Portfolio Update – Up 1.00% in May 2013

My portfolio balances at close of trading on 31st May were:

Ticker Price (C$) Price Change Percentage Industry
POW.TO $ 29.10 7.26% 6.8% Finance, Specialty
FTT.TO $ 22.66 n/a 6.7% Industrial Services and Supplies
TCK-B.TO $ 27.69 3.32% 6.5% Basic Materials
DII-B.TO $ 41.25 n/a 6.4% Consumer Cyclical
IFC.TO $ 61.35 n/a 7.1% Finance, Insurance
LB.TO $ 44.15 n/a 6.6% Finance, Diversified
XRX $ 9.11 n/a 6.9% Technology
S&P Fund $ 143.64 5.14% 12.9% US Equities
Bond Fund $ 225.35 -1.48% 33.3% Bonds
Cash 6.9% Cash
Total 100.0%

Overall my portfolio is up 1.00% since last month.  There were no cash contributions.  For comparison my TI Index is up 0.48%, the DOW is up 1.86% and the TSX is up 1.56%.

My investments have performed well against the TI Index, which was dragged down by gold and bond prices, but not so well against the pure equities indexes: the TSX and Dow. This is to be expected: it was a good month for equities but not for bonds.

The two value stocks that I bought last month did very well: Teck Resources (TCK-B.TO) is up 7.26% and Power Corp (POW.TO) is up 3.32%.  My S&P Fund is up 5.14%.  My bonds are down 1.48%.

The table above does not show the performance of stocks that were bought during the month (it only shows month-on-month performance).  I bought quite a few stocks this month so I am including an additional table to analyze their performance, as follows.

Ticker Cost basis Price today Gain (Loss)
TCK.B $27.03 $27.69 2.44%
POW.TO $26.20 $29.10 11.07%
IFC.TO $58.60 $61.35 4.69%
LB.TO $44.30 $44.15 -0.34%
FTT.TO $22.89 $22.66 -1.00%
XRX $8.90 $8.79 -1.24%
DII.B $41.01 $41.25 0.59%
Average 2.32%

In summary, my value stocks have gained 2.32% since buying them.  Performance would have been much better were it not for a sudden downturn in the two hours of trading today, during which the TSX fell 0.5% and the Dow fell 1%.  I bought Xerox (XRX) and Laurential Bank (LB.TO) today, and both are down materially!

My bond holdings are at 33.3%, which is very close to my target of 33.5%.  I have 6.9% cash which I can use to add another new position if prices fall.

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Portfolio Update – Down 0.20% in April 2013

My portfolio balances at close of trading on 30th April were:

Ticker Price (C$) Price Change Percentage Industry
POW.TO $ 27.13 n/a 6.9% Insurance
STN.TO $ 43.08 -3.73% 0.0% Services
TCK-B.TO $ 26.80 n/a 9.8% Materials
CSU.TO $ 137.50 10.11% 0.0% Information Technology
WPK.TO $ 18.74 -2.90% 0.0% Consumer Goods
MHP $ 54.49 2.86% 0.0% Services
YHOO $ 24.90 4.05% 0.0% Information Technology
CGL.TO $ 13.14 -7.59% 0.0% Gold Fund
XEM.TO $ 24.64 0.69% 0.0% Emerging Markets Fund
XIN.TO $ 20.29 4.53% 0.0% EAFE Fund
XDV.TO $ 22.15 -0.67% 0.0% Canadian Dividend Fund
XIU.TO $ 17.86 -2.62% 0.0% Canadian Equity Fund
S&P Fund $ 136.62 0.89% 12.4% US Equity Fund
Bond Fund $ 228.74 1.13% 34.1% Bond Fund
Cash 36.8% Cash
Total 100.0%

Overall my portfolio is down 0.20% since last month. There were no cash contributions. For comparison my TI Index is down 0.80%, the DOW is up 1.79% and the TSX is down 2.30%.

My investments have performed well against the TI and TSX indices, but not the Dow.  Winners this month include my EAFE fund (XIN.TO) up 4.53% and my speculative stocks such as McGraw-Hill (MHP) up 2.86%, Yahoo (YHOO) up 4.05%, and Constellation Software (CSU.TO) up 10.11%. Losers include StanTec (STN.TO) down 3.73%, and gold (CGL.TO) down a whopping 7.59%.

The big change this month was the sale of all speculative stocks, gold and non-value stocks.  As I wrote earlier this month, I am getting back to fundamental value investing.

My bond holdings are at 34.1%, which is a little more than my target of 33.5%, but acceptable. I have 36.8% cash awaiting deployment into value stocks as prices become cheaper.

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Getting out of Gold

Gold is down at US$1360/oz today.  This is a 20% decline year-to-date and a 30% decline from 2011 highs.  The chart is broken ending a 10 year bull market.  It’s time to get out.

  • Sell CGL.TO @ $12.18

POSTMORTEM

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Writing a month later, on 17th May, this appears to have been a good call.  After rebounding somewhat CGL.TO slumped and closed today at $12.06.

