Weekend Update - August 23rd, 2014

Weekend Update

Muggy late summer morning here in New England today.  This week continued one of the best months I think I have ever had in investing (I could go back and look as I have records back to 2002, but am too lazy).  I am up 10.25% in August.  I look at that and wonder if I have made a mistake somehow.

Double Check

I looked stock by stock and it seems good. 10.25% (with my multiplier) is a gain of $215,000.

Index	Stock	7/31/2014	Current	Monthly Change	$ Gain
1	GTAT	13.84	18.15	31.1%	60,340
2	GNW	13.10	13.88	6.0%	10,826
3	BBEP	21.16	22.05	4.2%	5,085
4	AOD	8.68	8.82	1.6%	1,999
5	TLM	10.45	10.76	3.0%	2,945
6	KLIC	13.62	14.45	6.1%	5,810
7	RIOM	2.32	2.71	16.8%	13,650
8	ATVI	22.38	23.13	3.4%	3,017
9	GPS	40.11	45.43	13.3%	10,640
10	BAC-WTA	6.54	7.13	9.0%	7,079
11	NTC	12.42	12.53	0.9%	746
12	CSQ	11.60	12.05	3.9%	3,173
13	FSC	9.67	9.71	0.4%	339
14	TPVG	15.23	15.55	2.1%	1,641
15	TGONF	10.50	11.25	7.1%	5,250
16	TNH	145.00	151.74	4.6%	3,370
17	CSCO	25.23	24.65	-2.3%	(1,713)
18	TCMCF	14.00	14.05	0.4%	245
19	NADL	9.75	10.26	5.2%	3,247
20	RPXC	15.60	15.24	-2.3%	(1,529)
21	AVG	17.00	18.40	8.2%	4,578
22	AGX	33.90	38.34	13.1%	6,572
23	SNDK	91.71	98.00	6.9%	3,579
24	TSL	11.21	13.00	16.0%	7,160
25	SYNA	72.23	80.17	11.0%	4,939
26	KLAC	71.49	74.98	4.9%	2,275
27	TIME	24.10	23.92	-0.7%	(360)
28	WNR	40.96	46.76	14.2%	5,861
29	HIG-WT	25.75	27.82	8.0%	3,419
30	CBI	58.32	63.13	8.2%	3,295
31	BRCD	9.33	9.74	4.4%	1,756
32	ITRN	21.47	21.84	1.7%	695
33	NSR	27.86	29.36	5.4%	1,740
34	CA	28.88	28.24	-2.2%	(648)
35	O	43.05	45.09	4.7%	1,230
36	RCII	23.94	26.26	9.7%	2,415
37	OIBAX	6.14	6.13	-0.2%	(42)
38	EDV	106.29	110.81	4.3%	629
39	Overall			10.3%	185,253

So stock by stock I get $185,000. I know this isn't really right as I am using my current holdings. So GTAT would be almost $20,000 as it doesn't reflect shares I sold this week. It also excludes dividends and stocks that I may have bought and sold during the month. But in overall magnitude, this seems to support the $215,000 monthly figure. Whoa.

MFI Portfolio

Just like everything, this has exploded in August.  If you assume my initial investment in MFI was 4 tranches of $25,000 - implying 100,000 total, I was at $167,000 on August 1st and am now at $176,000. Actually, when I look at that, they look like slackers, just up 5.3% for the month (R3K is up a solid 3.3% for the month).  

For the week, CBI was up 8.4%, BRCD and AGX were both up about 4.3%. Even long time slacker RCII was up 5.9%.

