April 8, 2005 Quick thoughts and generic investment discussion
1. The best time to buy an investment is when others are selling in mass. This is gut wrenching and difficult.
2. We don’t care about short term performance. We are accumulating positions now, that we hope will be quite positive for your portfolios 3 years and longer down the road.
3. I have no idea what the markets will do in the short term. I define short term as 3 years. I do not believe that anyone knows how the market will do short term.
4. If long term treasury rates went up 2%, a 20 year US Treasury bond would lose almost 20% in value. A 10 year bond would lose approximately 12%.
5. Some components and comments on specific investments below. Please keep in mind, that we erased the company names. Please keep in mind that the company mentioned is not necessarily the portfolio allocation position that is mentioned below. Please keep in mind that we could at any time eliminate the position mentioned. We will not be responsible for any errors in descriptions below, or for any errors in our analysis of the investments. We will not keep the reader of this post in touch with any updates to the companies or investments we mention below. The mentions of any investments, allocations or ideas below, should not be construed as any type of solicitation.
All over our site, you will see the need to be patient for sometimes extended periods ( sometimes 3 years). Well, here we are. Allocations to stocks, real high, hence risk of loss, also as great as ever.
a. an unnamed industrial company ( 3% of portfolio) – economy, hopeful value play, i like it because worlds largest manufacturer of their specialized product, very important in all economy uses. they will benefit if dollar gets strong. Strong dollar contrarians. We were weak dollar invested from 2000 till now. now we do have some of both, and that is the way it should always be.
b. an unnamed Power Company(6% of portfolio) – one of worlds largest power companies. sells electricity to Utility Companies. they are huge, and unheard of . long report i wrote at website. price has run up big, and frankly i would love to see it drop in half, without accompanying business concerns, and we would probably load up more .
c. Large Financial Company ( 7% of portfolio) – lets hope they aren’t an Enron. if not, money machine, that has a big black eye.
d. a few unnamed Pharma’s ( 8% of portfolio) – strong companies that are beat up bad. got to spend time on unnamed company today, i would love it at 20. could become bigger allocation if price were to drop.
e. Worldwide Publisher ( 6% of portfolio)– owns XYZ newspaper, XYZ magazine, XYZ text books and professional books, XYZ Books and XYZ Education
f. Worldwide Conglomerate ( 6% of portfolio) – properties galore, all angles, publishing, movies, TV, content, XYZ and huge cable company. beat up bad.
g. Technology ( 29% of portfolio) – killing performance, if internet or broadband or technology start making money, this is it. we have lots of risk with names like xyz, def, and other co’s, that are burning cash, but have enough for another year or 3. Then we have more established yet troubled ,like Lucent. Unnamed company is my favorite right now, merely because of financial strength and price. Remember, in 99 – 01, we were criticized for not owning technology. I am fairly fluent in the technology world, especially in optical networking.
h. Utilities ( 16% of portfolio) – not much to say. run up has been too fast, and i would love for a 50% retrenchment here.