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Monday, May 5, 2008

Post-Vacation Review . . .

Challenge Accounts:

Investing Account Balance:
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Personal Trading Thoughts: Unfortunately, my computer blew up just before I left. The CPU overheated and not only melted the chip, but also welded the powersupply bundle to the motherboard. I have a replacement CPU, but this computer only stays on for about 20 minutes at a time. I have a replacement motherboard and gear ordered, but it won't arrive until Tuesday and Wednesday. So I can't trade, with an unreliable PC.

Personal Investing Thoughts: We are fast approaching the end of May. Which means investors generally "walk away" for the summer months. I have my eye on DTE for possibly more accumulation until then. But come June? I'm out of investing in the markets, based on seasonal tendencies.

I should mention however, that this year? Unlike most years? I will not be turning off my DRIP's during the summer months. Usually, I turn off my DRIP's when the market peaks, and I let myself enjoy straight cash dividends from the stocks I own. The market usually peaks in June. So I 'usually' turn off my DRIP so I don't accumulate more shares at higher prices, and this keeps my cost-basis low across the board. But the market has undergone a correction lately, and I want to leave my DRIP on this year, and accumulate more shares at cheaper prices. Although it's wise to have a set strategy? You have to be able to adapt to current conditions. And right now? For long term portfolios? The market is offering many good stocks for great prices. So I'll let the DRIP's do their thing this summer, and forgo receiving cash.

I've had a little more time to sit and go over some news, and digest some things.

First of all, my investment portfolio's (Non-Challenge Project Accounts) have had a fantastic run here. Here are some highlights.

Covestor Results: Covestor tracks just one of my investment portfolios. They can only do one account at a time unfortunately. And it's only been tracking that account since November. Through what has been a very poor time in the markets for buy and hold investment portfolios such as this one. However, I've managed to beat not only every mutual fund (including the bond funds lately) that Covestor tracks, but the market indexes around the world as well. In addition, although I have bought and held in my portfolio, I'm now in the positive, and past risk free.

At least for today. That's the trick with buy and holds. You don't take your profits. You look to the balance between the asset valuation and the dividend DRIP accumulations for gains from the market multiples. Tomorrow is always a new day.

Ford (F) has risen from the low $5.00's in mid March, to nearly $8.50 recently. I'm holding Ford from the $6.50's and $6.85 region. Ford is one of those stocks I own on a fluke. They cut out paying dividends, and probably won't be paying dividends for some time. However, I hold to some tenants of accumulation theory, and this doesn't mean I have to sell my Ford stock. I just hold onto it. I don't think Ford is 'going anywhere' in that it isn't going away anytime soon, and I am very comfortable with my cost-basis. So I just hold onto it. Since it represents less than 3% of my investment portfolio (according to money management principles); this is sort of a 'gimme' stock.

Frontline Ltd. (FRO). Any excuse to talk about the good things from FRO. As long time readers know, I love this stock. It's treated me so well over the years. A stock like FRO doesn't appear often. Absolutely huge divvy's, and special dividends that the company can sustain for the medium term. But when they come along? And if you're fortunate enough not to be wrong about the management team? They're a thing of beauty. FRO was a stock that I bought, that I consider 1/2 skill, half pure luck. I sometimes call it my 'most speculative investment play'. But it's a play that's paid off in spades. But investing isn't just about the dividends. It's also about the stock price. I can easily see FRO hitting $62.00 +. Of course, this means that my DRIP purchases won't accumulate as many shares. That's the downside of DRIP. Well . . . I guess it's a downside. Because the value of the paper has risen so dramatically, although I won't gain as many shares on the next DRIP? The value of the asset itself more than makes up for this negative.

Anheuser-Busch Companies, Inc. (BUD) Now this is a stock I love to mention. Why? It perfectly illustrates my investment style. I bought BUD around $53, and then more at $48. And the entire time I put my money where my mouth was, and announced my purchases into BUD? I had naysayers. One guy was so foolish as to try to predict tops and bottoms (something investors do not do) and stated that BUD would "soon see $37" region. I'll tell you what, on an income stock like BUD? If it hits $37.00 I'm going to be backing up the dump-truck to buy as much as humanly possible. But then again, in my own personal opinion - he was an absolute nutcase, and believes that all stock market prices are manipulated by guys with nintendo like joysticks (I kid you not. This business attracts all kinds). On top of everything else, we'll soon have another dividend paid out, that will only accumulate more shares (basically for free), of this fantastic stock, as I did in February, which also helped lower my cost basis.

DTE Energy (DTE) Wow. This is what I like to see. I made my first small introductory buy with DTE in all my investment portfolios. And it just almost immediately rewards this purchase by taking off, and we then receive the news that first quarter profit surpases estimates, as I thought it would. On the chart, we know have some wonderful consolidation, and a dividend will be paid out in the next month or so; which will accumulate yet more shares. I'm seriously thinking of buying more if this consolidation continues, and we approach the $43.00 region. But we'll have to see how the future shapes up.

That's just a few of the stocks that have done well. SFL shows serious strength as well. The worst performing stocks I have, are still consolidating well, which will help out come dividend payout time with the DRIPs.

* * *

Investing Account Balance: $247.27
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $27.15

Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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