Weekend Update: Starting To Feel Some Pain!

Starting To Hurt!

Tough, tough week.  I am at 25% cash, but wish I were 30%!  Everything seemed to fall off the table.  For the week, I was down 4.75%.  I am now just up 2.4% for the year.  The Russell 3000 was almost down 3%, so I clearly have the faster elevator.  Including last Thursday and Friday (when the turmoil began) I am down 8.3%.

While it is not fun, it is always best to try and not be emotional.  No one likes to see the value of their portfolio get smaller, but more importantly you need to ask yourself whether there is something intrinsically worse about you holdings. Just because Mr Market values your companies differently today than 10 days ago, are they really worth less?  If the answer is "yes"; then it may be time to sell those positions.  If the answer is no, then be patient.

Looking at my portfolio, I definitely own a couple positions that were probably more momentum plays than value plays (LMNS and TWOU).  I will likely hold LMNS through earnings, as I believe they have value that is not being recognized by the market. TWOU may have to go.

But the MFI holdings, my dividend holdings and the remainder of my discretionary holdings are all stocks I believe are undervalued.  So with them, I wait for the wave to pass.  An while an 8% drop feels bad, I try to keep in mind that

1. I am still up on the year, 
2. I have a ton of cash, 
3. I do not need the invested money for anything in near term, 
4. I do not use margin
5. I am reinvesting dividends at cheaper prices and
6. I will have a chance to find some bargains.

MFI Portfolio

What a beautiful Spring day in Connecticut.  The birds are chirping, the sun is pouring in the kitchen as I have my morning cup of coffee. It is already 55 and heading towards 70 degrees. Sweet. I even think some brave daffodils are starting to break through. It was a long winter.

I only keep monthly stats on my MFI portfolio (I could look at last weeks update, but am too lazy).  Since April 1st, it is down 4.8%.  Since then I have also lost a little bit of my lead on the R3K, about 3 points (30% to 27%).

During the week, CF was down 7%, ATVI was down 5.4%, KLAC was down 5.6%, SNDK was down 9%, AGX 6.8%, WNR 6.1% and SYNA 8.6%.

RPXC (1.6%) and GA (0.6%) were the only stocks up.

Here are tables of current 4 tranches:

5/6/2013	Start	Current	Dividend	Pct Gain	R3K Gain
KLIC	$11.40	$11.96	$0.00	4.9%	15.1%
CYOU	$29.24	$28.67	$0.00	-1.9%	15.1%
RDA	$9.74	$17.69	$0.10	82.7%	15.1%
NVDA	$13.85	$18.12	$0.32	33.1%	15.1%
CF	$183.97	$237.72	$2.80	30.7%	15.1%
Totals				29.9%	15.1%
8/15/2013	Start	Current	Dividend	Pct Gain	R3K Gain
CF	$187.26	$237.72	$2.00	28.0%	10.8%
FLR	$66.06	$74.47	$0.53	13.5%	10.8%
AGX	$15.60	$27.05	$0.75	78.2%	10.8%
KLIC	$11.29	$11.96	$0.00	5.9%	10.8%
RPXC	$15.92	$16.40	$0.00	3.0%	10.8%
Totals				25.7%	10.8%
11/15/13 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
AVG	$17.22	$19.15	$0.00	11.2%	1.8%
ATVI	$17.71	$19.04	$0.20	8.6%	1.8%
GA	$9.04	$11.62	$0.23	31.1%	1.8%
RPXC	$17.04	$16.40	$0.00	-3.8%	1.8%
SYNA	$48.01	$55.88	$0.00	16.4%	1.8%
Totals				12.7%	1.8%
2/1/14 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
ATVI	$17.13	$19.04	$0.20	12.3%	1.8%
KLAC	$61.47	$65.50	$0.45	7.3%	1.8%
RPXC	$16.22	$16.40	$0.00	1.1%	1.8%
SNDK	$69.55	$73.65	$0.00	5.9%	1.8%
WNR	$39.11	$36.66	$0.26	-5.6%	1.8%
Totals				4.2%	1.8%
Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	25.7%	12.7%	4.2%	29.9%	18.4%
Previous Tranche	14.1%	43.7%	78.3%	0.0%	31.1%
MFI Overall Gain	43.4%	62.0%	85.7%	29.9%	55.3%
Current Balance	35,854	40,508	46,436	32,479	155,277
R3K Current Tranche	10.8%	39.2%	1.8%	15.1%	16.7%
R3K Overall Gain	35.4%	39.2%	23.3%	15.1%	28.2%
R3K Balance	33,839	34,797	30,836	28,774	128,246
Annualized IRR	24.3%	40.9%	68.1%	32.3%	45.0%

Then in vein of full disclosure, here are all my open stocks and how they did last week (in descending order of value).  Note these exclude any dividends (I think BBEP, FSC and CSQ went x-dividend last week):

