TGONF on TGIF

No, I do not have dyslexia.  But on a down Friday, I was actually up. One big reason was the quietest stock in my entire portfolio TGONF. As those of you who memorize my blog may recall, this is a Dutch financial firm that is trading well beneath book value.  It is very lightly traded on pink sheets, so lightly traded that I may never be able to sell my shares!  I actually have a relatively sizable position for such an esoteric stock. It is my 11th largest holding, yet a rarely mention it here. They wee supposed to have a report out today, but I can not find it. I suspect that is the reason for the 6% pop.

I did sell my TWM (inverse, leveraged ETF of Russell 2000) this morning. I actually had relatively good timing and got $50.72 (though it got as high as $51.35). So I made 1/2 a percent, but as it was ten percent of my total portfolio, it was still a material gain. Why did I sell it?  It made me too nervous to have that much in a leveraged position. My track record on being short something is pretty mediocre. Even though I kept telling myself it was a form of insurance, I still bit my fingernails at every swing in price.

Today was an extremely weird day. Markets opened up way down, then battle back and then fell down a bit. My portfolio performed very well, I was actually up nicely. The TWM and TGONF gains helped. But GTAT also did well, up 1.5% on news that Morgan Stanley is accumulating a position.

I also got to book three dividends today. TC-PT was the big one, with smaller monthly divvies from O and OIBAX.

My Top 20 Stocks of All Time

At the end of the day, you do want your stocks to go up.   As people may know, I have a spreadsheet in which I have kept track of every security I have bought (not including college funds or 401k) since 2002. Looking at the data in totality, I have owned about 1,070 different securities in that time. My total gains (using my factor) on all those has been $831,000.  But I thought it might be interesting to see if the 80/20 rules holds. Have I had 80% of my gains within 20% of my holdings? Interestingly enough, the answer is an easy yes!  My 15 best stocks (recall out of over 1,000), represent 80% of my gains (of course some stocks can be negative).

I have listed below the top 20.

Stock	Gain	Cumulative Pct of Total Gain
GTAT	100,552	12.1%
IST	61,405	19.5%
GNW	55,942	26.2%
SBS	54,059	32.7%
HIMX	46,620	38.3%
VR	45,857	43.8%
TC	38,861	48.5%
PVD	37,277	53.0%
NUS	36,439	57.4%
CSQ	35,537	61.7%
RNR-C	33,480	65.7%
ENH-A	33,076	69.7%
PM	30,776	73.4%
KMF	27,528	76.7%
PRE	27,235	80.0%
JPM	26,589	83.2%
OMG	26,005	86.3%
HFC	25,350	89.3%
CSCO	25,276	92.4%
GA	25,108	95.4%

Definitely some names on the list current readers know.  HIMX is impressive on the list as I only owned them for 2 months.  That 50% gain was nice.  NUS still did pretty well, despite late fall from grace.  They were up 5% on indications the China scare was over-blown.

To put things into perspective, with my factor I have 21,000 GTAT shares and 9,000 GNW shares.  So that would give people some idea of what a $1.00 move in share price would do to the gains.  I also still own SBS, I am tempted to buy more as they dipped under $9 yesterday.  CSCO is on the list more as a function of size (I have a lot of shares).  The RNR-C and ENH-A were both preferred stocks that sold for about 50 cents on the dollar at the bottom of the scare in 2008 and early 2009.  I felt they were relatively risk-free and bought quite a few shares and made quite a bit of $.  VR was also a late 2008 buy that I got very cheap.  I look back at those deals now and wonder why I did not bet the entire house on those stocks.  All three of those were virtually guaranteed doubles.

Not too many MFI stocks here.  When I buy MFI tranches, my $ in individual stocks are lower (though I am ratcheting up). So it takes something great (like NUS going up 200%) for an MFI stock to crack the top 20.

At Least It Is Warm

I am in not so sunny Bermuda today.  While it is a bit humid and periods of showers, it is at least warm (about 70). 2014 continues to be a struggle. I am doing ok on a relative basis - beating R3K by 1.13%, but it is hard to get excited about being down 2.6% thus far.

