whateverworks

The Bold and the Beautiful

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I've had almost $100,000 cash sitting in the fund since selling 2 oil refiners a while ago and by nature I hate to see any money idle, uninvested. (That's not logical, of course. There are times when holding cash is absolutely the best strategy.)

Although my Strategy Lab Fund has been doing poorly, a few winning stocks have emerged. In addition, there are some good candidates from my other 2 funds and re-running earlier screenings at Reuters resulted in one interesting company.

The Russians are coming! The Russians are coming! Well, no they aren't because they have huge challenges at home. Even so, screening found Mechel Open Joint Stock Company (MTL) with 6.55B market cap. Mechel, one of the leading Russian mining and metals companies, unites producers of coal, iron ore, nickel, steel, rolled products, and hardware. Their products are marketed domestically and internationally. Metals are supposed to do well, worldwide, but is it crazy to invest in a country which has so many economic problems? On the other hand, if there's anything the Russians used to be known for it is heavy industry and today's Mechel has modernized. They are constantly announcing new equipment, new production levels, new warehouses, and so on. So I took a gamble and invested $20,000 in them.

In my Magic Micro Caps fund a recent top performer is Simclar Inc. (SIMC) with only 63.55M market cap. It is a contract manufacturer of electronic and electro-mechanical products primarily in the United States. In spite of the rise in stock price, it still looks like good value by microcap standards; so I added $20,000 of SIMC.

The top winner by far in my Strategy Lab fund is China Mobile (CHL) telecommunication and related services in Mainland China and Hong Kong, 221.69B Mkt. Cap. Since I'd bought only a modest amount of CHL in the first place I put another $20,000 into them.

In my Great Global Growth fund, which is composed almost entirely of ETFs, the top performer is iShares FTSE/Xinhua China 25 Index Fund (FXI). Has FXI gone up so much that it is now overpriced? Or will the fund managers stay ahead of the game? It's hard to argue with success and since I still have some ETF "allotment" left I added $20,000 of FXI also.

Now I have $15,000 cash left but will sit on it for a while. There's a couple of larger holdings which are down (still), VSEC and AXE. I might sell half, but not all, of these because they still strongly meet my criteria. If I do sell, what should I buy with the next block of cash? Maybe more PKX and RIO, which have been going up and which represent only a modest part of my holdings. Then, the second-highest winner in my Great Global Growth Fund, PGJ, looks good. But that is another Chinese ETF and perhaps I am sinking too much money into Chinese investments.

It is time to sit back and see what the next week holds in the way of trends.