Opportunities Portfolio end of quarter review
All I can say about the 3rd quarter performance of this site’s Opportunities Portfolio is that it was an opportunity to lose money. Only 3 of the 14 stocks had positive returns and a third of them decreased by 40% or worse. But first, a little background on this portfolio. My Opportunities Portfolio has been a collection of stocks that I believed were good opportunities for a variety of reasons: Some long term holds, some trading ideas, some turnarounds, some international stocks, some just to keep an eye on. My tracking method started each quarter with an equal dollar weighted amount of each stock and watching how they do throughout the quarter. There would be no position changes except for complete addition or subtraction of a company.
If my memory is correct, as recently as the end of August this portfolio was in positive territory. Then the bottom fell out of the market and the aggressive stocks I have in the portfolio fell even harder. The three stocks with positive returns were Copa Holdings (CPA: 59.48 +1.73 +3.00%) up 15%, Headwaters (HW: 5.31 -0.04 -0.75%) up 13% and Leucadia (LUK: 25.26 -0.05 -0.20%), which I added to the portfolio on August 4, gained 3.5%.
Here is a quick list of the off 40% (approximately) dogs:Gigamedia (GIGM: 3.22 -0.05 -1.53%) -38%, KHD Humboldt Wedag (KHD: 13.90 +0.11 +0.80%) -39%, Terra Industries (TRA: 46.33 -0.57 -1.22%) -40%, Tetra Technology (TTI: 13.10 +0.13 +1.00%) -41%, Silver Wheaton (SLW: 15.46 -0.09 -0.58%) -44% and Aegean Marine Petroleum Network (ANW: 27.20 -0.27 -0.98%) -45%. The returns of these stocks are quite surprising because all are companies with growing revenues and profits and I expect that to continue for the coming quarters. In this falling market shareholders are dumping all stocks, regardless of the longer term prospects.
The results of this portfolio show the pitfalls of a 100% invested buy-and-hold philosophy. Starting on October 1 I am converting the Opportunities Portfolio to an actively managed (hypothetical) one similar to what I started with in the 2nd quarter for my Income Portfolio. I have loaded the portfolio tracking site with stock positions using the Sept 30 closing price and will be managing the positions in the portfolio. More on the new system tomorrow.
The portfolios on this site are hypothetical and are for informational purposes. I use them as tracking and learning tools for myself and hope my readers do also.
Note: I currently hold long positions in GIGM, KHD, HW and SLW.
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