2016-08-06
Friday’s US Jobs Report turned the broad market from loser to small winner this week. The benchmark S&P 500 index gained +0.43% W/W, which is now up +8.1% YTD.
This was a busy week for me after starting anew with my portfolio management responsibilities.
In the market, I have been very active in my return to trading and my largest positions in the main portfolio, all of which I acquired this week, are:
1. General Motors [NYSE:GM], which on Friday lifted +1.52% but was down -2.35% W/W. No matter, as I bought the stock on Monday after the huge downdraft in Autos following disappointments in earnings reports from Ford and Toyota. I bought more on Thursday.
2. BJ’s Restaurant [NASD:BJRI], which is a California-based restaurant company whose stock had cratered on July 26 after missing on Street 2Q forecasts. Like all traders should, I ignored the market chatter and read the company report. Nothing there at all concerned me. I bought on market weakness on Tuesday and again on market weakness on Thursday. The price on Friday popped +3.42%, which helped the stock to a W/W gain of 4.40%.
Here is my 4T report on BJ’s Restaurants.
3. TE Connectivity Ltd [NYSE:TEL], a Swiss company that manufactures connectivity and sensors solutions for the Auto industry, which like GM was down -2.16% W/W as well, but up +1.46% on Friday. Again, no matter as I bought my positions after the big decline on Tuesday and I bought more on Thursday before the pop on Friday.
Here is my 4T report on TE Connectivity.
4. The last of the four new positions that make up the core of my All Cap US Listed Companies Portfolio is Bank of Ozarks [NASD:OZRK], which on Friday announced record second quarter earnings and was named this week by Bank Director magazine as the top performing US bank in its asset size category for the 4th consecutive year. For the 6th consecutive year, at least one national organization has named it the Best Performer. Assets are now $18 billion.
Friday’s pop in the US Dollar lifted most bank stocks, but OZRK jumped +3.56% on the day. On the week, OZRK was up +1.92%. I bought my positions on Monday and Thursday.
Here is my 4T report on Bank of Ozarks.
Overall, these new positions, averaging three days invested, were up an average +1.63%, which clearly beat the benchmark S&P 500 index ($SPX) performance of +0.43% W/W.
Every week that happens is a good week!
Moreover, I was more than pleased with my Goldminer Portfolios as at mid-day Thursday I sold the entire positions in nine stocks and one-half positions in two others and on Friday, the strong US Dollar knocked down the benchmark GDX by -3.20%, sending the GDX to a W/W loss of -1.18%.
The only other position I have in my main portfolio is a very small one in AuRico Metals [PINK:ARCTF]. I also own some of this stock plus its Canadian counterpart [TSE:AMI] in my Goldminer portfolios.
AuRico Metals is a tiny goldminer royalty and mine developer company that the market thinks has a good chance of being bought out by a gold royalty company. A writer in Seeking Alpha discusses the company in some detail.
I like the quality of AuRico’s assets, their management and the company’s valuation. To me this penny stock is not a wild and crazy speculation, but is an astute investment, which is the point I’m trying to make for the entire portfolio. ETFs be damned; investors need to know what they are investing in.
AuRico Metals is not a big holding, but it has relatively much better prospects than the (excellent) precious metal companies that had been in the portfolio I took over. Besides, according to the mining analyst of one of Canada’s big banks, the stock has a near-term price upside of about 50%, and very little downside. I have no problem with that conclusion. My cost for ARCTF is 0.8006 and the last price for the week was 0.7920, a minuscule difference.
This All Cap US Listed Company stock portfolio is still 28% in cash because I need time to rebalance it away from the ETFs, which are now history, and into six to eight holdings of Cara 100 company stocks plus a small amount of precious metal-related company stocks.
It’s a good thing to be in a position of doing what you want to do, and more importantly what you need to do.
I’m back!
As soon as I get organized, I will be publishing daily consolidated performance results for each portfolio I manage. I’ll do that in the Cara Portfolio Management website and here in the Blog. The latter is important because there is a lot of talk in this business, but the only relevant part of it is the demonstrated ability to walk the talk.
Another matter caught my attention this week.
Although I studied the law as a part of my formal education, I have never been one to understand it. I still find much of it astounding. Take the case of the former brokerage firm known as MF Global, which was, as we all know, driven into bankruptcy by the chairman and former head of Goldman Sachs Jon Corzine’s stupid decisions.
I wonder how long it will take for the powers that be to edit this wiki description of MF Global to their liking. Unfortunately, re-inventing history seems to be a favorite pastime in America.
However, ignoring the stunning screwing over of the account holders, the hiding of the truth and the outright lies of many of the perpetrators, and the escape from prosecution by politically powerful Corzine, we are now led to believe that the company’s auditors were largely to blame for the whole mess.
Quoting from the media: “In a 69-page decision made public on Friday, U.S. District Judge Victor Marrero in Manhattan said there remained open questions concerning whether PwC’s alleged bad accounting advice was a substantial cause of MF Global’s rapid demise.”
Is it any wonder that so many people look at capital markets as some kind of joke? Moreover, is this not another reason why investors now have a short-term trading mentality because longer term pretty much the unbelievable can happen and then we are told it’s normal, and based on the law?
At the heart of the matter, America is being taken down because its values are being destroyed. There is too little of substance to the ground we stand on, and even that is constantly eroding.
/Bill