Gold is at $1365, 28% down from it’s 2011 high of around $1,900.  The S&P 500 has risen almost 50% in the same time period.  The historic bull run in gold seems to be well and truly snapped.

Taking a position in Barrick Gold

Gold is down 4% today and the Gold Miners down even more.  The sell-off was initiated by stories out of Europe that Cyprus would be forrced to sell 40t of gold to fund its bailout, and that other European countries might follow suit.  Barrick Gold (ABX.TO) is down 7.6% today.  I am betting on a reversal and think that this is a good entry point.

  • BUY ABX.TO @ $23.10

POSTMORTEM

Writing today, 15th April, this has been a terrible trade.  ABX.TO has been down up to 12% this morning.  Normally I would sell a speculative stock if it fell by 5% since purchase but there was no such opportunity here as ABX.TO opened down 7%.  I sold at an 11% loss.

  • SELL ABX.TO @ $20.57

UPDATE

Writing a month later, on 17th May, selling this stock was a good move.  The stock closed at %18.58 today.

Getting out of Telus, Re-entering Gold

I sold my last value stock today, Telus (T.TO).

  • Sell T.TO @ $70.70
  • Buy CGL.TO @ $14.04

I decided to go with the iShares Gold Bullion ETF (CGL.TO) rather than the Sprott fund that I owned before.  This is primarily due to the fact that the Sprott fund is priced in USD, which necessitates expensive foreign exchange fees whenever I trade it.

POSTMORTEM

The trades described above are part of a broad portfolio rationalization that includes many trades.  I have performed a single postmortem to cover all of these trades.  The postmortem is here.

Portfolio Update – Up 1.13% in February 2013

My portfolio balances at close of trading on 28th February were:

Ticker

Price (C$) Price Change Percentage

Industry

T.TO $ 70.89 5.19% 5.1% Telecommunications
COS.TO $ 21.11 0.57% 0.0% Energy
PHY-U.TO $ 13.76 -3.36% 0.0% Gold
POW.TO $ 27.56 5.07% 0.0% Financials
BMO.TO $ 64.21 1.94% 0.0% Financials
AAPL $ 454.58 0.03% 0.0% Information Technology
INTC $ 21.50 2.44% 0.0% Information Technology
IVV $ 157.05 4.62% 0.0% US Equity Fund
XEM.TO $ 25.12 n/a 9.8% Emerging Markets Fund
XIN.TO $ 19.06 n/a 9.6% EAFE Fund
XDV.TO $ 22.51 n/a 10.0% Canadian Dividend Fund
XIU.TO $ 18.61 1.64% 10.4% Canadian Equity Fund
S&P Fund $ 132.11 4.31% 20.9% US Equity Fund
EAFE Fund $ 100.11 1.91% 0.0% Global Equity Fund
Bond Fund $ 225.19 0.98% 24.7% Bond Fund
Cash 9.6% Cash
Total 100.0%

Overall my portfolio is up 2.43% since last month.  Excluding cash contributions my portfolio is up 1.13%.  For comparison my TI Index is up 0.45%, the DOW is up 1.40% and the TSX is up 1.08%.

My investments have performed well against these indices. Winners this month include Telus (T.TO) up 5.19%, S&P Fund (IVV) up 4.62%, and Power Corp (POW.TO) up 5.07%.  The only losers was gold down 3.36%.

My bond holdings are at 24.7%, which is a little lower than my target of 25%, but acceptable.

You can see from the “percentage” column in the table above that I have sold most of my individual stocks and my gold.  This is part of a broader portfolio rationalization process.  I expect to sell the final stock (Telus) and to buy back gold tomorrow.

Getting out of Canadian Oil Sands, Adding Global Funds

As part of my ongoing portfolio rationalization I need to sell Canadian Oil Sands (COS.TO) and iShares Core S&P 500 ETF (IVV).  I also need to move my gold holdings to another account – I will sell it here and buy it again later (gold is falling).

This is the account that I plan to use for global equities, and I have selected two ETF: iShares MSCI Emerging Markets Index Fund (XEM.TO) and iShares MSCI EAFE Index Fund (CAD-Hedged) (XIN.TO).

XEM is a three-star rated ETF with high liquidity that  holds emerging markets equities.  The ETF holds over 800 stocks – the top five are Samsung, Taiwan Semiconductor, China Mobile, China Construction Bank, and Gazprom.

XIN is a three-star rated ETF with high liquidity that  holds equities from Europe, Australasia and the Far East.  The ETF holds over 900 stocks – the top five are Nestle, HSBC, Novartis, Roche and BP.

  • Sell COS.TO @ $20.52
  • Sell IVV @ $150.94
  • Sell PHY-U.TO @ $13.26
  • Buy XEM.TO @ $24.74
  • Buy XIN.TO @ $18.73

POSTMORTEM

The trades described above are part of a broad portfolio rationalization that includes many trades.  I have performed a single postmortem to cover all of these trades.  The postmortem is here.