Thursday, April 13, 2006

Portfolio Changes

A few days ago I made some portfolio changes by selling my NCC. For a bank, I had a nice one year gain, but I thought the risk:reward ration wasn't on my side. Interest rates are rising, which the big banks can offset/hedge, but the one thing that bothered me about NCC was their mortgage side. The housing sector is getting a little shaky where prices are dropping in most major markets, inventory is picking up, and there aren't enough buyers out there.

I took some profits in a few other stocks because of nice rallies and I added (slightly) to the insurance sector. The company is a small cap and doesn't really have a strong correlation with the market.

I ran a few more screens today and I need to go through that list, but I might have found a couple interesting stocks to look into.

The tanker sector is not turning up. A few companies were downgraded this weak because of lower rates and higher capacity. Everyone is trying to build more tankers (especially China) and this will just increase the supply of ships. This increase in supply will put downward pressure on the charter rates and they are starting to decline even more. I was tempted to buy a little bit of a few tankers, but I rather watch the rates drop even further especially when you have companies getting rid of their dividend (TOPT- although they will pay out a special dividend). I rather wait till things bottom out and rates start picking back up. It might take a few years, but when the industry hits the bottom I'll be ready to buy. The only company I might look into and add to my position is SFL because it's a leasing company rather than a tanker company. The majority of their contracts are locked in for awhile and I need to see how safe the dividend is (yield is north of 9%).

After writing my post about coins, I'm thinking about putting 1-2% of my net worth into coins.
I definitely have to read up more on this area, but it might be worth a 1% position.

I'm closely keeping my eye on the Peruvian elections. No candidate won the majority of the vote, so there will be a run-off between the top two candidates. As of two days ago this was bad news for foreign mining companies because Humala is in the lead. He's preaching a leftist campaign and doesn't like foreign companies making huge profits (he's like Chavez in Venezuela). If Flores isn't in the top two, then mining companies might take a hit. I'm still watching CUP and it's rallied a bit lately but if Humala wins it might take a hit.

No comments: