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August, 2013: 4 7 8 9 14 24 28
Disclaimer - IMPORTANT - Read this first!
Investor's Journal is a diary focused strictly on investments and personal finance issues, primarily from a contrarian and retiree point of view. Follow along with an average guy's failures and successes as he learns, by trial and error, the fine art of value investing.


8/4/13-Since the last entry, there have been no sales or sell signals among assets/portfolios followed here.

At their recent prices, I find the following assets attractive as Low Price to Book Value stocks: ACAS; AEG; AOSL; CNTY; DSX; HNR; IAG; MSN; SSRI and VOXX.

I believe all of them currently meet Ben Graham safety and value criteria as bargain assets.

Consistent with my note of caution in the 7/17/13 entry, I am or shall be gradually selling some shares of assets in our nest egg which have price to book values of 1.1 or above.

At the same time, I have been and shall continue to buy shares from among the above cited companies. The intent of these combined actions is to raise total book value to our end-of-year target of $885,300 (and assure total dividends of $17,706 or above) while also lowering the equity portion of our overall net asset value to 67% or less of liquid assets.

Rather than citing a specific stock at this time, I simply wish to clarify that I am buying initially and/or adding from time to time to existing holdings in each of the ten securities noted above.

As market and individual asset circumstances change, I shall also be on the lookout for additional Dividend Value and Low Price to Book Value stocks to mention here in subsequent entries.


8/7/13-Since the last entry, I sold off (at the opening yesterday) some shares of COP from our Dividend Value portfolio. In so doing, we took a modest loss on this investment in one of our taxable accounts, the intent being to reduce overall equity exposure (and so risk of loss in a market correction), lower average nest egg price to book value, and use losses to help offset gains in the account from earlier this year.

The sold COP shares had had an average hold since purchase of 1.62 years and an average loss (counting commissions but not the dividends paid in the intervening period) of 6.76%. Some shares of COP are retained in the Dividend Value portfolio. While I am lowering our equity investment amount over the next few weeks, I may not always mention assets which are being redeemed, particularly if we are keeping some shares of the companies in question. The quarterly reviews will include an update indicating which securties are still in each portfolio followed here. As usual, they will also provide up-to-date closed plus open position portfolio performance results.

To my list of low price to book candidates cited in the last entry, I am adding one more: SLT.

My new featured Low Price to Book Value equity is Sterlite Industries, Ltd. (SLT) (recent price $4.93). SLT meets Benjamin Graham's bargain stock value and safety criteria. I shall be adding shares in this company to our nest egg in trading this afternoon, 8/7.


8/8/13-Since the last entry, there have been no sales or sell signals among assets/portfolios followed here.

To my list of low price to book candidate tickers cited in the last couple entries, I am adding another: COCO.

My new featured Low Price to Book Value equity is Corinthian Colleges, Inc. (COCO) (recent price $2.46). COCO meets Benjamin Graham's bargain stock value and safety criteria. I shall be adding shares in this company to our nest egg in trading early this morning, 8/8.


8/9/13-Since the last entry, there have been no sales or sell signals among assets/portfolios followed here.

To the low price to book value assets cited previously this month, I am adding another: NWLI.

My new featured Low Price to Book Value equity is National Western Life Insurance Company (NWLI) (recent price $214.73). NWLI meets Benjamin Graham's bargain stock value and safety criteria. In trading early this morning, I shall be adding shares in this company to our nest egg.

Though it had been recommended previously (in April, 2012), I am also interested at recent prices in Kansas City Life Insurance Company (KCLI) ($42.11). It again meets Benjamin Graham's bargain stock value and safety criteria. Though its dividend payout ratio is a little higher than I prefer, at 0.53 (vs. 0.50), I shall as well be adding shares in this company to our nest egg in trading early this morning, 8/9.


8/14/13-Following the last entry, I sold off (this morning) SSL from our Dividend Value portfolio. SSL had been bought on 11/19/12, and since then, besides its dividends, had provided a net performance of 12.04%. As of today, its yield was 2.20%. I mainly redeemed it in order to further raise cash, in case of a market correction.

I presently find the following assets attractive as Dividend Value stocks: POT; PZE; SIMO; STO; and USMO. None are without significant risk in the short-term, but I believe a portfolio of such dividend value equities will over time provide a good total return.

From among them I are choosing Petrobas Argentina, SA (PZE) (recent price $4.48) as our current dividend value equity to feature. It meets Ben Graham bargain stock criteria and will be added to our nest egg at its market price in early trading tomorrow morning, 8/15/13.

PZE has a dividend of 3.40% and a price to book value of 0.39. The P/Bk for SSL is 2.02. Thus a smaller investment in PZE achieves the same addition to our overall equity book value and dividend income as SSL had.


8/24/13-Noting that some of this site's readers have been getting better returns on our recommendations of late than I have, I decided to give more weight to the price to book value ratio in determining when to sell. Till now my criteria for awhile have been simply that the price is up 50% or above from my cost basis at time of sale and/or there is some profit and the stock has been held for two years or more. I shall be experimenting but am considering adding or substituting a third potential reason to sell, that the price to book value is now 1 or above. (When I do not think the market is at least a little overextended, I might increase that aspect of the criterion to a price to book value of 1.2 or above.)

Also plan to test out some stop-loss and/or stop-limit orders, as one of the readers suggested, another means of possibly getting greater bang from my low price to book value buck. My first attempt at this did not go so well, though, perhaps because I had set the stop price or limit price wrong. In that instance, with URS, I wound up getting sold out of my position at about 3-4% lower than if I had simply sold the asset when I noticed it had exceeded a 50% increase in price since purchase.

