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Author: washcomp Big gold star, 5000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 457821  
Subject: Jeff’s portfolio for ridicule & comment Date: 1/15/2011 7:40 PM
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Now that Doc has taken over the Metar contest posting, I figure I’ll throw out one of my periodic portfolio listings 
with comments for others to poke fun at (or hopefully offer constructive criticism on).    Verizon is now gone 
(leaving green behind, which I consider a good thing).  Silver Wheaton is also gone (in that case leaving a 
substantial puddle of blood behind).

My experiment with the Mechanical Investing board screens is doing well, so far.  I’m following there rules 
reasonably closely, but admittedly I pay some due diligence attention to what I’m buying and have been 
evening positions out to round numbers of shares rather than anally making each of the positions exactly 
equal.  I’m also fooling around with some screen picks based on Mike Klein’s work and picked up at the 
Dynamic Value Investing board.  Some of these picks scare me, so I’ve only tried a couple of them.  I’ve 
listed the names of the screens I’m currently using (cycled every Monday).  I’ve dropped one and have 
selected another couple that I will try in parallel with the ones I’m using.  Right now, with the exception 
of Bluecheaps make up about 5% and the rest of the screens about another 4%.  Assuming this strategy 
continues to work for me, I could see most trading being screen generated and comprise as high as 25% 
of the portfolio.  In the meantime, I’m still being cautious as I don’t want to be lulled in by beginner’s luck.

I’ve finally added Vale to my BHP(BBL) and RIO holdings.  Part of this was based on my getting sick of waiting 
for it to come down, part based on a slight dip last week, but mostly based on my perception that the Aussies 
will have their supply chain impacted and Vale may benefit from an increase in commodity prices.  

I went into financials again with JPM and GS.  I may swap the Goldman for C (or maybe just add some Citi 
– we’ll see).  I’ve added a couple of Metar contest picks (thanks FastMike and PolymerMom for the ideas) 
and am looking at a couple of others (FEED and yup – TBT come to mind, though it may be too late for 
safely entering DBA).

Emerging markets are still covered by ETF’s.  Much as I am against these vehicles in general, they just make 
for a convenient way to broadly play an idea.  I’ve put the MOO ETF into this category as I feel that much of 
its growth  will come from the developing countries.  I’ve started rebuilding my electrical equipment sector 
idea by re-adding ABB.  About 30% of the portfolio is made of stuff that comes out of the earth.  There is no 
assurance that this is as much of a short on the USD as it once was.  There is currently a deficit of Eurozone 
domiciled stocks as I feel there may be more shoes to drop over there.

Much will depend on how quickly and in what respects China slows down their economy and whether and/or 
how they shift their buying of debt from the US to Europe.

And yes – I am aware that over 70 positions seems like a lot, but the use of the MI screens generates lots of 
stocks, and I find that this portfolio doesn’t track the S&P particularly well (I’d say no closer than +/- .15% on 
a given day – sounds small but can add up over the year).  As well as my own philosophical approach ending 
with the purchase of bunches of stuff.  I have recently switched some of my trading to Interactive brokers and 
have had the pleasant experience to see my first $1 commission (while Vanguard charges $2 a trade, they are 
taking advantage on pricing and I’ve decided to stop using them for most brokerage activity.  While Fidelity 
has about as good an execution model as IB, they are at $8 a trade and over the course of a year there can 
be a significant overall difference in costs.

I’m spending an increased amount of time working on a weighted market timing system (might do as much 
good as a roulette betting system – but one can always hope).

Anyway, all hooks, jabs, jokes and valuable suggestions are sought and appreciated.

Jeff 

SymbolCompany Name

CVX   Chevron Corp                                           3.07%
KMP   Kinder Morgan Energy Partners LP                       2.88%
EXC   Exelon Corporation                                     2.84%
LINE  Linn Energy LLC                                        2.56%
RDSA  Royal Dutch Shell PLC                                  2.31%
KMR   Kinder Morgan Management LLC                           2.17%
PWE   Penn West Petroleum Ltd                                2.12%
TOT   Total SA                                               1.93%      bluecheaps
MRO   Marathon Oil Corp                                      1.41%
PBR   Petroleo Brasileiro SA                                 1.24%      bluecheaps
SDRL  SeaDrill Ltd                                           1.12%
                                                 OIL-GAS          23.64%