11/15/13 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
AVG	$17.22	$18.40	$0.00	6.9%	11.7%
ATVI	$17.71	$23.13	$0.20	31.7%	11.7%
GA	$9.04	$11.90	$0.23	34.2%	11.7%
RPXC	$17.04	$15.24	$0.00	-10.6%	11.7%
SYNA	$48.01	$80.17	$0.00	67.0%	11.7%
Totals				25.8%	11.7%
2/1/14 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
ATVI	$17.13	$23.13	$0.20	36.2%	11.7%
KLAC	$61.47	$74.98	$1.40	24.3%	11.7%
RPXC	$16.22	$15.24	$0.00	-6.0%	11.7%
SNDK	$69.55	$98.00	$0.53	41.7%	11.7%
WNR	$39.11	$46.76	$0.78	21.6%	11.7%
Totals				23.5%	11.7%
5/6/2014	Start	Current	Dividend	Pct Gain	R3K Gain
AVG	$19.57	$18.40	$0.00	-6.0%	6.3%
CA	$29.54	$28.24	$0.50	-2.7%	6.3%
CSCO	$22.79	$24.65	$0.19	9.0%	6.3%
NSR	$25.82	$29.36	$0.00	13.7%	6.3%
RCII	$28.78	$26.26	$0.23	-8.0%	6.3%
Totals				1.2%	6.3%
8/15/2014	Start	Current	Dividend	Pct Gain	R3K Gain
CSCO	$24.40	$24.65	$0.00	1.0%	1.7%
AGX	$36.71	$38.34	$0.00	4.4%	1.7%
ITRN	$21.32	$21.84	$0.00	2.4%	1.7%
BRCD	$9.34	$9.74	$0.00	4.3%	1.7%
CBI	$58.25	$63.13	$0.00	8.4%	1.7%
Totals				4.1%	1.7%
Category/Tranche	August	November	February	May	Total
Initial Investment	25,000	25,000	25,000	25,000	100,000
Current Tranche	4.1%	25.8%	23.5%	1.2%	13.4%
Previous Tranche	41.4%	43.7%	78.3%	33.0%	55.2%
Tranche -2	14.1%	-	-	-	3.5%
MFI Overall Gain	68.0%	80.9%	120.2%	34.6%	75.9%
Current Balance	41,989	45,224	55,046	33,659	175,918
R3K Current Tranche	19.4%	52.6%	11.7%	6.3%	22.5%
R3K Overall Gain	45.9%	52.6%	35.3%	26.4%	40.7%
R3K Balance	37,104	38,156	33,827	31,588	140,674
Annualized IRR	29.2%	39.8%	66.0%	25.7%	41.4%

(geek footnote - I did catch an error in R3K balance for the May tranche this week, so it went up by 6%).

You can see the newest tranche is off to a great 4.1% start.  Even my May tranche, which has been trailing pretty much since day 1 has moved back in the black and closed a little ground.

Discretionary Portfolio

This portfolio has really exploded.  The GTAT move has really helped, and everything else is clicking (or should I say KLICking?) as well - my warrants, TSL, RIOM, GNW.  I did make a change to the way I am considering the money I get for selling calls.  Before I had deducted the call premium from my purchase price.  So with TSL I had a $12.58 purchase price and then turned around and sold calls for $1.45.  I lowered my purchase price to $11.13 (12.58-1.45). While this is a common approach, I think it can be a bit deceiving on percentage gains, especially if you are able to do it on the same security multiple times. Theoretically, your purchase price could go below zero. So I am treating it as a dividend. Dollar wise you get to the same place, but by treating as a dividend, I am essentially adding it to the current price as opposed to subtracting from purchase price.

Stock	Shares	Avg Cost	Current Price	Pct Change	R3K Change	Diff
AGX	190	36.71	38.34	4.4%	1.7%	2.7%
BAC-WTA	12,000	6.05	7.13	17.8%	13.3%	4.5%
GNW	13,880	10.08	13.88	37.8%	23.6%	14.1%
GTAT	18,000	10.80	18.46	70.9%	7.8%	63.1%
HIG-WT	1,650	21.24	27.82	31.0%	21.0%	10.0%
KLIC	7,000	11.48	14.45	25.9%	16.4%	9.6%
RIOM	25,000	2.01	2.71	34.5%	6.4%	28.1%
TLM	9,500	10.72	10.76	0.4%	1.1%	-0.7%
TSL	4,000	12.58	14.76	17.4%	1.2%	16.2%
Total Open				35.8%	11.4%	24.4%
Closed				2.3%	1.2%	1.2%
Combined				6.8%	2.5%	4.3%

So as I mentioned, the GTAT price is actually increased by the call premium I received as is TSL.  TSL is still wrong (it needs to be capped at 14.45 as the strike price is $13, but I'll fix that next week). So of my discretionary picks, TLM is right now the only one really trailing the R3K.  And they had some interesting option activity yesterday - that caused me to actually buy some call options on them which I will mention below.

Dividend Stocks

Wow, things are actually worked well here as well.  GPS had a great pop yesterday. TGONF has actually been moving up very nicely recently (recall I have discussed their gap between stock price and NAV). I bought TCMCF this week, which I believe will be a solid contributor as they have been mis-priced.

Then NADL inked a big deal, which in part caused their stock price to go up.  You know, overall one thing helping the portfolio is the fact that treasury yields keep dropping.  That makes dividend stocks more valuable, as many of my stocks kind of act like bonds.