Investing is probably 75% mental.  Not to get too excited when markets are rising sharply and not to get too bummed when markets are falling.  That is why many stock advisers say to use dollar cost averaging. That way you take your emotions out of the equation.

One thing I hate about owning TC-PT is there is so little information on them. I know they go x-dividend right around now, but not sure of the exact date.  All I know is that the dividend gets paid on February 15th.  I sent a note to their IR department, but apparently no one is home.

Just two trading days left on my February portfolio from 2013. It has definitely shed some gains - it was up about 92 or 93% at one point.  Now it is "just" up 76.7% (the benchmark is up 20.4% in that stretch).  Friday's closing pricing are what i will use to finalize that tranche for record keeping.  I will likely not sell the shares until Tuesday, just to make extra sure I get the LT capital gains rate.  And I will buy the new tranche around noon on Monday. There is a decent chance I will carry AAPL over, though I will need to add some shares to make sure it is 1/5 of total.

I was very tempted yesterday to sell 1/3 of my GTAT when they were a bit over $10.  It is an out-sized holding for me. As you may recall, I bought that 1/3 in early December when they had the secondary offering.  The average basis for me is about $8.80.  But I did not sell as I believe in the GTAT story.  It will be a bumpy ride though.

In NY On Tuesday ==> Not Feeling So Good

In the big Apple today.  Had to get up VERY early this morning.  I am usually a pretty healthy guy, but with the travel, the cold and sick kids, it appears to have caught up with me today.  I have all the classic symptoms.  And it sucks as I fly overseas tomorrow.  That just sin't going to be much fun - when you are all congested. Hopefully I can sleep ok.  I just went through my medicine bag and it looks like the best I have is some basic Bayer aspirin.  I have some Tylenol PM, but I have been taking DayQuil all day and I do not want to take too many doses.

A couple of weird days in the markets.  On Monday, GTAT went up 6% as I think they had some tail winds from the ABC interview of Tim Cook.  That was enough to make the day flat for me.  Then AAPL dove today (looks like I will buy for Feb tranche!) and at first GTAT dove to, but then people woke up after their first cup of java and realized that GTAT is not YET a material supplier to AAPL.  KLIC had a stunning day today (Kulicke & Soffa Reports First Quarter 2014 Results) up 11%. Post their earnings call, I am extremely bullish on KLIC. So I ended up about 1% today.

I did made one move that I may regret. I bought a very large hedge in TWM (10% of my total portfolio), which is a 2x short of IWM.  I am worried about the markets being too extended and wanted some downside protection.  Has not looked too smart so far as that was clearly the bull call. The position is off 1.25% so far. And for some reason, the futures look very good tomorrow, tonight.  But, even with this hedge, I was up 1% on the day overall.  I will keep it in place for a week or ten days, but no more.  These leveraged shorts have never worked well for me.

Good night.

Takeaways From Barron's

I read through the weekly Barron's magazine this weekend.  It was interesting (as usual).  I would suggest that anyone who reads my blog and has real money in the markets should subscribe.  This was the second of three editions with their annual round table.  There is certainly no consensus amongst the panels (round table-ists?).  One guy, Marc Faber, is pretty much Dr Doom & Gloom.

One item that caught my eye was how down people are on China.  It wasn't just a little.  Here are some quotes:

China acknowledged publicly some of the climate and environmental issues it is facing. It's not just the dirty air; it's the dirty water. In the northern provinces, most of the water isn't suitable for agriculture or drinking, and 50% is too dirty for industrial use.

We've been discussing China's water problem. Pollution, too, has become so horrible that people are leaving China with their children. Sometimes, entire cities break down. You hardly have a clear day in Hong Kong any more, or in Shanghai. Agriculture is in disarray because the water table is falling, and agricultural commodities prices have corrected significantly

Then this was very interesting when you consider the round table was 2 weeks ago:

I recommend shorting the Turkish lira. I had an experience in Turkey that led me to believe that some families are above the law. When I see that in an emerging economy, it makes me careful about investing.

The Lira started the year at 2.18. It is now 2.34.

