Monday, October 22, 2012

Portfolio Update for October 19, 2012

Here is the portfolio update through this past Friday, October 19, 2012.  The Dow was down over 200 points on Friday, so everything took a hit to end the week.  Here is the spreadsheet which contains all of my positions:

I've highlighted stocks in green that I'd like to add a bit to if the market continues to dip next week.  I've made several adjustments these past few weeks including:  Sale of NLY, adding new names ADM and GD.  Have strategically sold some TIPs to generate a bit more cash, and this past Friday added to several names including:  DOV, EMR, MCD, ADM, GD, TEVA, CMI, CSCO, AAPL, and MSFT.  Also received dividends from MO and CVX.

Here are the YTD performance metrics:

That's all for now,



  1. Hi Chump,

    Nice portfolio.

    At first look I thought your last column was about the Chowder's number?, but it is not. What does this number tells you? I am not sure it tells something?

    Also, I prefer to use 8 years historic p/e numbers to get a better understanding of the situation, I find shorter period are helpful in evaluating, but lack perspective. Why do you choose 6 years?

    What do you know about HAL that makes you like it?



    1. Hey Grox01:

      Yes, it's the Chowder number. My spreadsheet got messed up in the non-core section, thanks for pointing it out. I've edited out the errors. I don't use the Chowder number rigidly, but it's kind of interesting to track. As I look vs. previous posts, the number is dropping for several stocks - they've been adjusting forecasted growth downward - so looking at this or the estimated growth rate is useful.

      As far as historic PE, I like to look at many increments; 3, 5, 7, 10, 15 and 20 (if available) this gives me a good handle. I often read articles about undervalued stocks on SA, but they referencing the 15 year average. Most stocks I study in FAST Graphs changed fundamentally in 2008, and are now priced at a "new" lower PE than prior to 2008. To capture 2008, I look back 6 years. I think 8 years is too far, because your getting a dose of the "old" PE valuation, which will skew your normal PE higher. JNJ is a good example: The six year normal is 13.5, the eight year is 14.7, and the 15 year is 20.4. They're blended PE today is 14.2. So are they overvalued or under? I read an article today by RS, stating JNJ is ON SALE. I don't think so.

      I'll get back to you on HAL

    2. Not liking HAL too much today, ouch! Might need to add some more.

  2. the top half of the grid looks like the chowder rule, but the bottom half looks like it might be calculating an incorrect formula?

    when you buy stocks during a volatile market like this, how do you average into your positions? a certain percentage at a time or a certain amount of dollars?

    1. Hi Kolpin, nice to hear from you. See my comment above - you're right, I had a formula messing up in the spreadsheet.

      My target position size is around 4% give or take. I usually start a position with a 1% stake, especially if it's at or only slightly below fair value. When I see a position dip below my by price (which I hate!), I buy another %. I don't have a set rule for how much dip is needed to by more, so I just use a gut feel. I try only to add to a stock once every few weeks on big market drops (like last Friday), or individual drops, which happen all the time. If the stock is up from my purchase, I'll still add on a dip, as long it's still in an undervalue (15%) situation.

      Keeping this blog, and the spreadsheet help. If any of the underweight and undervalue positions drop this week (green names highlighted), I'll add a 1% sliver.

      I've been waiting to add to several core positions for awhile (WMT, MCD, KO). There all still too pricey, but a took a sliver of MCD on Friday when they missed their numbers.

  3. I added a little bit to some stocks on Friday, but I think that the market is accelerating to the downside and has more to go, so I'm going to wait until things settle down to deploy more cash. If there are some ex-dividend dates coming up, like HAS and OHI, I may buy a little bit at the end of the week.