | 18,816 |
| 22.21 | 21.92 | 1.08 | 0.78 | 3,389 | |
| SLCA | 20.29 | 22.85 | 0.12 | 2.69 | 3,018 |
| 51.46 | 47.00 | 0.50 | (3.97) | 1,413 | |
| BBEP | 15.44 | 17.76 | 0.47 | 2.79 | 3,584 |
| TCRD | 14.73 | 15.10 | - | 0.37 | 4,200 |
| CSQ | 8.37 | 10.05 | 1.46 | 3.13 | 5,746 |
| 22.97 | 21.70 | 1.37 | 0.09 | 2,211 | |
| SAI | 14.84 | 15.35 | - | 0.51 | 3,000 |
| 12.75 | 12.85 | - | 0.10 | 3,000 | |
| 9.85 | 9.25 | - | (0.60) | 4,000 | |
| NSU | 3.03 | 3.40 | - | 0.37 | 10,109 |
| TGONF | 8.00 | 12.78 | - | 4.78 | 2,500 |
| BAC-WTA | 5.01 | 7.67 | - | 2.66 | 4,000 |
AAPL - really exploded of late upwards. I believe people realized the selling was overdone. It is my largest single holding and is finally in the black. While I still believe in the AAPL story, I may (ahem) pare back my position a bit in a rebalancing move. They are now 30% bigger than my 2nd largest position. We will see, no big rush in my mind and I would really need something else I wanted to buy.
GNW - they have pulled back a bit since their recent earnings report. They do have several short term headwinds. First they do have pretty significant exposure to Canadian and Australian housing markets, both of which could be impacted in commodity prices crash. Secondly, their book value will drop as interest rates rise due to large bond portfolio. I used to think this would be offset by new money getting invested at higher rates, but it seems to me they already had a portfolio that was at higher rates. They are still way under book value and even way under what will happen to BV in rates go up another 100 basis points. But I will likely pare my position a bit here as well.
TC-PT - just has had an incredible run. They have gone up as markets believe China is a bit better and probably more importantly, TC seems to be turning the corner with their major copper project. I still think they have a lot of upside, TC is at $3.75 and $4.50 strikes me as a reasonable valuation barring a total crash in copper. There is kind of a 5:1 relationship, so a 75 cent move in TC would be $3.75 in TC-PT. I will almost certainly hold TC-PT for a full year as I do not want to pay significant short term taxes and I still believe in the upside. I started buying on April 2 and am sitting on 20K (using my factor) of capital gains.
CSCO - Had a bit of a fall from grace with recent quarterly earnings. I view CSCO as a core long term holding and I view as one of the great American companies. I will just hold, collect dividends and reinvest.
GTAT - I am up over 80% on most recent purchase. It is tempting to sell to lock in the gains. But kind of like TC-PT, I still strongly believe in the company and with a rebound in solar and if they break into Sapphire business more, this could easily by a $8 to $10 stock. On top of that, I am looking at $40K of short term capital gains and have no desire to pay 40% of that to Uncle Sam and Connecticut. I will assuredly wait until next April for those gains to become long term.
KLIC - I am often wrong and certainly not qualified to give advice, but I am very excited about the prospects of KLIC. Their income is a bit down right now, but I fully expect that to rebound in next 12 months as capex spending expands. Then they have so much cash they will either, (1) start a dividend, (2) purchase stock or (3) get the attention of an activist investor. If my holding in KLIC was not alreay large, I would be adding at these prices.
AOD - this is a closed end fund that pays a 8% dividend. They trade at $4.02 and have a NAV of $4.70. Highly attractive in my mind, 'enough said.
INTC - I mentioned CSCO as a core holding and a great American company and I would place INTC in that category as well. I really do not care about their day-to-day stock price. They are a brilliant engineering company and they are on the fringe of breaking into major new markets. Like KLIC, it is tempting to buy more under $22.
SLCA - this a pure play on the silica used for Fracking. They are a growth stock, so I want to stay with them even though they feel a bit fully valued.
RIG - I am not sure why RIG has wandered down since I bought them. Price of oil is solid and there seems to be plenty of demand for their expertise. Perhaps there is still some overhang from the Deepwater Oil spill and until that gets settled the stock will be stagnant. I believe by all metrics they are a strong buy and one I would buy more of on continued weakness.
BBEP - I was thrilled to buy this specialty oil and gas company on the weakness during the reported LINN SEC investigation. I am VERY happy to collect my 10 to 11% dividend.
TCRD - I got these shares when they announced their secondary. That is often a very good time to buy stocks (did same with SLCA, but missed that opportunity on GA). These business development companies are difficult to value. But everything I read makes me think this is best of breed at current price.
CSQ - another CEF, I have owned CSQ a long time. They also have a 8% yield and trade at almost a 10% discount. I actually did not realize they were so discounted to NAV. This would also be a good spot for new money in my portfolio.
STO - has not been a great performer. But with all the unrest in Middle East, I just like the idea/safety of owning Norwegian oil. Pays a solid dividend and by all my measures in one of the cheapest (if not the cheapest) major oil and gas producers in the world. I will not be selling any time soon and could add more on pullbacks (as I did recently ay $20.68).
SAI - this is more of speculative play. I think the stock is cheap and there was a lot of speculative option action on them so I bought. I will hold through their September earnings and then re-evaluate.
ACAS - I think that current price is a steal (book value north of $19). I have a buy order in, but will need to revisit price. If I sell some AAPL or GNW, may move into ACAS.
SBS - down a bit since I bought a little too early. I do think that some emerging markets are oversold, so I bought back in. I am also tempted to add more at $9.25. Certainly on a capitulation I will buy more.
NSU - kind of like TC-PT, in the commodity space which I am worried about. But they are so cheap, I am hopeful that offsets weakness.
TGNOF - my weird exposure to European financial space. I think they are exceedingly cheap and have a buy order out there if drops a bit more. Way under book value.
BAC warrants - long term hold. Will definitely add on weakness.
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