One idea that interested me was Abbey Cohen:  My energy-sector pick is HollyFrontier [HFC], an oil refiner. It closed Friday [Jan. 10] at $49.79. Holly is a U.S. company that benefits from its geography. It has 100% of its refining capacity in the middle of the U.S., and has substantial exposure to light crude. Our energy team expects there will be good spreads [price differences in crude oil] around the world that will benefit U.S. producers. 

That opinion has probably moved WNR up the list in my February tranche ideas.

Another interesting idea was Constellium (CSTM). This was by Meryl Witmer, who has been the best stock picker over time in this group.  They went public last summer and are creators of aluminum products. They were described as Alcoa without the mining component.  With Ford moving away from steel and towards aluminum in their trucks, demand could really begin to increase for the more energy efficient metal.  The company is not that expensive given growth opportunities.

But as I say, there were as many opinions as panelists.  There are those who believe in physical gold and gold miners, bonds, short emerging markets.  They continue to be snarky.

Cohen and Faber went at it as Faber belittled her for being pro Mexico.  Hmm, interesting.  I can not find it now in the online edition. I wonder if they edited it out.  He commented that her mentioning Mexico and being pro-Mexicio that he was now going to recommend shorting Mexico. She later mentioned she liked Nordstrom. And then she asked is he was going to recommend shorting that as well! I will look for it one last time...

Best And Worst Moves In 2013

I thought it would be fun to document some of my best and worst moves in 2013.  I made the list about 10 days ago, so some of the prices may have changed since then.

Best Moves

Stock	Comments
HIMX	8.94 to 14.12.  One of largest positions.  Two months. Made 50% or $46,000 with factor.
GTAT	3/4 bought 14,000 shares at 2.73.  Closed year at 8.72.  Never sold. Made $84,000 with factor.
NUS	2/1 bought in MFI Tranche 41.94.  Ended year 138.22. Up over 200% and gain of over $45,000 with factor.
IPO Post Purchases	Bought VJET, SCAI and ATHM post IPO.  Total gain > 21,000 (with factor).
GNW	added to an already large position of GNW in January and April at average cost = 8.58.  Ended year at 15.53
BBEP	In early July bought BBEP post a sell-off due to LINE SEC investigation at $15.23. Locked in a 12.8% dividend and already up 37%.
AGX	In August bought AGX at 15.6 expecting a rebirth of US Construction spending. Already up 98%.
BHK	In April sold BHK at 14.69 (29% gain) in anticipation of interest rate raises. BHK has dropped to 13.19 since then
STRZA	Bought STRZA in February MFI tranche as a recent spin-off.  Up 84%.
RDA	Bought RDA, even though Chinese roots in May.  Up 85% and is being taken over.

Worst Moves

Stock	Comments
SLCA	Was smart enough to re-buy SLCA when they had a secondary offering in June at 20.29. But then sold 3 months later for a 14% gain. Then went up another 47% by end of year.
VJET and SCAI	Bought Post IPO, but sold very early (24.13 and 26.95).  Vjet shot to $70 and is now over $41 (cost me $17,000) and SCAI  is at $36 (cost me $27,000 with factor).
NUGT	Bought as a "fast trade".  Learned hard way the power of leverage. Went from $30.69 to $7.75 in 5 1/2 months and cost me $18k with factor (now under $3.50!).
SFXE and QEPM	I tried many times in 2013 to get "in" on IPOs.  Most times I was frustrated and got nothing.  The two times I got something (QEPM and SFXE) my share count was so pitiful, not worth cost of trade.
SD	Big believer in Sandridge and formed a big position in March and April (18,000 shares with factor). Bailed in June at $4.94 for a $7,000 loss. Closed year 20+% higher at $6.07.

