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What is everyone buying/selling?

edited June 2011 in Fund Discussions
Maybe we can make this a thing at the end of every month. Curious what people are buying/looking at buying or selling/looking at selling.

Personally, looking at buying some MLPs and despite not being a Buffett fan, considering Berkshire-B from a valuation perspective. Also considering Leucadia, possibly Loews and more Jardine Matheson.

Looking at water-related funds (not that there's many of those yet.) No more commodity funds, but not selling.



Comments

  • Not much right now, I rebalanced a little out of Parnassus Small Cap (PARSX) and into Fairholme (FAIRX). I'm considering creating a small position in Aston/Fairpointe Mid Cap (CHTTX) from about half Vanguard Total Stock Market Index (VTI) and half Parnassus Small Cap (PARSX), but I probably won't make that move until the end of the next quarter.
  • Sitting on hands until numb since repositioning bond funds in Jan-Feb-Mar into newer absolute return fixed income funds. Sold MLPs (TPZ) at year end with funds/etfs being launched to capture the increased flows. The entire mlp universe is relatively small, funds have to mindlessly crowd into the same few larger cap names regardless of valuation. Cut floating rate (ffhrx) in half with increased flows and diminished convenant-lite credit quality. Contrarian I guess, wherever the interest is gaining loses mine. Put cash-like reserves into the shortest term Fidelity munifund when the municipal market sold off. Sold int'l real estate, int'l small caps as the existing funds were being closed due to performance chasing and new funds being launched. More benefit was gained by avoiding the losses than whatever the proceeds were rolled into. Some of that information was gleaned from Fund Alarm buzz, what's hot what's not. For example, after REITs had collapsed and someone finally got around to asking if its time for REITs again yet there was nothing but jeers and catcalls so I bought

    Also interested in both the long-term water and agriculture trends. The water etfs hold companies that in my guesstimation can or would be as much hurt as helped by water scarcity/cost. The water guys like to say that water is the software of agriculture, farmlands the hardware. After searching took a position in Tetratech/ttek with revenues 85% water related...consulting, engineering, project management..public/private globally...for a long term hold. For agriculture holding Sprott Resources Corp (large phosphate deposits and One Earth Farms leasing Canadian tribal agricultural lands.) Also holds oil & gas producers, gold bullion in a 2/20 hedge fund structure.

    Motto-- More has been lost chasing yield than any and all scams combined whether Madoff, the entire credit debacle, you name it. In a yield starved world with anything FDIC insured offering zero dot zero return-free risk I think one is surrounded on all sides at present with the opportunity for loss offerings of a yield 'free lunch.' My response was some newer market neutral/long short fixed income funds which have yet to stand and deliver in a rising rate market according to claims (like Libor plus three hundred basis points with plus or minus 5% percent annualized volatility.)
    I can live with that, question is, a very large question, can they do it while incurring heavy trading costs employing complex derivative trading strategies across various markets. It isn't my perfect world preference, more 'if you can't lick'm join'm.' Where hedge funds and hedge fund tactics are not a major influence on the financial markets, they _are_ the market. With whipsaw risk-on/risk-off market action at the speed of a Milwaukee Sawzall. Good luck with that, a recipe for a retired uneducated nobody to be sliced and diced just for trying to preserve capital for a better day while yielding something, anything.

    Years ago I had a large position in Vanguard Short-Term Investment-Grade precisely for the rising rate protection with duration of a couple years. It was a year in which interest rates spiked far above the upper end of analyst consensus estimates, maybe the year ('94?) Orange County went bankrupt accordingly. I was duly impressed with the principle loss, not a lot in percentage terms but erasing several years of modest interest returns, vowed never to do that again so won't. There is life beyond bonds for those whose accumulation phase has ended, what that might be is for each individual to figure out specific to situation and circumstance. There is bewildering array of products to fasten together a response to historically low yields for sidestepping what has high probability of occurring over the next few years, whether rapidly and disorderly or gradually. I haven't a clue regarding the strategy I've adopted and fully expect modifications, some enterings and exitings as things progress and (fail to) perform.

    'There is a fine line between fishing and just standing on the shore like an idiot.'

