I Eat Bear

Ordinarily, I am an optimist, and a bull. I have found that to be increasingly difficult lately. It could be just a cycle, and it will pass, or it could be a growing trend, that too many people believe in.

My biggest concern right now, is the possibility, that the world may end in less than five years.
NO, I do NOT want to predict it will, but too many people are living like it will. Crime is running rampant, the value of assets, is at an all time low, and people's morality,,,,, has to jump to hit bottom. Fortunately, no, not everyone feels this way.

Ok, I am not an optimist right now, but I would like to return to one, so, no more gloom and doom. Let's take a chance, that life, and morality, will continue, and return.

So, let me report some good things. My portfolio, is beating the market, once again. Because I am doing well? Regretably, no. Just once again, the indexes are doing worse. I have long been an advocate, that picking good stocks, and companies, will make beating the indexes, an easy task. In bad markets, everyone loses. Maybe the most positive sign I see in the market, is my portfolio is once again, back in the "beating the market" mode.. Hard to be proud of beating negative numbers, but in these times, I will take it,,,, and run.

Now, here is what I have to offer you. Take a look at my portfolio. Truthfully, it has a lot of BIG RED numbers in it. That will be abundantly evident. Try to overlook that. The things I want you to look at are the companies I invest in, and the percentages of investments in each.

For the most part, it is a REASONABLY well balanced portfolio, in terms of asset allocation. Yes, it does have exceptions. TNH, I have touted many times, and I still do. Realistically, any single stock that has a 10+% allocation, is just too high. But, in the conservative market we are experiencing right now, it's dividend is making it one of the fastest in stock price growth. Yes, it is a two for one, and as such, more portfolio is over-allocated to it (if markets were normal). For the short term, I can ride this one. For one other reason too. It's stock price makes it harder to get into later. It is not cheap, compared to many others. Easier to buy 50 shares at $10, than 3.1 shares at $125. Then again, the 3 shares may be the better value, in the long term.

NE, (Noble), is one of the percentages I want to keep high to. It is simply a performer. Good management, good company.

Most any company I have over 2% of is a good company. I do have some riskier ones in that mix too, and the most notable of that is JOYG. I have taken a POUNDING on it. But, for what it does, it is best in class. I can not say when things will return to normal (or when they will learn to make good estimates of earnings?), but I do believe in the company for good bounces. Hopefully, later, I will capitalize on that. For now, two things keep me in it, at my current percentages of investment. One, I do believe it will bounce. Another I have hope for (and not much faith, is MTW, Manitowic). The other goes back to previous investment. I had a fair amount of it. Do I want to sell at bottom prices? Not me! I am a LONG TERM investor. But, I do make short term adjustments. I will watch this one, and a few others. Percentages here are too high, for this market.

What do I like? Right now, I like some of the cheaper stocks. No, not because they are cheap.
Most cheap stocks will get you in a TON of trouble. Witness Forteseque Metals, a Jubak pic, struggling to stay in business. Then again, I did invest in it, but I did not bet the farm on it either. Some things, whether you invest in, in a big way, or a small one, you keep, for the possible, but not guaranteed bounce back. Be willing to accept some losses. I still like AXAS and GLBL for bouncers. GLBL, has a unique market niche, that it builds refineries, and services for them. It is not a big business with huge demand, but it is the best at what it does. AXAS, is a tiny player. A virtual guppie, in a BIG pond. And, they are very good at what they do. They will either amass cash, or be eaten up (likely both). Both of those prospects are good for investors.

Where is the market going? I find it hard to bet against precious metal miners right now. I think the dollar will devalue, and the value of gold will increase. I have long been a fan of BHP, as a truly diversified miner, of all natural materials. Also, a well managed company. That one is a no brainer to me. I have a fair amount of it, and I wish I had more. Not at the price of risking my existing diversification though. But, a portfolio of 5% of it will be a winner, in time. Now, I look to AUY, GG, and possibly, KGC, as premiere gold miners. Why miners? If gold goes up that much, well, those keeping, and producing, should beat those hoarding. And, if gold goes up, so will silver. It's price, although not as great, has historically, kept pace with gold, albeit slower. I look to HL (Helca) for silver. Then there is copper. FCX, has been a HUGE dissapointment lately. Percentages in my portfoilio, say I have too much of it. It may still be a takeover target, and was, and may still be for RIO. My guess, is BHP, is the more likey to take this one. And, I do think it will be taken, within two years.Which is why, I still maintain a fairly high percentage of it. Will I make up my losses in this. No, I don't think so. I can cut my losses though. And, if you are not in it, it might be something to consider. Again, I would not bet the farm, but, it has a good chance.

Most of the rest, is just good diversifaction, in good companies. The stocks may be broken.

Most are right now.

Small percentage investments, in a lot of good companies, is the way to market beating results.

And, together, we can all pray,,, there is a future,,, beyond five years.

Because if there is not, criminals will increase activity, and their population will grow. And you can forget about anything like, making money. Even that has a good side though. You won't need any. It will be worthless anyway.

So, let's pray there is a future. And, assume there will be one. The alternative is too bleak to consider.

Mine is not the only way. Use it as a guide,,,,,, and by all means IMPROVE on it.

It has some good dividend producers, and some good stock price growth stocks in it too. So, without giving up reasonable diversity, I would love to know how you did it.

Comments: View Comments |  Monday January 26, 2009