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November, 2012: 2 4 10 16 17
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. |
11/2/12-Since the last entry, there have been no assets sold or that meet our sell criteria among portfolios followed here.
My current top-five low price to book value stocks are: REGI; CVR; MANT; HDNG; and IMN. (Please note: these final 5 of my low price to book value candidates are now in order, highest to lowest, based on my assessment of their risk-adjusted values relative to their current prices and also taking into account the assumption that assets already recommended here have been added to the portfolio, so that there is a diversification advantage in the purchase of securities not previously owned.)
My new favorite from among them, then, is Renewable Energy Group, Inc. (REGI) (recent price $5.02). It meets Benjamin Graham's bargain stock safety and value criteria.
Renewable Energy Group, Inc. will be added to our nest egg at its market price in early trading on Monday, 11/5/12.
11/4/12-Since the last entry, there have been no assets sold or that meet our sell criteria among portfolios followed here.
In the past few days, I have been experimenting with new (to me) ways to screen for good low price to book value equities. These efforts have generated more candidates than usual, so this time I shall mention ten of my favorites. In general, though, after this I likely shall just refer to five securities in the journal entries pertaining to low price to book value stocks.
Thus my current top-ten low price to book value stocks are: XRTX; REGI; SCHN; QCCO; PLFE; CVR; CEP; ANAT; MSN; and IQNT. (Please note: these final 10 of my low price to book value candidates are now in order, highest to lowest, based on my assessment of their risk-adjusted values relative to their current prices.)
My new favorite from among them, then, is Xyratex, Ltd. (XRTX) (recent price $8.29). It meets Benjamin Graham's bargain stock safety and value criteria.
Xyratex, Ltd. will be added to our nest egg at its market price in early trading on Monday, 11/5/12. (Since I am currently raising our overall equity book value to achieve a year-end target, in these last weeks of 2012 I shall also gradually be purchasing shares of other mentioned low P/Bk assets, until that target has been assured.)
11/10/12-On 11/7/12, our Low Price to Book Value asset, ADUS, purchased on 10/3/11, was sold for a net gain of 49.32% (not counting any dividends). Info on ADUS's cost basis and performance from 10/3/11 through 11/7/12 has been added to the Low P/Bk closed positions spreadsheet, and ADUS has been deleted from the record of Low P/Bk open positions. Although ADUS had not achieved our net target appreciation of 50% or greater, I had placed its sell order when the market was above our target level. A quick drop in the averages on opening resulted, after commissions, in an executed order slightly below our preferred appreciation standard. ADUS actually remains a good value, in my opinion. However, significant uncertainty hanging over the markets prompts me to take profits more readily than usual.
My wife and I hold approximately 100 securities at a time. As a rule, we also keep a significant portion of our liquid portfolio in money market funds or short-term bond assets, anticipating that such reserves will come in handy when, at unpredictable intervals, stocks fall precipitously. We may then take advantage of excellent price to value equity bargains. She and I are not by any stretch investment geniuses.
Our average equities' total return has been sufficient, however, that, despite usually holding such fairly unproductive reserves, our overall net asset value has increased on average by a little over 10% annually. Having not begun stock or mutual fund investing until the mid-1980s (with $5000), having had average yearly gross earnings - between the two of us - of only around $37,500 (and much lower at the outset), roughly a quarter of which we invested each year, having retired, except for a little part-time income, over ten years ago, and having experienced the substantial equity declines of both the early 2000s and of the latter 2008 through March, 2009 period, our nest egg has still grown (knock on wood!) in 28 years from its humble origin to over $1 million.
Clearly, it does not require great intelligence to achieve this type outcome, only a degree of discipline, an effort to select assets of generally greater worth than is reflected in current market prices, and overall a tendency to sell when one's assets have become profitable (rather than when fearing a financial collapse and though one's equities have already declined in price below their cost bases).
From my comments above, it might appear I am confident and serene regarding financial management generally and a stock selection process specifically. Just in the last several days, however, my recently recommended asset, IQNT, has fallen roughly 25% from my purchase price. (There is no way to know if it may go on to lose much more or will bounce back and might provide a new investor with good profits.)
Though the paper loss (at least until I sell IQNT) is but a small fraction of our holdings, I am typically humbled by this development and find that, as a result of it - and as was true awhile ago, when several China-related stocks I had suggested soon thereafter fell badly - I am calling into question an ability to properly assess good stocks and their relative merits. Cooler heads, with better perspective, would probably counsel moderation both in complacence over our superior results at times and in self-flagellation when some of our highlighted securities nosedive.
After a bit of thought, though, I have decided the hazard of offering equity advice of any kind is such that I am foolish to assert a particular order of risk-adjusted value. Likely it would be best simply to indicate that a set of stocks, taken as a whole, appear to have more worth than indicated in their current average prices and to single some of them out not as offering special advantage but merely as a way of alternately focusing on each in a group that collectively have a better than average chance of finer performance. The wording of the following paragraph is adjusted accordingly.
Alphabetical, though in no particular order of merit, my current top-five low price to book value stocks are: REGI; ROCK; RCKY; XRTX; and ZOLT.
My new featured equity from among them is Zoltek Companies, Inc. (ZOLT) (recent price $6.51). It meets Benjamin Graham's bargain stock safety and value criteria.
Zoltek Companies, Inc. will be added to our nest egg at its market price in early trading on Monday, 11/12/12.
We join with others in our nation's honoring of their service on Veterans' Day, 11/11/12.
11/16/12-On 11/13/12, our Low Price to Book Value asset, GILT, purchased on 9/14/11, was sold for a net gain of 51.28% (not counting any dividends). Info on GILT's cost basis and performance from 9/14/11 through 11/13/12 has been added to the Low P/Bk closed positions spreadsheet, and GILT has been deleted from the record of Low P/Bk open positions.
Alphabetical, though in no particular order of merit, my current top-five low price to book value stocks are: AXS; DIT; HDNG; LM; and NDAQ.
My new featured equity from among them is AMCON Distributing Co. (DIT) (recent price $60.02). It meets Benjamin Graham's bargain stock safety and value criteria.
AMCON Distributing Co. will be added to our nest egg at its market price in early trading today, 11/16/12.
11/17/12-Since yesterday's entry, there have been no new sales or sell signals among assets and portfolios followed here.
Alphabetical, though in no particular order of merit, my current top-five low price to book value stocks are: AXS; GLF; HDNG; NDAQ; and ZOLT.
My new featured equity from among them is Gulfmark Offshore, Inc. (GLF) (recent price $27.61). It meets Benjamin Graham's bargain stock safety and value criteria.
Gulfmark Offshore, Inc. will be added to our nest egg at its market price in early trading Monday, 11/19/12.
In addition, I like Sasol, Ltd. (SSL) ($41.64) as my latest addition to the Selective Six Percent Plus portfolio. It will be added as well at the early trading price on 11/19/12.
Disclaimer and Disclosure Statement
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.