Index	Stock	4/4/2014	Current	Weekly Change	Share
1	GTAT	16.90	16.20	-4.1%	13.4%
2	GNW	17.82	16.00	-10.2%	7.3%
3	LMNS	10.72	9.35	-12.8%	6.2%
4	KLIC	12.24	11.96	-2.3%	5.3%
5	AOD	8.43	8.30	-1.5%	4.8%
6	BBEP	20.09	19.98	-0.5%	4.7%
7	RPXC	16.14	16.40	1.6%	3.8%
8	FGL	23.51	22.17	-5.7%	3.7%
9	PM	82.81	83.14	0.4%	3.4%
10	NTC	12.11	12.20	0.7%	3.3%
11	TPVG	15.90	15.58	-2.0%	3.2%
12	ATVI	20.12	19.04	-5.4%	3.2%
13	CSQ	11.22	10.86	-3.2%	3.0%
14	TGONF	10.25	10.40	1.5%	3.0%
15	FSC	9.59	9.35	-2.5%	2.6%
16	CF	255.62	237.72	-7.0%	2.2%
17	RIOM	2.03	1.96	-3.4%	2.0%
18	BAC-WTA	8.00	7.60	-5.0%	1.9%
19	TWOU	13.02	12.94	-0.6%	1.8%
20	KLAC	69.40	65.50	-5.6%	1.8%
21	SNDK	80.95	73.65	-9.0%	1.7%
22	HIG-WT	26.84	24.73	-7.9%	1.7%
23	GA	11.55	11.62	0.6%	1.7%
24	AGX	29.02	27.05	-6.8%	1.6%
25	WNR	39.05	36.66	-6.1%	1.5%
26	RDA	17.74	17.69	-0.3%	1.5%
27	SYNA	61.16	55.88	-8.6%	1.4%
28	AVG	19.90	19.15	-3.8%	1.4%
29	GSOL	8.57	8.29	-3.3%	1.4%
30	NVDA	18.15	18.12	-0.2%	1.1%
31	FLR	77.66	74.47	-4.1%	1.1%
32	OIBAX	6.10	6.13	0.0%	1.0%
33	O	40.74	41.43	1.7%	1.0%
34	CYOU	29.06	28.67	-1.3%	0.8%
35	SPY	186.40	181.51	-2.6%	0.6%

Some interesting movements.  GNW and FGL are both starting to look very cheap. HIG-WT is another one I am keeping eye upon.

Discretionary Portfolio

Well, I have already touched up the fiasco of LMNS and TWOU.  GNW dropped a ton as well.  The life insurance names, FGL, GNW, HIG and MET (in kids college funds) all nose dived as the treasury rates dropped a lot during the week.  As life insurers get much of their income by investing premiums in fixed income, that income going forward is dimished when rates drop. That seems short sighted to me, as it stll seems over next 18 months, rates will start to move towards more normalized levels.  So if you have a longer term horizon than a week or a month, some of these names are definitely on sale.

Also interesting, I saw where Cramer now has called GTAT his best pick under $50 (Cramer's Mad Money - The Best Stock Between $10 and $50).  I am not sure if that is bearish or bullish, but it probably means he will start mentioning it a lot of his show.

Stock	Shares	Avg Cost	Current Price	Pct Change	R3K Change	Diff
BAC-WTA	6,000	5.35	7.60	42.1%	15.2%	26.9%
GNW	11,000	9.16	16.00	74.7%	21.0%	53.8%
GSOL	4,000	8.58	8.29	-3.3%	-3.2%	-0.2%
GTAT	20,000	7.06	16.20	129.3%	4.1%	125.2%
HIG-WT	1,650	21.24	24.73	16.4%	10.7%	5.7%
KLIC	7,000	11.48	11.96	4.2%	6.5%	-2.3%
LMNS	16,000	12.71	9.35	-26.5%	-3.6%	-22.8%
RIOM	25,000	2.25	1.96	-13.0%	-2.6%	-10.4%
SPY	79	185.98	181.51	-2.4%	-1.7%	-0.7%
TWOU	3,399	13.74	12.94	-5.8%	-4.0%	-1.8%
Total Open				28.9%	3.9%	25.0%
Closed				2.9%	1.7%	1.2%
Combined				8.7%	2.2%	6.5%

Dividend Portfolio

Well, when times get tough, the dividend portfolio starts to do better.  No sexy, low income stocks here.  Just stocks that make money and pay dividends.  These guys gave up less than 1% during the week.  Woo-hoo!  Of course, I did have some sellers regret about selling TC-PT a few weeks ago at $13.  TC had strong production and has vaulted to $16.16.  That would have really helped!

Stock	Shares	Avg Cost	Current Price	Dividends Received	Pct Change	R3K Change	Diff
AOD	13,890	8.02	8.30	7,746.20	10.4%	12.6%	-2.2%
BBEP	5,713	16.74	19.98	6,840.21	26.5%	6.3%	20.2%
CSQ	6,804	8.63	10.86	11,941.30	46.1%	45.6%	0.5%
FGL	3,000	20.06	22.17	195.00	10.9%	-1.7%	12.6%
FSC	6,704	9.65	9.35	1,112.06	-1.4%	-2.2%	0.8%
NTC	6,660	12.01	12.20	755.71	2.6%	-1.9%	4.4%
O	590	20.64	41.43	9,024.78	174.8%	103.1%	71.6%
OIBAX	4,125	5.00	6.13	8,001.62	61.5%	109.5%	-48.0%
PM	1,000	78.60	83.14	940.00	7.0%	-2.5%	9.4%
TGONF	7,000	10.27	10.40	2,367.50	4.5%	10.6%	-6.1%
TPVG	5,000	15.55	15.58	-	0.2%	-4.2%	4.4%
Total Open				48,924	16.1%	12.1%	4.0%
Closed					12.5%	11.2%	1.4%
Combined					13.1%	11.3%	1.8%
Annualized IRR Since 12/31/10					17.6%
2014 Gain					0.8%

I note that this portfolio is also in the black for 2014.  So certainly not a disaster.  Well, I am going to call it a wrap.  It is now a full-fledged beautiful day out there and I am going to take my first bike ride of the season with my daughter!