See the end of the post for the current make up of my portfolio and the last four weeks of trades.
In a previous post about Walker & Dunlop I described the consequence of being on vacation while the company announced poor results, which was that I was not able to take advantage of a clear selling situation. The same was the case for Dex Media.
In the past I used the term “good enough investing” to describe what I’m trying to do with my portfolio. I work a full time job, have a life and need a break now and then, and all that means I just can’t be on top of everything. I try my best but I have found it necessary to employ techniques to mitigate this. In particular, I sell stocks when things aren’t working out.
While I’ve had my share of winners over the past month and a half (AIQ, NVS, NCT, NRF, IQNT to name a few), I’ve also had my share of losers (NKO, EXE, VTNC, and the above mentioned duo) with the result being that my portfolio has done not much of anything. While I remain hopeful that both Niko Resources and Extendicare eventually pan out, the fact is that thus far they haven’t. Read more
See the end of the post for Portfolio Composition and weekly trades.
A week of Significant Gains from RDN, MTG, MBIA
The last seven days have been extremely good ones for my portfolio. This has been primarily due to the price appreciation of MGIC, Radian Group and MBIA. As regards MGIC and Radian, I have written so much about these two names, done so much work trying to understand the business (and trying to understand how other people were trying to understand the business), that it is quite rewarding to see it play out the way that it has.
It is amazing to me that MGIC has more than doubled (from a $2.40 low to a $6.10 high) during 5 days when the only notable disclosure was that the company had the ability to raise capital. Someone with an interest in market psychology should really write a piece on MGIC – you could call it the Existential Security.
I reduced my position in both Radian and MGIC by a little more than half during the early part of this week. My sales of MGIC occurred around $5.20 while those with Radian were at a little over $10. I don’t have plans on selling any more of either.
I sold the positions down because they were getting very large (particularly in the case of MGIC) and because my thesis, that these companies would be able to survive, has now played out. What is going to drive the stocks going forward is the long-term potential of the mortgage insurance business and how well each company can capitalize on it. Read more
Short Lived Niko Experience
I wrote about a new position in Niko in a short summary 3 weeks ago. A couple weeks later I sold the stock. What can I say – its part of my process. A lot of times I only get clarity about a stock once I own it. I buy a position, sit on it for a few days or a week, and do some more background and some more thinking on the name. With that my opinion becomes more clear.
The discomfort I developed with Niko was partially the result of another batch of less than stellar drilling results, but mostly the result of my conclusion that this isn’t the right time yet. The driver of the share price will be the settlement of a new gas price contract in India. I don’t think this is likely to occur until the existing contract expires, which is not until next year. In the mean time Niko will continue to experience production declines in India, and they are open to negative news flow on drilling. Read more