Here is a listing of 50 stocks in MFI index for past week and for the year so far:

Index	Stock	Start	Last Week	Current	YTD Change	Week Change	Shares
1	ATVI	17.83	16.96	16.67	-6.5%	-1.7%	13.07
2	MO	38.39	37.03	37.30	-2.8%	0.7%	6.07
3	APOL	27.32	33.74	33.78	23.6%	0.1%	8.53
4	AAPL	561.02	540.67	546.07	-2.7%	1.0%	0.42
5	AGX	27.56	29.97	28.44	3.2%	-5.1%	8.46
6	BAH	19.15	18.81	18.06	-5.7%	-4.0%	12.17
7	BKE	52.56	46.24	45.35	-13.7%	-1.9%	4.44
8	CA	33.65	34.43	32.66	-2.9%	-5.1%	6.93
9	CACI	73.22	78.74	78.53	7.3%	-0.3%	3.18
10	CHE	76.62	78.58	77.81	1.6%	-1.0%	3.04
11	CRUS	20.43	19.83	19.67	-3.7%	-0.8%	11.41
12	CSCO	22.43	22.91	22.37	-0.3%	-2.4%	10.39
13	COH	56.13	52.56	48.81	-13.0%	-7.1%	4.15
14	CRTX	9.49	9.63	9.50	0.1%	-1.3%	24.56
15	DLX	52.19	51.72	49.33	-5.5%	-4.6%	4.47
16	DHX	7.25	7.39	7.30	0.7%	-1.2%	32.15
17	EBIX	14.71	13.77	13.45	-8.6%	-2.3%	15.85
18	EGL	33.40	39.69	38.61	15.6%	-2.7%	6.98
19	GME	49.26	37.65	36.52	-25.9%	-3.0%	4.73
20	GTIV	12.41	12.20	12.12	-2.3%	-0.7%	18.78
21	GNI	68.10	22.43	22.54	-66.9%	0.5%	3.42
22	HLF	78.70	70.20	60.06	-23.7%	-14.4%	2.96
23	IQNT	11.41	10.56	11.49	0.7%	8.8%	20.43
24	ESI	33.58	45.27	41.41	23.3%	-8.5%	6.94
25	LPS	37.38	37.30	37.30	-0.2%	0.0%	6.24
26	LQDT	22.66	21.58	23.13	2.1%	7.2%	10.29
27	LO	50.68	49.22	49.53	-2.3%	0.6%	4.60
28	MSFT	37.41	36.38	36.81	-1.6%	1.2%	6.23
29	MYGN	20.98	25.05	25.72	22.6%	2.7%	11.11
30	NATR	17.32	16.93	16.21	-6.4%	-4.3%	13.46
31	NOC	114.61	118.24	113.45	-1.0%	-4.1%	2.03
32	PDLI	8.44	8.97	9.03	7.0%	0.0%	27.62
33	PFMT	10.30	9.00	8.92	-13.4%	-0.9%	22.63
34	PETS	16.63	15.27	13.05	-21.5%	-14.5%	14.02
35	PRSC	25.72	25.04	24.66	-4.1%	-1.5%	9.06
36	QCOR	54.45	59.62	64.03	17.6%	7.4%	4.28
37	RTN	90.70	90.07	88.13	-2.8%	-2.2%	2.57
38	RAI	49.99	48.32	49.10	-1.8%	1.6%	4.66
39	RPXC	16.90	16.98	16.89	-0.1%	-0.5%	13.79
40	SAIC	33.07	37.17	37.89	14.6%	1.9%	7.05
41	SWHC	13.49	14.28	13.44	-0.4%	-5.9%	17.28
42	STRA	34.47	38.48	37.50	8.8%	-2.5%	6.76
43	RGR	73.09	80.34	73.85	1.0%	-8.1%	3.19
44	UIS	33.57	32.53	30.50	-9.1%	-6.2%	6.94
45	UNTD	13.76	13.24	12.55	-8.8%	-5.2%	16.94
46	USMO	14.28	14.66	14.29	0.1%	-2.5%	16.32
47	USNA	75.58	59.56	58.34	-22.8%	-2.0%	3.08
48	VCI	34.25	34.11	34.04	-0.6%	-0.2%	6.81
49	VGR	16.37	16.61	18.16	10.9%	9.3%	14.24
50	WTW	32.93	28.97	29.09	-11.7%	0.4%	7.08
	Total	17,682	17,515	17,215	-2.6%	-1.7%