Wednesday, October 23, 2013

Out with the old, in with the new...

Today I traded out my shares of SD for a new position in CNQ.  Specifically, I sold all 4000 shares of SD at $6.46 (for proceeds of $25,835), which isn't bad considering I just bought them in April at $4.93.  I then purchased 850 shares of CNQ at $31.36 (for a total outlay of $26,661).  Unfortunately I don't have time for a full write up, but here's the elevator pitch...

Management is extremely talented and well aligned with shareholders.  If you have spare time read about Chairman Murray Edwards, he's the real deal.  Furthermore, I think CNQ is a high quality company (at least compared to other E&P's) and is selling at a compelling valuation.  In other words, at current prices I think CNQ is a much better risk-reward bet than SD.  Anyway, that's it for now, wish me luck!

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Thursday, October 3, 2013

Q3 Discussion

Well folks, looks like it's time for my Q3 discussion and analysis.  And while I hate to count my chickens before they're hatched, it looks like my portfolio has finally awakened from it's slumber.

More specifically, an unsustainable short interest in Sears coupled with a bullish report from Baker Street Capital caused the stock to shoot up in September.  I responded by trimming my position and locking in some gains.  However, as you'll see in the exhibits below, Sears is still very much a core holding.  

So what else is going on?  Well frankly, I'm as nervous as ever about valuations in the market, and as a result I'm holding a lot of cash (37.4% of portfolio).  Furthermore, although I continue to search for new opportunities, I repeatedly come up empty handed.  In fact, these days the market reminds me a little of 2005-07.  Maybe this makes me the investing equivalent of Chicken Little, but at least I sleep well at night.

Anyway, here's the summary:
  • I came into the year with $213,090 and ended the quarter with $268,074.  I didn't deposit or withdraw any money, so this increase is straight appreciation.
  • My portfolio has increased about 25.8YTD (35.6% IRR), whereas the Hypothetical S&P has increased about 19.7% YTD (27.2% IRR). 
And here are the exhibits (7+ year performance summary, waterfall graphs, holdings summary, and quarter-to-quarter bridge, click to enlarge):

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