    --comedian Steven Wright

    Good luck to all.

  • Hi Scott,

    I am buying, a little at a time, an equal weight S&P 500 Index fund. I plan to position cost average this position over time form now in to fall with buys based upon technicals.

    I am in a good diversified position within my portfolio with a current asset allocation of about 20% cash, 25% income, 50% equity and 5% other. I plan to increase my equity ballast, over time, by 5% to 10%, from its present level by fall. Currently, the portfolio's yield is north of five percent which I feel is good since cash is paying so little, if anything, in interest.

    Good Investing,
    Skeeter
  • Buys: a little more Arivx, Exitx, Mapix, Msmlx, and a consumer staples ETF. More nibbling than anything else ...

    Repositioning : moved some out of Pimco's hands and added to DoubleLine (EM and Total) and TCW (Core).

    Very short term: bought back into a Europe large-cap ETF, thinking this bounce may last at least through the holiday.

    Close-watch list: a few stocks, mostly very large cap Asia & Europe. I've been out of individual stocks for several months; hold only 3-4 max. at any one time, and not really serious positions.

  • edited June 2011
    Skeeter, could you please explain how you get a portfolio yield of 5%+ with the listed asset allocation? If i generously assume cash is yielding 1%, (and so is "other" whatever it is), income -- i assume fixed income -- even if most is in junk and EMD should be no more than 8%, and equity -- provided you don't have any growth stuff -- 2%, your portfolio yield comes to 3.25%. Any secret sauce or my approximation has gaping errors?
  • Very interesting stuff, PS -- thanks for sharing. My only comment is that asset allocation works long-term, over the cycle, and fluctuations in any given year will always be there, for any asset class. so your vanguard short-term fund had probably only one (may be 2) loosing years in a very long time -- and you jumped off the ship. your "Libor + " funds also work over the business cycle -- or at least intending to. In a year like 2008, when EM lost 50 to 60%, US -- 40% and unlevered credit -- about 25%, there wasn't a place to hide. Our own "Libor +" product return was negative, even though Libor was positive. (it is close to zero now). So don't place too much confidence in these funds.
  • Hi Scott,

    I have been buying FAIRX, PVFIX (Pinnacle), USAGX (below NAV 37), TPINX (templeton global bond) and bought BRK.B last week. Barrons recommended miners and BRK.B recently. In this environment, I want to own hedge fund type mutual funds who protect on downside. This idea was pitched by fundmentals (hope I have correct spelling) I think (or at least that is how I interpreted his thinking). I don't qualify for hedge funds + most of the good ones are closed + fees are high. As such I consider FAIRX and PVFIX as such vehicles. PVFIX is not cheap though + performance has been lagging due to heavy cash alocation. Also not much downside protection with FAIRX recently. Idea with buying FAIRX and PVFIX is to buy low. As opposed to buying CGMFX near the top which I did. Also TAREX (third avenue real estate) is holding 20% cash but not buying. I think we are in a sideways/bear market that won't end for a while. I was thinking of buying a natural resource fund if oil gets near/below 80. Also DLTNX and VWITX (even though Gundlach was not a fan of munis) were on my buying list a while back. Also bought some PRSVX, SLADX and DODFX when they got cheap. Although not sure how much of SLADX underperformance is due to sino forest (spelling?) holding. I sold some portions of my bond funds a little while ago (a little early if you ask me): VFICX (corporate intermediate), VWITX (muni), and VFIIX (GNMA).

    ET
  • FAIRX can become more conservative if Berkowitz desires, but in terms of hedge fund status, the fund cannot hedge against the downside in any manner. I'm not sure if Berkshire can to any great degree, but I do know it can hedge as it does use S & P puts at times. I decided to buy more Jardine Matheson (sort of an Asian Berkshire) instead of Berkshire this week, but I continue to look at BRK-B. In terms of buying skilled managers who are underperforming, I think it's a good idea with a portion of the portfolio, and I've gone a bit with Janus Overseas.