Stock	Shares	Avg Cost	Current Price	Dividends Received	Pct Change	R3K Change	Diff
AOD	14,186	8.03	8.82	11,717.83	20.1%	22.6%	-2.5%
BBEP	5,713	16.74	22.05	10,650.92	42.9%	16.2%	26.7%
CSQ	7,001	8.72	12.05	14,277.43	61.7%	57.1%	4.6%
FSC	8,395	9.57	9.71	3,767.52	6.2%	6.4%	-0.2%
GPS	2,000	40.55	45.43	440.00	12.6%	5.4%	7.2%
NADL	6,366	9.60	10.26	1,200.00	8.8%	3.8%	5.0%
NTC	6,784	12.02	12.53	2,671.53	7.6%	7.1%	0.4%
O	600	21.02	45.09	9,460.47	189.5%	117.9%	71.6%
OIBAX	4,147	5.00	6.13	8,261.12	62.4%	128.2%	-65.8%
TCMCF	4,903	13.89	14.05	-	1.2%	0.1%	1.1%
TGONF	7,000	10.27	11.25	3,452.50	14.3%	20.9%	-6.5%
TIME	2,000	22.89	23.92	-	4.5%	1.5%	3.0%
TNH	500	148.10	151.74	1,555.00	4.6%	3.7%	0.8%
TPVG	5,128	15.54	15.55	1,958.70	2.5%	4.6%	-2.1%
Total Open				69,413	19.4%	16.6%	2.8%
Closed					12.0%	10.9%	1.1%
Combined					13.3%	11.9%	1.4%
Annualized IRR Since 12/31/10					18.2%
2014 Gain					9.3%

Options

As I mentioned, I did get the ability this week to trade options in my fidelity account. And while I do not mean to go crazy, and I will be using relatively small dollar amounts, I did buy two call options this week (GNW and TLM).  Then I have had for some time call options I sold on GTAT (though I bought hem back) and TSL.  I want to keep good records on the options as they can be "weapons of mass destruction" to a portfolio.  If they are not working for me, I will pull back. My longer term plan is to use call options should the market really crash - though make sure they are longer duration.  Then I may sell some call options if I have a stock that I think doesn't have that much upside (though if I have a stock like that, I am more inclined to sell it).

Open Date	Ticker	Type	Shares	Open Price	Current Price	Strike	Expiration	Gain
3/28/14	GTAT	Sell	3,000	2.40	0.55	22.00	9/20/14	5,550
6/18/14	TSL	Sell	4,000	1.45	-	13.00	9/20/14	5,800
8/21/14	GNW	Buy	10,000	1.24	1.24	17.00	1/15/16	-
8/22/14	TLM	Buy	10,000	0.55	0.70	11.00	10/18/14	1,500
	Total							12,850

So as I mentioned, the options I sell, I will track as if the amount I get as dividends and they will also be in my normal portfolios (like discretionary). But if I buy a call options, it will only show up here.

Invest by Portfolio

I have mentioned many times here that I do believe cash in your investment portfolio is essential. I try to keep between 15 and 30% of my total investments in cash. I do not want to use margin and I want to have cash in event an extraordinary opportunity comes around.  Here is where I currently stand:

Portfolio	Proportion
Dividend	27.1%
Mfi	20.3%
Discretionary	25.1%
Cash	27.5%

I was surprised to see MFI so low, so I will work in the next year to bring that up. Conceptually it seems to me that my main three portfolios should all be relatively the same size. Though I need to think about that and may be something that changes as I age (in retirement perhaps a greater proportion in dividend/income securities).

With the buying of TCMCF, my income is definitely going up, here is projected annual income from dividend portfolio (with my multiple):

Stock	Shares	Ann Dividend / Share	Yield	Projected Dividend	Worth
AOD	14,186	0.68	7.7%	9,618	125,124
BBEP	5,713	2.01	9.1%	11,484	125,976
CSQ	7,001	1.00	8.3%	7,001	84,367
FSC	8,395	1.10	11.3%	9,235	81,517
GPS	2,000	0.88	1.9%	1,760	90,860
NADL	6,366	0.96	9.4%	6,111	65,316
NTC	6,784	0.68	5.5%	4,640	85,003
O	600	2.17	4.8%	1,303	27,074
OIBAX	4,147	0.29	4.7%	1,203	25,420
TCMCF	4,903	1.60	11.4%	7,845	68,887
TGONF	7,000	0.62	5.5%	4,340	78,750
TIME	2,000	0.80	3.3%	1,600	47,840
TNH	500	12.04	7.9%	6,020	75,870
TPVG	5,128	1.20	7.7%	6,154	79,742
Total			7.4%	78,314	1,061,746

Ok, I think that is a wrap.  Have a great weekend everyone.