My look at all the low price to book value portfolio stocks from the standpoint of a possible sell when assets were at P/Bk 1.0 or higher was initially more fruitful, as I discovered four which had already achieved P/Bk above 1. Though only one was up 50% or more, I was comfortable redeeming their shares given the lower than ideal reserves I currently have, seasonal factors, and that the market has already had a good rise this year. It could still extend its bullishness, but, if I had to guess, the risk seems more on the downside than in missing significant upside potential.

Due to some of these assets having only been held a few weeks or months, the effect of the several sales was to increase our overall closed position annualized performance nicely.

The following, then, are the five stocks sold from the low price to book value portfolio since the last entry:

1. Our Low Price to Book Value (Low P/Bk) portfolio stock, URS, bought on 8/16/11, was sold on 8/19/13 via a stop-limit order for a net gain (after commissions but not counting any dividends) of 49.88%. URS has been deleted from our open positions record for Low P/Bk assets, and its closed position info for 8/16/11 through 8/19/13 has been added to our portfolio spreadsheet for low price to book value redemptions and mergers.

2. Our Low Price to Book Value (Low P/Bk) portfolio stock, ABX, bought on 7/15/13, was sold on 8/23/13 for a net gain (after commissions but not counting any dividends) of 28.83%. ABX has been deleted from our open positions record for Low P/Bk assets, and its closed position info for 7/15/13 through 8/23/13 has been added to our portfolio spreadsheet for low price to book value redemptions and mergers.

3. Our Low Price to Book Value (Low P/Bk) portfolio stock, AMED, bought on 9/10/11, was sold on 8/23/13 for a net gain (after commissions but not counting any dividends) of 7.91%. AMED has been deleted from our open positions record for Low P/Bk assets, and its closed position info for 9/10/11 through 8/23/13 has been added to our portfolio spreadsheet for low price to book value redemptions and mergers.

4. Our Low Price to Book Value (Low P/Bk) portfolio stock, CVR, bought on 11/3/12, was sold on 8/23/13 for a net gain (after commissions but not counting any dividends) of 41.90%. CVR has been deleted from our open positions record for Low P/Bk assets, and its closed position info for 11/3/12 through 8/23/13 has been added to our portfolio spreadsheet for low price to book value redemptions and mergers.

5. Our Low Price to Book Value (Low P/Bk) portfolio stock, CNTY, bought on 6/1/13, was sold on 8/23/13 for a net gain (after commissions but not counting any dividends) of 53.47%. CNTY has been deleted from our open positions record for Low P/Bk assets, and its closed position info for 6/1/13 through 8/23/13 has been added to our portfolio spreadsheet for low price to book value redemptions and mergers.

Roughly speaking, book value and net asset value are the same. So, since I have been having difficulty lately finding plenty of low price to book stocks that meet our criteria, I thought I would look into low price to net asset value (NAV) closed-end funds. I found three to add to a couple low P/Bk stocks for the current top five book value assets.

Accordingly, alphabetically, though in no particular order of merit, my current top-five low price to book value equities are: BIF; BTF; ELP; FOFI; and IAG.

My new featured Low Price to Book Value security is Boulder Growth and Income Fund, Inc. (BIF) (recent price $7.61). BIF meets Benjamin Graham's bargain stock value and safety criteria.

Boulder Growth and Income Fund, Inc. will be added to our nest egg at its market price in early morning trading on Monday, 8/26/13.

As BIF tends to hold about a 25-30% allocation in Berkshire Hathaway shares, yet is available at a greater than 20% discount to NAV, investors who wish to own BRK/A or BRK/B shares can do so more cheaply via Boulder Growth and Income Fund.

One reason closed-end funds (CEFs) can have a discount to their NAV, however, is that CEFs can carry significant unrealized capital gains, for which there may be a tax liability to the shareholder once the profits are realized and distributed. As a result, investors may prefer to invest in these investment instruments only via tax-deferred accounts.

I presently find the following assets attractive as Dividend Value stocks: ESV; GLNG; MANT; RFIL; and TOT.

From among them I are choosing Ensco, PLC (ESV) (recent price $57.33) as our current dividend value equity to feature. It meets Ben Graham bargain stock criteria and will be added to our nest egg at its market price in early trading Monday morning, 8/26/13.


8/28/13-Since the last entry, there have been no sales or sell signals among stocks/portfolios followed here.

Alphabetically, though in no particular order of merit, my current top-five low price to book value stocks are: AEG; BIF; NTT; PFIN; and UMC.

My new featured Low Price to Book Value equity is Nippon Telegraph and Telephone Company (NTT) (recent price $25.80). NTT meets Benjamin Graham's bargain stock value and safety criteria.

Nippon Telegraph and Telephone Company will be added to our nest egg at its market price in early morning trading today, 8/28/13.


Disclaimer and Disclosure Statement
Much as I'd love it to be otherwise, I receive no payment of any kind for disseminating investment information unless, by some fluke, millions of folks, on the strength of these entries, start buying shares of stock I own, a possibility only slightly less likely than our being destroyed by a large meteorite. Do not follow any suggestions made in Investor's Journal as if I were a professional.

Neither I nor Investor's Journal will be responsible for losses by anyone who obtained ideas from this site.

This diary is intended for personal interest and general information only. You are advised to do your own research (as well as to consult highly compensated professionals) before spending money on anything.

I know of no reason anyone should take my financial musings seriously. At best I am a dedicated amateur providing a bit of investment-related insight and entertainment, at worst an amusing diversion.

My wife, Fran, and I may at times own shares of some of the assets mentioned here. But neither of us receive any benefit from reference to them, unless you count the mutual misery when we get it wrong, or the opportunity to gloat when we get it right.

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