Investometer 2009 Year End
2009 was quite a year. I’m looking forward to future buying opportunities as good as that, though I imagine there’ll only be a couple of those in the rest of my investing life. As my investometer shows I acted opposite to my plan for the year. Weird that. Particularly when it is the second year in a row I’ve failed to follow through with what transpired to be an excellent plan. I would resolve to follow my plan for 2010 to the tee, that is if I had a plan. For the first time in a few years my crystal ball is cloudy and hence I have no grand plan, beyond my usual game plan.
- Trade fairly to overvalued stocks for undervalued ones with multiple catalysts for profit.
- Be a reed in the wind, that is let the market valuations and historical precedence influence my direction.
Here’s how I hope the year pans out. The worldwide economic recovery continues, interest rates head higher, inflation contained due to wage control and over capacity in the world’s factories and share markets continue to head higher into overvalued territory. I will continue to sell into any rally and my catch phrase for the year is Sell in May and go away.
As the above charts highlight I increased my exposure in my US accounts during December. The purchases were all in my unnamed stock pick for 2010. I’m starting to feel like a stock picker, it’s funny what a little success in something does to you.
Two nights ago I sold Feb $85 calls on my MMM position. I know I said I was going to let it run as part of my attempt to fold momentum in, but a combined possible $87 was simply too attractive to me. I view MMM as slightly overvalued at current levels.
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wow, resources have put in a pretty big effort in the last week. Sold out of RIO today. It’s gone up 10% just in the last week. In fact the market is starting to look fully priced to me. I still have my super in 100% aussie equities but have reduced my discretionary investment to just WOW and TLS at the moment. Maybe I’ll pick up some CSL if it gets cheaper.
You’re right S, and Rio is hitting 52 week highs today. It seems investors think we’re in the clear and the likes of Bill Gross and James Chanos are wrong. I’d be very careful taking opposing positions to those two guys. If you haven’t read Gross’ January investment outlook then I encourage you to do so. I loved his comments on the problems with democracy. As far as outlook goes, perhaps I need to bring my sell in May and go away forward two months, sell in March and …what’s a good rhyme for that?
“Additionally, if exit strategies proceed as planned, all U.S. and U.K. asset markets may suffer from the absence of the near $2 trillion of government checks written in 2009. It seems no coincidence that stocks, high yield bonds, and other risk assets have thrived since early March, just as this “juice” was being squeezed into financial markets.”
Hi Dean, the exit strategies will have to occur at some stage but it seems like they are in the sweet spot with quatitative easing in the US. The Fed seems to have control of the short end and the long end and while they’re at it the middle end (of the yield curve). They have in effect been buying more than half of the treasuries issued ! It is just amazing how the new supply of treasuries hasn’t dented the yield at all.
I have no idea how long they can do this for and whether they can pull it off. Amazing. I reckon if market forces were at work, treasury yields in the US would be higher and I suppose so does Bill Gross. He’s been selling but the Fed has been buying. This means the USD may go to artificially low levels and be prone to a big snap back. One might assume this is well known and factored into currencies, but maybe not. Why go against the momentum when you can wait until tomorrow or the day after and get better value?
I think I’ll get some Australian stocks with USD exposure like CSL when AUD gets to parity. CSL is starting to look cheap but may get cheaper. sub $30 would be a nice price.
Hi S
In case you’re wondering why your comments always await approval, it’s because the software uses email address to match people and automatically approve them once they’ve been approved. I don’t mind either way, just letting you know. If you do want to add an email then I don’t even care if it is real or not as I never use them for anything.
On CSL. I haven’t looked at them since my last review. I agree that is a good way to get exposure to the falling AUD without the risk or timing problems associated with other strategies. One concern I have with CSL is their employee turnover. They are forever advertising for positions and from what I hear from a pharma employment agent I know is that a lot of their people have been sending in their resumes over the last year or so. While that may not effect their vampirish oligopoly, it always concerns me when employees aren’t happy.
I see no point in buying companies like CSL unless you get them for an absolute bargain. I will look again if they drop under $30. Got any other companies you’re looking at?
Hi Dean, thanks for the tip about the email. I’m a lazy sod and tend to fill out the minimum.
Currently, there aren’t any other companies I’m looking at. I’m fresh out of ideas and think I will take a break from following investing except perhaps for half an hour a weekend until something interesting happens. Currently I have an index market weighting in Super and a position in TLS and WOW.
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