T     AT&T Inc                                               3.88%
RTN   Raytheon Co                                            3.32%
AAPL  Apple Inc                                              2.31%
CSCO  Cisco Systems Inc                                      2.10%
GOOG  Google Inc                                             2.06%
MSFT  Microsoft Corporation                                  1.88%
HPQ   Hewlett-Packard Co                                     1.53%
INTC  Intel Corporation                                      1.40%
RIMM  Research in Motion Limited                             0.64%
TER   Teradyne Inc                                           0.49%      peg-minimalist
MKSI  MKS Instruments Inc                                    0.45%      valuehook
NVLS  Novellus Systems Inc                                   0.37%      peg-minimalist
LRCX  Lam Research Corporation                               0.35%      valuehook
IBM   International Business Machines                        0.32%
                                              TECHNOLOGY          21.11%

JNJ   Johnson & Johnson                                      4.17%
RHHBY Roche Holding AG                                       2.36%
LLY   Eli Lilly and Co                                       2.31%      bluecheaps
NVS   Novartis AG                                            1.88%
ZMH   Zimmer Holdings Inc                                    1.84%      Metar-Polymermom
PFE   Pfizer Inc                                             1.84%
ABT   Abbott Laboratories                                    1.55%
MDT   Medtronic Inc                                          1.23%
MRK   Merck and Co Inc                                       1.13%
SCR   Simcere Pharmaceutical Group                           0.41%      mikeklein
                                          DRUGS & PHARMA          18.73%

VWO   Vanguard Emerging Markets ETF                          3.21%
DEM   Wisdom Tree Emerging Markets Equity Income Index       1.98%
MOO   Market Vectors--Agribusiness ETF                       1.87%
ILF   iShares Latin America 40 Index ETF                     1.78%
DGS   WisdomTree Emerging Markets Small Cap Dividend Fund    1.27%
IBA   Industrias Bachoco SAB de CV                           0.86%      mikeklein
                                         EMERGING MARKET          10.96%

BBL   BHP Billiton PLC                                       3.93%
VALE  Vale Sa                                                1.20%
RIO   Rio Tinto PLC                                          1.18%
CLF   Cliffs Natural Resources Inc                           0.59%      valuehook
ARLP  Alliance Resource Partners LP                          0.47%      yldearnyear
RES   RPC Inc                                                0.29%      valuehook
                                                  MINING           7.64%

GS    Goldman Sachs Group Inc                                1.74%
JPM   JPMorgan Chase & Co                                    1.49%      Metar-FastMike
BGCP  BGC Partners Inc                                       0.39%      yldearnyear
AAI   AirTran Holdings Inc                                   0.30%      peg-minimalist
                                               FINANCIAL           3.91%

GE    General Electric Co                                    1.87%
ABB   ABB Ltd                                                1.56%
                               ELECTRICAL INFRASTRUCTURE           3.43%

MMM   3M Co                                                  2.91%
BRKB  Berkshire Hathaway Incorporated                        2.70%
WMT   Wal-Mart Stores Inc                                    1.81%
LOW   Lowe's Companies Inc                                   0.83%
BRBMF Big Rock Brewery Income Trust                          0.69%
PG    The Procter & Gamble Co                                0.48%
DLX   Deluxe Corp                                            0.40%      yldearnyear
MGA   Magna International Inc.                               0.39%      valuehook
CPY   CPI Corp                                               0.36%      yldearnyear
                                             OTHER STUFF          10.58%
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Author: OffshoreDriller Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 349232 of 457821
Subject: Re: Jeff’s portfolio for ridicule & commen Date: 1/15/2011 8:37 PM
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Jeff-

I was wondering why you favor the base metals over precious metals?

What about some of the ones that co-mine copper and gold, like FCX or AUY? perhaps Vale and Rio or BHP do this, but I am not as familiar with their mine output.

I got back into NEM Friday, feeling this gold selloff is about overdone at this point. I have calls in ABX that expire next Friday, so I wanted to maintain some largecap miner exposure. I have nice amounts of GDXJ (thanks to sonnypage for pointing that ETF out to me on a nice fall afternoon on the banks of the Chatahootchie a few years ago)

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Author: washcomp Big gold star, 5000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 349233 of 457821
Subject: Re: Jeff’s portfolio for ridicule & commen Date: 1/15/2011 9:03 PM
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I am not against gold, but I have an easier time predicting the price of commodities in general. All three of BHP, RIO and VALE end up mining some of nearly everything (including gold). With over 20% of my total assets in "anti-dollars", currently owning gold stocks as well is simply piling more weight on the same side of the boat. FCX may be becoming cheap enough to pick up, but again it's parallel to the three guys I already own as they mine copper as well.

