1. How Do I Keep Track of 300+ Securities: A reader sent me an email asking me how do I keep track of 300+ securities. I organize what I own by creating two portfolios at Yahoo Finance (200 securities for a portfolio is the max). I have subscribed to Yahoo's MarketTracker service which gives me real time quotes on my holdings. More importantly, the portfolios that I have created at Yahoo aggregate most of the news about the stocks. If there is anything material, I will read it. Most of my time is spent researching securities that I do not own and reading news that provides me with my macro views. For securities that I do not own, I have created several portfolios divided into categories, such as preferred stocks and exchange traded bonds, small cap stocks, closed end funds, large cap dividend paying blue chips, and so on. I am constantly adding to, and subtracting from those lists. It helps to be an investor with over 40 years of information lodged in my few remaining brain cells. I have sort of an institutional knowledge that spans decades about a large number of companies. And I have the time to focus on all of the above since I am mostly retired.
2. Another Email Question - Why Own So Many: Almost everything that I own pays either a dividend or interest. Part of my investing strategy has been to build up a large diversified portfolio that throws off cash, constantly, week after week, which I can then use to invest wherever I see an opportunity. The Vix Asset Allocation Model that I am using as a guide for my stock allocation permits only the use of cash flow to buy common stock at the present time, a restriction which has occasionally been violated.
Every individual investor has advantages over a manager of a mutual fund. It is really just a question whether you want to make the effort, and have the time to take advantage of those opportunities. I have no Morningstar style boxes governing what I can buy. I view that kind of restraint as an unnatural interference with profit making opportunities. I can go anywhere in the world, and buy anything capable of being bought and sold, whenever I choose to do so. I can hold a security for thirty years or buy and sell it on the same day. I answer to no one, an extremely important advantage in my view.
Another advantage is that I can acquire a significant position for me in thinly traded issues like Trust Certificates without any difficulty. I can go into every nook and cranny and esoteric niche looking for bizarre and irrational mispricings of securities.
I like diversity because it gives me a strong comfort feeling, knowing that any number of securities could literally go to zero without causing serious damage. What I give up by owning so many is the occasional large gains which would come from owning a concentrated portfolio of my best ideas, everything in 10 securities for example, which would be great if I was always right which of course is something that never happens in the real world. I could have put my entire net worth in CB Richard Ellis at $2.39 a few weeks ago, and call it quits by now. Or, if it had not done so well, then I might be sleeping tonight under some bridge. Better to be cautious rather than sorry.
Admittedly my level of diversity is extreme but I am comfortable managing it.
3. Dividends and Interest News: I use closed end investment companies as one vehicle to generate income. Two of those funds which I own, IRR ING Risk Managed Natural Resources Fund - Overviewand IAE ING Asia Pacific High Dividend Equity Income Fund - Overview , declared their quarterly distributions. Yah Fin The sponsor for both of these funds is the Dutch financial firm ING. Closed-End Funds I own those closed end funds in both my retirement accounts and my taxable accounts. Within the past few months, I changed from reinvesting my dividends into buying additional shares to payments in cash.
4. VIX AT 25.93: This is starting to look better to me. If we can continue to meander at or around the 25 level, I may let loose of some of my cash. I am almost ready to add a few stock positions.
No comments:
Post a Comment