LMP Portfolio

It has been a long time since an update in our portfolio.

We haven't added a single security in the past 6 months and in a way I am happy we didn't since a lot of our shares have gained a lot since then rising more than the index itself.

I'm not happy with one thing though, the fact that we haven't made money for the past 5 months or so due to the fact that we are hedged. I assume the responsibility of that but unfortunately I know how it is watching the markets run up and we are hedged without making any money (or very little) on the upside. Indeed our portfolio filter did have us exiting our shorts around the 1120 area (at a loss) but since I wasn't able to post it here I am counting as if the short is still on.

If we hadn't, we would be up around 75% since inception instead of the current 53'ish %. We still managed to turn out a eek 5% increase in the portfolio but we always want to achieve more here at myBullmarket.

Even with all these intrinsics and episodes around the portfolio we are still beating the S&P for the year by a reasonable margin (although we should've been demolishing it). YTD we are up +13% while S&P is up +8.9% all this by being hedged most of the year and only invested in 75% since we still do have 25% in cash.

Along the way some of our stocks have been through some changes, so if you're following us you probably noticed that DECKERS for example, one of our best performers underwent on a 3:1 stock split and Aeropostale on a 3:2 stock split as well, so all of you have seen your shares increased. That is why in the portfolio table the entry values are now different from our original entries in order to take into account those adjustments from stock splits and also dividends.

So here is how our portfolio is currently invested:

At the end of the year we will indeed need to do some rebalancing, since some of our allocations are now going out of our threshold values.

Stick with us because there is still a lot more to come.

LMP End of Week update

Though we didn't make money today, we still managed to outperform the market by a mere +0.06%.

I'm happy with the performance so far, and I hope the overlay "hedging" strategy helps you sleep better at night. Let me know, after the fact, since we've had the last couple months have been down months, if the strategy benefited you at any level. Let me know your feedback.

So far, we've been able to maintain the profits, while the market has been going down.

Another short stat for the portfolio is:

- Market return Year-to-Date: -7.35%

- LMP return Year-to-Date: +7.8%

In my opinion for such a low transaction portfolio this is a huge over performance, we are not trading, our stocks have been held around 12-13 months ! I'm happy with this...

I wish big returns for all of us in the coming years...

And to all Americans out there reading myBullmarket, I wish you a happy 4th of July !!

LMP

We sold the shares today at the open, as it was issued on Twitter and on the chat room. So far we haven't made any move regarding purchases, and I will wait it out a bit to see if the current weakness develops into more selling of the broad market or not.

Regardless of the decline, I'm happy to say that the portfolio managed to squeeze a little gain and to increase by a greater number the margin we had to the market. While last week it stood around +52.5%, today it stands at +57%. Of course, this is both a consequence of being short the broad market and at the same time our stocks as a whole are outperforming.

I will keep a close eye on the market this week and try to see, if we should get in the new equities or not.

Enjoy the good weather !!

LMP update

Tomorrow at the end of the day will announce the new stocks that should replace the old ones in our portfolio. So keep an eye on the site tomorrow...

Update on LMP

After the sell off last week, we were able to buy the stocks we have wanted to add to our portfolio for quite sometime.

Unfortunately, we weren't able to take advantage of the -10% intraday move. That would have been a great move, but since this is an end of day portfolio, where our purchases are made at open prices, buying the shares during an intraday move is dishonest since it's not replicable and I could easily say I bought at the bottom.

This way, buying at open, is not only repplicable but also the most transparent way in my opinion to display the results, other than through an audited track record.

Anyway's, it seems that our wait paid of, since before we were beating the S&P500 by 44% points, and today we are beating the S&P by 51.22% points, which translates to an increase of 7.22% on our overperformance.

Let's hope the portfolio keeps overperforming in the future.

So far this is how the portfolio stands:

Finally...!

Today's move was crazy. Although a very good day for me... probably one of the best ever in the trading department.

With today's move I was so eager I could buy the stocks to LMP during intraday, but that would be to break the rules for soomeone that follows us, since not everyone is able to follow the markets intraday. LMP stands for transparency of our purchases, so ALL purchases are made at the open price, so the portfolio can be easily replicated by anyone...

So tomorrow we will be buying at the open the following stocks:

- WTW
- APOL
- FWLT
- SOLR
- SOHU

All in all we're gonna have a bit of discount compared to March. Although my belief is that this selling cycle is not over yet, and it may as well be a new longer term downtrend... but let's not think of that right now.


Have a look at this thing:


Good luck everyone.

Portfolio update

As announced in the previous post, the shares bought a year ago were sold at yesterday's close, with exception to Coach which will still be part of the portfolio.

So we have at disposal $28,600 in order to spread around 5 new stocks which were announced once again in the last post. These new 5 stocks will be bought after I see a meaningful correction which should occur shortly due to the fact we're walking in some extreme sentiment measures, so I'd at least expect a minor correction.

There is of course the risk of missing the boat on a new run off of the markets.

We'll see...

So far the portfolio stands like this:

Technical measures still favor a correction around these levels.

2010 resolutions and LMT update

Hello everyone. Happy new year :-D

I hope everyone spent a good time during these holidays. 2010 is now in front of us, and it should be a tough year economically speaking in my opinion. During this year we'll have a lot of possible catalysts to reignite what we experienced in 2008. What happened in 2008 was mostly mainstreamed in the stock markets and the sub-prime factor, this year though the catalysts will come from the mother of all markets: sovereign debt. Greece, is in deep trouble, and no matter what the IMF says or their prime minister they soon will have to either default on their debt or to get intervention from the exterior, which in my opinion is a matter of months in order to happen. Portugal and Ireland would soon follow Greece's footsteps, unfortunately for me because I live in this beautiful country but is managed in such a bad way... sooner or later we will also have to recur to foreign help.

