February 1, 2015

Whoa intraday volatility!  As of January 31, the monthly performance of the S&P 500 index was -3.1%.  The portfolio’s performance was -2.18%, for an Alpha rating of 0.923 so far for 2015.  Not bad at all…although pretty much the same place I was 9 days into January!  The reason for that is that I’m getting weighed down by FOX, AIG, & BABA… all losing trades right now, but trades that I think will turn around and move that Alpha number up a few ticks.

I closed out of Chipotle with a nice little gain.  I just don’t like the lines that I see, they aren’t the eye popping lines I’ve seen in the past.  Although I think the portion sizes have gone down.  That said, I’m just not sure about it, so I sold.  Same with Panera.

I had a small position in Ali Baba, which I was caught on the wrong side of as they missed their numbers and tumbled about 10%.  I bought a few more shares on the drop.  I still think its an excellent growth company, but I’m cautious it might follow a Facebook like trajectory… one that sinks like a lead ballon after the IPO.

Speaking of Facebook, I’m adding to the position whenever I get a chance.  They are executing wonderfully and have a unique product that just can’t be beat right now.

I bought Energy at the bottom, but I think I sold it a bit too soon.  I think oil prices will come down again, but now is the time to start building long term positions in energy stocks.  I converted my XLE shares into the less volitile AMLP shares, and I’m waiting for the pullback to re-enter for the longer term.

I cut my Apple position because the expectations seemed too high… but damn… Apple, wow! Over 70 billion in revenue and 16 billion in profits in one quarter! Wow.  Unfortunately, I’m stuck at the 20 share position I hold, and will hold that until there’s a buying opportunity to rebuild my position.

So that takes me to AIG… which technically was at such an oversold point I bought.  Then it went down, so I put on a put spread.  It would have broken multi-year lows and I just don’t see them doing it.  I also didn’t see a real reason why it was so beat up.  I have some call positions as well, and I’m holding this as a trade.  I think it’ll work well and will roll over those options if they expire worthless.  The PEG is below 1, so fundamentally, the stock is strong as well.

I’m in the same situation with FOX, although that one I’d be pretty happy if I was able to exit near net neutral of the S&P.  The streaming services are taking share and FOX still has room to fall, even though its fallen so far so fast.  We’ll see, but I’m cautious here.  I’m hoping the options will at least break even, worst case scenario.

I established a small position in Restoration Hardware, because the metrics looked really good. Plus the strong dollar should help them, so a great company with down prices and the tailwind of a strong dollar for its import based products… sure, worth a flyer at 1.5% of the portfolio.

I also went into United Rentals because they beat the numbers, but kept getting hit. The fundamentals are excellent and the stock looks so damn cheap with a forward P/E of 9.08.  I don’t see why this is so hurt, besides a fictional association with oil.  However, like I said before, oil should be starting to trend higher over the next year, so I like URI.  Although the technicals are starting to look real ugly…

Lastly, I bought the Germany & Japan index because the strong dollar in conjunction with those central banks printing money makes them attractive.  It also helps with diversification.  I also bought Kimberly Clark, a dividend aristocrat that just got crushed and is sitting at its 200 day moving average.  Sure, I’ll ride with KMB until they normalize.

Lastly, the trading activity statement: 01-31-15 – Statement