Wednesday, August 31, 2011

WFG Top Stock Picks in "Good Company"

The primary time of year for my/our robust stock and portfolio analysis is November and December.  This time period allows for a full review and appraisal of all current holdings and consideration of potential changes as we enter a new calendar year.  We, of course, evaluate all portfolios and holdings throughout the year, but desire to give each year's top picks time to run, unless new information comes to light that provides a cause for a making a sale or adding a new position that we believe meets our  ConVal® security selection criteria.

The table below reflects what Morningstar calls the top picks at any given time of their "Ultimate Stock-Pickers."
It is very interesting to see that of the 70 stocks WFG currently owns via our ConVal® process, all of the stocks on the list above are owned by WFG, except Wells Fargo.  These stocks were either already owned in 2010 or purchased in January of 2011.  Of greater note is that WFG identified many of these stocks as top picks earlier than the M-Star "Ultimate Pickers" did.

Investing Lessons
1. Bigger is not always better
2. WFG's ConVal® process is a winner

Friday, August 26, 2011

It Was Time to Hedge Our Gold Position

With Gold continuing its parabolic ascent, we made the decision this week to hedge 50% of our exposure to Gold ETFs owned in our no load mutual fund.  We still believe the secular bull trend for the yellow metal remains intact but Gold is long overdue for a shorter term price correction downward.  Silver experienced such a correction several months back.

Investing Lesson
It's never a bad idea to take some chips off the table and protect your profits when any particular investment has run very far, very fast.  Knowing when to do this and how to do this is what separates a "good" professional money manager (hard to find)  from the self-directed investor, who more often than not will do the exact opposite; buy high and sell low!

Monday, August 01, 2011

You Know The U.S. Government Is Screwed Up When ............

Who's ready for iAmerica?

As reported by the BBC and backed up by the company's financials records, the software company Apple has more cash on hand than the United States federal government.

Apple's quarterly financial report shows that the company responsible for the iPad, iPod and the iPhone now has $76.4 billion in reserve cash w
hile the U.S. Treasury Department is sitting on just $73.7 billion.

In my opinion, the feds could probably learn a thing or two from Apple's success. Congress remains embroiled in a debate over spending and whether the federal government, which currently owes trillions in debt, should be allowed to borrow even more. International credit rating agencies have threatened to downgrade the national debt for the first time in the nation's history if Washington doesn't come up with a solution to lift the $14.3 trillion debt ceiling while implementing a concrete plan to get the nation's "financial house" in order.

Meanwhile, Apple's financial report shows that the company's profits, even through the last recession, are booming!

Investing Lesson
When all is said in done, when it comes to politicians, more is said than done.

My Opinion
It still pays to be very conservative at this point in time. The numbers on the U.S. economy came in Friday and were unfavorable. There is still at least a 50% chance that before this market cycle is over, the economy may slip back into another recession, with the market taking a final 30-50% swan dive downward.  If and when that happens, it will then be time to load up the truck and invest aggressively.  Patience, is a virtue, but difficult for many to maintain.  I remain resolutely patient. 

PS: Any agreement on a balanced budget amendment will not be worth the paper it is written on, but will be hyped as a great victory, with no details and the teeth of someone with their dentures sitting in Polident.