Last time I posted my portfolio, I likely owned a gold miner (if not then, then the time before), but now I own some Goldman Sachs (which at least has a name that starts out right :-).

Make hay while the weather is fine

Jeff

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Author: joelxwil Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 349258 of 457821
Subject: Re: Jeff’s portfolio for ridicule & commen Date: 1/16/2011 9:59 AM
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Well, you are certainly diversified. How long do you expect to hold these stocks? Or what is your sell discipline?

Personally I never think of a time frame when I buy something. I just hold it so long as it is doing well.

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Author: tim443 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 349264 of 457821
Subject: Re: Jeff’s portfolio for ridicule & commen Date: 1/16/2011 11:32 AM
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How long do you expect to hold these stocks? Or what is your sell discipline?

joelxwil,

Allow me to jump in here, to the first question anywhere from 20 seconds to a few months. To the second "whim".

I've given up reading Jeff's portfolio posts even when I get to them immediately as they have generally been revised before I read to the bottom of the list. }};-D

**** not signed ****

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Author: amuseing Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 349271 of 457821
Subject: Re: Jeff’s portfolio for ridicule & commen Date: 1/16/2011 12:26 PM
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Hi Jeff,

I make it a discipline to read and study Louise Yamada's Techpoint newsletter every month. One of the things she
does is go sector by sector and look at the relative strength relative to the S and P 500 looking to capture the structural trends.

From that point of view your presence in Energy and Materials is positive, Tech may be in a temporary consolidation and health
care is lagging as are financials. No earth shattering news there but a reminder to stand back and contemplate which sections of your portfolio might perform better than others and adjust accordingly. I have found including her perspective in my decisions very helpful but I'm probably still on the steep end of the learning curve.

V.

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Author: tipiper Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 349283 of 457821
Subject: Re: Jeff’s portfolio for ridicule & commen Date: 1/16/2011 2:36 PM
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V. Amuseing said: I make it a discipline to read and study Louise Yamada's Techpoint newsletter every month. unquote.

this is difficult to do as the newsletter is NOT quoted anywhere, as per the LYA newsletter rules of engagement.

Cost is (last time I checked) over $1200 a year, no print copy, no cut and paste. I certainly would pay this if the cost fit my expense curve, which it does not.

http://www.lyadvisors.com/index.htm

so I follow her interviews using a Google Alert.

Ti

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Author: washcomp Big gold star, 5000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 349310 of 457821
Subject: Re: Jeff’s portfolio for ridicule & commen Date: 1/16/2011 7:45 PM
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Thanks for the comments (even Tim's - he's just pi$$ed becaus eI don't play with his dreadful pennies anymore :-). As far as duration of hold, Tim's right that some positions have not seen the light of a second day, but there are a small handful there that have been around for decades.

The holding fall into a few groups:

1) Stocks picked based on macro concerns or projections. These include the miners and many of the energy stocks.

2) Stocks based on mechanical screens found on TMF's MI board. This is a new venture for me, but the backtested results are promising. In the sense that there's no point in pulling out a gun if you're not willing to pull the trigger, once something seems to have decent enough eficacy, the only way I'm going to learn what works and what doesn't is by using live ammunition.

3) Stocks picked based on their fundimental finacial strength and a stream of decent dividends. These frequently end up as core positions.

4) Blatent opportunistic bets. Cisco is one of these right now - picked up when they tanked a few weeks ago and being fattened for market right now.

5) The finacials are actually only about a week old and may also be sold shortly. I feel that the country is discovering that these guys will continue to be supported and there's a chance to make a handful of bucks holding them until enough of them issue earnings "surprises".

6) I'm huffing and puffing as I try to move the health guys to revert to the mean, but some (like LLY) are beginning to frustrate me. The others are up a bit and spin out reasonable dividends.

7) I've begun to reassemble the suite of electrical equipment manufacturers who, at one point, made up a chunk of my portfolio. GE (a long term hold) has been joined by ABB who I think has a wider moat than most.