    There are some UK hedge funds that can be purchased on the London market or in some cases as "foreign ordinary" shares (such as BH Macro and Third Point Offshore) on the pink sheets in the US, but the pink sheet shares barely trade and have very large spreads between bid/ask. Hedge fund manager Bill Ackman is apparently talking about starting a public fund again. Greenlight RE (GLRE) is a reinsurance company where the float is invested with David Einhorn's Greenlight Capital.

    I like Templeton Global Bond's currency flexibility, which I think will be quite useful in the years ahead. I also like Third Avenue's real estate views. In terms of Selected, at least I suppose Sino-Forest is 1.57% of the portfolio, although it's surprising that so many large and well-known funds were in this stock.
  • Hello,

    I wondered if an astute reader would pick up on this … and, I thank you for the question and the opportunity to respond with explaining my portfolio’s yield in more detail.

    The yield can be computed several ways. One on amount invested and two on total portfolio value. I compute it both ways. In addition, one of the advantages of owing dividend paying stocks is that many of them increase their dividend payments to their share holders over time. In the past year my dividend holders, on average, have increase their dividend distributions to their share holders by about 20%. So while the fixed income investor’s distributions have remained mostly constant … I have been getting distribution increases from my dividend paying stocks and funds of same.

    So, over the past year the dividend increases from stocks now covers the low to no yield on the cash part of the portfolio. If I were to back cash out from computing my portfolio’s yield it would be north of six percent.

    So indeed, from my perspective, it pays to own a good slug of good dividend paying stocks and mutual funds of same.

    Good Investing,
    Skeeter
  • edited June 2011
    Same as above...
  • Howdy fundalarm/Skeeter,

    I'll post the same data to both of you for a reply, so that you are notified, if you have that preference selected for your name.
    Not pure science numbers with this; but we hold 15 bond funds; some being a much larger % of total holdings than others...but here are some rough numbers for yields:

    5 HY/HI funds avg. yield = 7.4%

    10 mixed/multi sector funds avg. yield = 4.5%

    All 15 bond funds avg. yield = 5.5%

    Just a bit of data from our mix.

    Take care,

    Catch
  • i see. usually, if you buying something really low, your dividend yield at your cost basis could indeed be very high. however, as your porfolio appreciates to a more normal level, the dividend yield goes down and you record your appreciation as unrealized capital gain. so ordinarily when people refer to portfolio yields, they are talking about the current yield. and that is the information found on many websites. (there are of course SEC yields, etc, etc., but i am not going into such details.) can we peek at your current yield (without accounting for increasing dividend yield)?
  • edited June 2011
    Hi fundalarm,

    I don't follow what you are presenting. I only replied to you and Skeeter as a reference point to his portfolio yield vs what our portfolio current yield indicates via M*. I do view the 30 day SEC yield via Fidelity which may be accessed with the below link. I don't find the SEC yield at M*. NOTE: removed link...didn't work; perhaps internal to Fido.....

    "can we peek at your current yield (without accounting for increasing dividend yield)?"

    >>>>>Not sure what you want with this question. Would you like to see the current/M* yield for each fund? Using the MFO funds link will let one go to M* from any of our listed funds when posted at the month's ending period.

    We have not had to deal with any taxable gains yet, as all of the funds are tax sheltered and won't be drawn upon until needed in future years.

    Perhaps I have been working outside too long today in the hot summer sun !

    Take care,

    Catch
  • hey there, Mark. i responded to Skeeter! no worries.
  • Hello fundalarm and back to you,

    Here is my perspective. On new investments being bought the only way to determine yield is on the purchase price. That’s how bonds, CDs and stocks are sold … and, the purchase amount becomes the amount invested because that is what one paid for the security. In the case of a dividend paying stock that has a history and does grow its dividend … then, the effective yield increases over time. I have some stocks that have an effective yield on amount invested of better than eight percent. As these companies grow their dividend then the effective yield on amount invested keeps rising. With this, and form my perspective, buy and hold is not dead.

    A mutual fund that has a history of raising its dividend to its investors is Thornburg Investment Income Builder, the A share ticker is TIBAX.

    I hope my explanation has been insightful and beneficial as to how one can grow their income within their portfolio without taking money out of their pocket. When you take new money out of your pocket and buy new securities then the amount invested increases by the purchase amount within the portfolio.

    Good Investing,
    Skeeter
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