Opportunities Portfolio – Year End Review
I currently have two hypothetical portfolios I track on this site. A few days ago I wrote the year end review of the Income Portfolio. Before we get too far into the new year I wanted to write some notes about the performance of the Opportunities Portfolio.
I started up the actively managed version of this portfolio on October 1, 2008. The portfolio holds stocks that I think have potential for significant returns from all stock picking disciplines: growth, value, international and unique stories. I personally have positions in a significant number of the stocks in the portfolio, but not all of them.
The portfolio started out on 10/1 with about 20% in cash and the stock positions weighted by my analysis of relative risk vs. reward. Those I considered more stable companies had larger weightings and the more speculative issues were smaller positions. As you probably know, October 1 was the start of the steepest decline of the recent bear market. The market went what seemed like straight down for 6 weeks and at one point the portfolio was down 48%, even with a relatively large cash position. As the market fell I added to several of the stock positions and have invested about 60% of the starting cash.
Portfolio performance for the 3 months ending on 12/31/2008 was a negative 26.9%. Of the 18 positions in the portfolio and the end of the year, only 2 showed positive returns: Silver Wheaton (SLW: 15.459 -0.091 -0.59%) had gained 17% and the share price of Nordic American Tanker (NAT: 30.38 +0.07 +0.23%) was up 5% and NAT had earned a dividend equal to 5% of the entry price.
The “top” losers in the portfolio were Green Hunter Energy (GRH: 1.2199 -0.0001 -0.01%) off 46%, Atlas Energy (ATN: 30.19 0.00 0.00%) down 43% and Terra Industries (TRA: 46.25 -0.65 -1.39%) also off 43%. Three stocks had been sold out of the portfolio, all losers. Star Bulk Carriers (SBLK: 2.88 -0.01 -0.35%) was sold for a 43% loss, Ashford Hospitality Trust (AHT: 5.91 +0.11 +1.90%) left down 35% and the bankruptcy of VeraSun Energy resulted in a 92% loss on the position.
As I write this the 3 largest holdings in the portfolio are KHD Humboldt Wedag (KHD: 13.92 +0.13 +0.94%), Aegean Marine Petroleum (ANW: 27.09 -0.38 -1.38%) and Atlas Energy (ATN: 30.19 0.00 0.00%). Approximately 40% of the portfolio is in international or global stocks. I am looking for places to put some of the cash to work and keep gravitating to South American companies, but want to make sure the bear is out of the woods before I make a serious move. The portfolio currently has $3,407 in cash.
Note: This Portfolio is hypothetical and does not 100% reflect my personal holdings. The discussion and data on the portfolios are for informational purposes only and are not meant to be investment or trading advice.
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