No. of Recommendations: 4
Take a few days off at the end of the quarter can really mess up plans for a Q3 summary.
Q3 was quite an interesting quarter marked by a general improvement across the port, but some
strange events within the individual accounts. Overall, I'm pleased with the quarter, but also
closed the quarter with a problem. A good problem actually- lots of cash to deploy.

Here's the Q2 summary

Q3 was influenced by two stocks- one that I sold too early and one that, in hindsight,
had an excellent entry point. The blunder was Christopher & Banks (CBK), a retailer I nibbled on,
and then didn't recall Seth Klarman's advice on buying on the way down. I closed out for
a small loss, even though a little voice said "buy more" a day into the quarter
What did I miss? Oh, just a stock that went from $1.20/sh in early July => $3.50/sh in early
September! If I had acted on my musing, I could have had a 200% gain in 10 weeks. Would have
been nice, but it didn't happen.

I would have been really cursing at myself if it hadn't been for an idea with a great
entry price- Primero (PPP), a tiny mining company with a single mine location. The stock
price had a great run that started in mid-July and peaking in early September. The day prior
to Whafa claiming a market top, I closed my PPP position. Goldcorp, Inc (GG) had
indicated it was reducing its 40.9% stake in PPP, to around 33% - that was my impetus to sell.

A quick detour to my Top 10
1. SeaDrill (SDRL) - Offshore drilling - 6.41%
2. Prospect Capital (PSEC) - Business Development Company - 4.74%
3. Verizon (VZ) - Telecom Utility Co. - 3.40%
4. The Southern Co (SO) - Energy Utility Co. - 3.25%
5. Aberdeen Asia-Pacific Fund (FAX) - Closed End Fund - 3.06%
6. Great Northern Iron - Iron ore trust - 2.94%
7. Old Republic Intl (ORI) - Insurance products - 2.83%
8. Navios Maritime Acquisition Corp - Oil tankers - 1.83%
9. Corning (GLW) - Diversified Electronics - 1.80%
10. Frontline (FRO) - Oil tankers/dry bulk - 1.76%

The two ideas that dropped out of the top 10 were PIMCO Global (PGP) and Thompson Creek (TC).
Both ideas are still in the port, just trimmed. PGP was trimmed earlier in the quarter,
while TC's trimming occurred on the same day as the PPP exit. Other exits also occurred-
Telenav (TNAV) and Niska Gas (NKA). Considering the problems that Apple is having with
maps on the iphone, maybe I should revisit the TNAV decision. Or at least, keep it on my radar.

HoHum, what about shipping? Well, Q1 ended with four ideas. It grew to eight ideas
for a brief period in Q3, but then got scaled back to four ideas by the end of Q3. All the
shipping ideas, except for SFL, were tanker plays. Most of the Q3 additions were to play
a bounce on Q2 results. Mixed results- some worked, some fizzled. Q3 is typically the rough
quarter for the tanker sector, especially for the owners who prefer to employ their vessels in
the spot market. So now I wait for the stock market to over-react on the negative side. Not
saying it definitely will, but for now I prefer sitting on the sidelines and watching.

All the exits and position adjustments means cash continues to pile up on the sidelines. Trying
to walk the fine line between money earning zilch on the sidelines while not finding any screaming
buys, has me tinkering with existing positions. That's how Corning (GLW) moved into my
top 10. Utility company Exelon (EXC) was a new idea in Q2, and I also found two
intriguing monthly dividend paying ideas- one is Gabelli Utility Trust (GUT), and the other
is a Business Development Company (BDC), Fifth Street Finance Corp (FSC). The latter was
somewhat intriguing- in a mid-year presentation, company materials indicate the dividend is
confirmed through Feb 2013, or 7-8 months out. Too good to be true? Maybe, but I have about
5-6 months to kick the tires and figure out whether the company can keep the trend going.

I mentioned elsewhere the lagging account is my Roth ac (the largest of my four accounts). A couple
of ideas have impacted the % gain, but I still think it can close out the year well. I
just have to find Superman, have him spin the earth back about 2.5 months, I load up on
CBK and PPP, then I'm sitting pretty. In the absence of Superman, I have to complete the
more challenging task of finding ideas that going forward behave similar to CBK and PPP.

Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.