For the USD I think it will be a rosy year indeed. What I see from USD right now is a lot of strength signals and it should lead the index towards the 90-95 level. At least it's what I expect.

Now regarding the Low Maintenance Portfolio. I know we're a few days behind, since I didn't make any new posts the last 9 days. The change date should've been the 26th, but oh well, just a few days behind won't make a single dent on our expectations.

So for tomorrow we're selling from the Portfolio the following stocks:

- Terra Industries
- Valco Energy
- Garmin
- Time Warner (this was our star stock for the past year with 200+% in profits)
- Marvel (which was sold when Disney made the announcement)

The capital coming from the sales of these stocks will be allocated into 5-6 new stocks equally. If you're new and have no stocks or have only the stocks from past September, then 25% of your initial capital should be allocated equally between 5-6 stocks.

So the new stocks will be:

- Cherokee (CHKE)

- Aeropostale Inc (ARO) - (can't believe how I didn't remember this one before... I bought a lot of clothes in this store when I was in the States...although in EW terms and techically I don't like it, but hey this is a fundamental/value based strategy not TA)

- FluorCorp (FLR)

- Graham Corp (GHM)

- Sturm, Ruger & Co. Inc. (RGR)

...and finally:

- Gamestop. This one already is in our portfolio and once again made it through our screening. Since I believe in the company, and since it still shows up as one of the best companies around, then we can save ourselves some transaction costs and keep this one in the portfolio.

So in summary, we have 3 small caps and 3 medium caps (one that already was in our portfolio).

Let's hope that all of these turn out like Time Warner.

Note: Prices of sale and purchase taken into consideration will be tomorrow's OPENING price.

EDIT:

There is a problem with this post. I made a mistake to name Graham Corp. (GHM) since it was already in our portfolio from the previous quarter.  Therefore we're still missing one stock. This stock is Energy Recovery Inc (ERII).

I will consider tomorrow's opening price for this pick, so the results provided on this site could be easily attainable for anyone tracking it.

Once again I apologize for the mistake 

Today's post is a bit different and what I've been working on lately.

I've extensively been backtesting the LMT Portfolio premises. I have composed 100 random portfolios in which the stocks composing them all would fit within LMT parameters. The data totally beat the S&P. Both buy and hold for S&P, as well as passive investing with S&P (buy and hold + adding 10% of equity into the market every year).

Both got crushed from LMT. All 5 year rolling periods are positive for LMT unlike S&P.

Here are both charts worth taking a look in my opinion. One might say that the portfolio took advantage of the roaring 90's. True, but even so, starting a portfolio under the same characteristics at 2000 top, while S&P managed to pretty much be flat, LMT would manage 16% per year and that's taking into consideration the bear market.

This first chart does not add 10% of new cash into S&P Buy and Hold. But they don't differ much... the dash green line is what ~I consider an excellent long term goal.

This pretty much sums to a 20-to-1 harsh beating of LMTP versus the market. Should we take a large margin of safety, I would say a 5-to-1 would still be excellent.

Don't forget to check then, December 26th some of our stocks will be replaced by newer ones.

I'm gonna need my sleep now.

BTW, last night I experienced my first earthquake ... a 6.1 Richter scale quake. It sure was daunting...

As previously discussed, the positions were opened at the opening price... they are the following:

- CBST $20.85
- GHM $14.44
- DECK $83.89
- CEU $5.50
- PPD $52.20
- MHP $24.32
- KBR $23.00

Let's make some money... (I hope)

The stocks bought a year ago are now sold. Now it's time to look for new companies... In the portfolio, there are 30,501 USD available to put into new shares. So we'll aim for 7 stocks equally distributed, which will make a portfolio of 28 in the end.

The new companies being bought at the open tomorrow, are as follow:

- CBST
- GHM
- DECK
- CEU
- PPD
- MHP
- KBR

Remember this strategy is based on quartiles and deciles, meaning that running a screener these are the best 5% stocks of the entire NYSE sample, so in theory they should outperform their peers, meaning lose less if the markets as a general falls and gain more as the market rises. I tried to maintain a 50/50 approach of small/mid caps vs. big cap companies. I also made sure I didn't concentrate in the same industry. Ok that's it. 15 minutes "wasted" to choose these companies. Now we have to wait until December 26th ;)

I'm very tired today so I'm going to rest in my coffin as the vampire I am. I do need my beauty sleep sometimes.

Cheers,

Sal

LMT

Since the 26th fell on a weekend, we will sell the shares today at closing price. The new companies that will be part of the portfolio will be announced today, and will be bought at tomorrow's open price

LMT Portfolio Update

As the date approaches in order for us to decide on new allocations for the portfolio in order to substitute the shares bought during September 2008, see the portfolio on your right side - lateral bar of the blog --->

Since the last update it really sky rocketed from a 24% return in end of August and now with an almost 37% return. For a low maintenance portfolio such as this, during the middle of one of the biggest financial turmoil in the stock market history I think it's a pretty good return. And we're beating the S&P by a 46% points margin...

Since the inception portfolio is up +37% vs. S&P - 10%