8) I am still largely avoiding Eurozone domiciled firms, but I suspect that I may find some way to participate without exacerbating additional currency exposure.

Amusing makes a good point. I break the portfolio into groups to better understand the ramifications of what I'm doing so I don't end up putting too many eggs in one basket. As many are aware, I also have fairly substantial currency hedges against a drop in the US dollar. Those positions bias my equity selections to avoid increasing risk while trying to lean over to grasp brass rings.

I work pretty hard to beat the S&P as a goal. My nominal goal on a daily basis is a capital gain of at least .2% and beating two our of the three major averages. On a daily basis, I don't always make the cut, but over the course of each year, I generally stager across the finish line relatively unembarrassed.

I sell when a stock either substantially exceeds my expectation of success or begins to decline to the point that I feel there would be a benefit to either dumping them perminantly or buyuing them back cheaper. Also, the Mechanical Investing screens tend to churn stocks more than I'm useful. I also occaisionally day trade index futures (such as SPY or QQQ) in large lumps as day trades based on my currency relationshiop theories, so I guess that counts as well (though I wouldn't call that investion). OTOH, I don't mind holding a stock for extended periods of time if it continues to behave as expected.

While I don't mind the juice that increased exposure to equities gives during an extended bull market, I am paying close attention to any tremors which will cause me to take my chips off the table and tuck my head between my knees.

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Author: washcomp Big gold star, 5000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 349311 of 457821
Subject: Re: Jeff’s portfolio for ridicule & commen Date: 1/16/2011 7:46 PM
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This time in English (never pasted back from spelling checker :-):

Thanks for the comments (even Tim's - he's just pi$$ed because that I don't play with his dreadful pennies anymore :-). As far as duration of hold, Tim's right that some positions have not seen the light of a second day, but there are a small handful included as well that have been around for decades.

The holding fall into a few groups:

1) Stocks picked based on macro concerns or projections. These include the miners and many of the energy stocks.

2) Stocks based on mechanical screens found on TMF's MI board. This is a new venture for me, but the backtested results are promising. In the sense that there's no point in pulling out a gun if you're not willing to pull the trigger, once something seems to have decent enough efficacy, the only way I'm going to learn what works and what doesn't is by using live ammunition.

3) Stocks picked based on their fundamental financial strength and a stream of decent dividends. These frequently end up as core positions.

4) Blatant opportunistic bets. Cisco is one of these right now - picked up when they tanked a few weeks ago and being fattened for market right now.

5) The financials are actually only about a week old and may also be sold shortly. I feel that the country is discovering that these guys will continue to be supported and there's a chance to make a handful of bucks holding them until enough of them issue earnings "surprises".

6) I'm huffing and puffing as I try to move the health guys to revert to the mean, but some (like LLY) are beginning to frustrate me. The others are up a bit and spin out reasonable dividends.

7) I've begun to reassemble the suite of electrical equipment manufacturers who, at one point, made up a chunk of my portfolio. GE (a long term hold) has been joined by ABB who I think has a wider moat than most.

8) I am still largely avoiding Eurozone domiciled firms, but I suspect that I may find some way to participate without exacerbating additional currency exposure.

Amusing makes a good point. I break the portfolio into groups to better understand the ramifications of what I'm doing so I don't end up putting too many eggs in one basket. As many are aware, I also have fairly substantial currency hedges against a drop in the US dollar. Those positions bias my equity selections to avoid increasing risk while trying to lean over to grasp brass rings.

I work pretty hard to beat the S&P as a goal. My nominal goal on a daily basis is a capital gain of at least .2% and beating two out of the three major averages. On a daily basis, I don't always make the cut, but over the course of each year, I generally stager across the finish line relatively unembarrassed.

I sell when a stock either substantially exceeds my expectation of success or begins to decline to the point that I feel there would be a benefit to either dumping them permanently or buying them back cheaper. Also, the Mechanical Investing screens tend to churn stocks more than I'm useful. I also occasionally day trade index futures (such as SPY or QQQ) in large lumps as day trades based on my currency relationship theories, so I guess that counts as well (though I wouldn't call that investing). OTOH, I don't mind holding a stock for extended periods of time if it continues to behave as expected.

While I don't mind the juice that increased exposure to equities gives during an extended bull market, I am paying close attention to any tremors which will cause me to take my chips off the table and tuck my head between my knees.

Jeff

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