Portfolio A – Buys/Sells

The 16 month return was 34.86%, and at this point I decided to take profits in a few areas and reallocate funds. Trades are all considered to have been carried out based on the open price of today’s market:
———SOLD———
AAPL – 200 shares – $85.38 = $17,076 — PRLAX – 300 shares – $37.99 = $11,397
SSEMX – 350 shares – $23.17 = $8,109.50 — FKUTX – 700 shares – $13.52 = $9,464
Total: $46,046.50
——-BOUGHT——
BUD- 200 shares – $50.93 = $10,186.00 — NTES – 750 shares – $20.5 = $15,375.00
CAT – 175 shares – $61.29 = $9,193.50 — PRU – 100 shares – 88 = $8,800.00
Total: $43,554.50 ($2,492.00 remains unused)

The updated (fantasy) portfolio now looks like this:
Stocks
1. PRU-Prudential – 225 shares – $74.783 ($88.21) $19,826.25
2. MO-Altria – 125 shares – $69.48 – ($88.22) $11,027.50
3. NTES – Netease – 750 shares – $20.50 – ($20.40) $15,375.00
4. CAT – Caterpillar – 150 shares – $61.29 – ($61.70) $9193.50
5. BUD – Anheuser-Busch – 200 shares – $50.93 – ($50.76) $10,186.00
Funds
6. FKINX-Franklin Income A-3750 shares – $2.50 – ($2.67) $10,012.50
7. FWRLX-Fidelity Select Wireless-500 – $6.55 – ($7.16) $3,580.00
8. FHKCX-Fidelity China Region-400 – $18.43 – ($22.77) $9,108.00
9. PRASX-T.Rowe Price N. Asia-500 – $11.49 – ($14.27) $7,135.00
$2,492.00 Available – Net Asset Value = $97, 935.75
*NOTE: This is a mock portfolio, a “fantasy” portfolio if you will…

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12 Responses to Portfolio A – Buys/Sells

  1. S. R. says:

    So you’re up 27,000 bucks?

  2. Yea – so far it’s a gain of around $28K including yesterdays gains. This adjustment in the portfolio shouldn’t be the only one this year, but I want to wait out another month with a couple of picks made originally. A lot of the stocks I like (GS, SUNW, PBR) are trading at their highs right now, and without concrete evidence, I have a difficult time pulling the trigger when that’s the case.

  3. bernie kosar says:

    Yeah that Apple has been a dynamite stock!

  4. The next move is to sell off the treasury fund and altria, but I’m not 100% decided on what to do with that money just yet. Apple was huge last year, and might be this year as well, but at the peak of a run like that is where I like to pull out and reallocate in most situations. Prudential being the exception. I want to get some of the portfolio into India, banking and technology – – – what I’m hoping to have time for in the next week is to research what companies are investing the most into building hotels in India’s cities, as those already up are making money hand over fist already…it may be the most difficult place to find a room in the world at this moment.

  5. bernie kosar says:

    I am thinking about india as well, and the world’s largest middle class. Though, the laws and traditions as well as the vast poverty scare away many investors who opt for China. I guess as long as the BJP isn’t in power then maybe it’s a worth while bet. Any thoughts on China?

  6. bernie – sorry about not responding to this before now…my thought on China in terms of investing in individual stocks is to keep up with the news regarding government regulation, contracts, etc. Many times you’ll have three or more companies in the same sector, all vying for some sort of preferred status that can be provided by the government, and when the month before the decision comes, you’ll have odds on who’s going to win. The telecom sector in China had a situation like this in 2006, and the winner (I was knee deep in research on this through 2005 till the early part of 2006 but not since) saw their shares double in short time. It wasn’t difficult to predict the future in that instance, and it won’t be in others either. The IPO for China’s national bank for instance…it was a no-brainer in the way that Mastercard’s IPO was a no-brainer…anyone who had capital to invest and did so ended up feeling awfully good last year in regards to China.

    As for India, I’m mostly focusing on US multinationals opening up operations there, as well as the hotel chains that are building in the big markets. Rooms are scarce and way overpriced, so whoever is building with operations to go online from 2007-2011 or beyond, it’s a good investment. Also, the hotels currently operating already…they’re banking upwards to $600 for a single room per night, all stacked with business folks traveling for one reason or another.

    There are a few individual stocks (NTES in China is one I’ve always liked and put money from the fantasy portfolio into) I like, but it really requires a lot of time getting to know the market and the sector…a lot of reading. Once you stop, the chances of understanding it are slim to none.

    Besides that…if you hear that Berkshire Hathaway has purchased a stake in any company within China or India, it’d be wise to follow. When Buffett bought PetroChina stock 4-5 years ago, I didn’t have a penny to my name, but if I had, that penny would be worth at least half a nickle today.

  7. bernie kosar says:

    Thanx for the info!

  8. bernie – Another thing to keep in mind is the Chinese state owned firms like PetroChina are set up to yield incredible dividends, and individual investors cash in on this as well as the capital gains. This is the way it’s done so that the Chinese government can get a continuous return on their investment and a source of government funding that can be counted on consistently. With this in mind, a considerable stake in one of these companies, even if the value rises under 10% in a year, the dividend that is either banked or reinvested should be added to that number as well.

  9. John says:

    hey Al, wanted to Thank you, been trying to start saving and investing at 35, been overwhelmed by amount of fluff out there…just read this post after a draining day, and was pleased to see some educated, unbiased (relatively) opinions.
    can you please post/email your opinions on specific India stocks as they evolve?

    THANK YOU, LOVE YOUR THOUGHTS..

  10. I’ve been thinking about this for a couple days so far John, but haven’t had time yet to get my hands dirty w/ some research. I’ve looked at my old documentation on stocks I was interested in a few years back. The one angle I was 90% sure of and still think is solid today is matching up companies developing hotels in the big cities, checking those ticker symbols on a number of boards, check the balance sheets and any projections they’ve put out…if the company is of the size where one of those hotels coming on line is going to lead to a healthy percentage jump in revenue, it’s a no brainer as I see it.

    Thing to keep in mind about India and China is safety in investing comes in speculative analysis on what you KNOW will be needed 5 years down the line. China is building roads and connecting houses with telephone wires faster than any country on earth, and India is attracting so much foreign interest with companies seeking labor, that if you can zero in on what there’s not enough of today, you can also identify what companies are poised to provide what is needed. In terms of hotel space in India, even after the new hotels open, the same problem will exist.

    I think that for investors such as ourselves with money to invest that cannot be lost, going overseas can be scary. The only way to do it right is to have a strategy with information you have in hand, so that when the situation changes at all, you understand where you’re at.

    I’ll try to research the hotel idea and post a breakdown of what the data shows and how I came to my decision. Sell off that China fund and put the money into the one or two picks I come up with, and see how it works out.

    I think it’s all about having a methodology and based on experience, fine tuning it along the way. We’ve got to pick stocks though…that’s how I feel about it, because these mutual funds are raking in their percentage regardless, and added up over 30+ years of investing, along with the capital gains taxes we pay…being able to instead pay a $10 commission to etrade is ideal in the long run.

  11. Also, with the foreign markets, filtering out news pertaining to trade is a great way to find winners, as a story about something like (hypothetical) China intending to purchase less steel from Australia and more from S. America can be taken to the drawing board and a couple of companies (like GGB in Brazil) have chatter linked to that information. There will be a bump in the price based on the news, but the real gains will coincide with the increased revenue realized in the quarterly statements.

    If you get in following the trade agreement and hold it for a couple of years…

    All in the game –

  12. John says:

    Thank you..look forward to your thoughts.

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