"Active" Portfolio Info
What is an "active" portfolio & what positions am I
currently recommending for the "active" Portfolio?
currently recommending for the "active" Portfolio?
- This is the first and potentially the most important part of
my investment philosophy depending on implementation.
- My active portfolio is concentrated (approximately 10
positions), has the ability to go both long and short, can
use options to "leverage" or "hedge", and finally turns over
more frequently than a long-term portfolio (core portfolio).
- This approach offers more return but "can" entail more
risk! In building and profiling my active portfolio to
subscribers of my newsletter, I will actually try to reduce
risk versus the market by using a long/short approach and
by choosing securities that do not correlate highly to each
other.
- It is my belief that an active portfolio should only be piece
of an investors's overall asset allocation (10 to 30% in my
opinion) depending on a client's age, risk tolerance, time
till retirement, and ability to manage a portfolio. Having
said this, most clients are way too diversified (see my
investment philosphy) including a lot of weathly clients I
have advised over the years.
- For illustrative purposes, I will use a $10,000 portfolio as
a "model" for my active portfolio. Investors and
subscribers can scale this portfolio according to their own
investable assets.
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"To build real wealth, especially in an environment of strong monetary and
credit growth, investors need to do two things well. First, avoid losing
money. Second, take concentrated positions in ideas with conviction...."
credit growth, investors need to do two things well. First, avoid losing
money. Second, take concentrated positions in ideas with conviction...."
Okay, okay....you have read this far, so you I will share a
few positions I am looking at in my "active" portfolio, both
on the long and short sides. I will profile all of these
names more in depth with my first newsletter.
few positions I am looking at in my "active" portfolio, both
on the long and short sides. I will profile all of these
names more in depth with my first newsletter.
- On the long side, I am looking at several mining stocks
including TGB, GSS, GMO, & MMG. TGB is the least
risky due to their ongoing profitable copper mine. GSS &
GMO both have their own risks, but for different reasons.
GSS is a gold-mining company getting a majority of their
revenues from Africa. GMO is a moly producer with a
much more stable operating environment in Nevada, but
their stock has run up a good amount this year already
(see my gains in my long-term "core" portfolio".) MMG, a
zinc miner with some silver exposure, may be the most
profitable of the bunch in the long-term, but it is the
earliest in terms of production.
- On the short side, I am considering shorting FED & DSL
due to their Alt-A mortgage exposure in California. I still
think housing market still has another shoe to drop.
- Additionally, on the short-side, I will look at shorting MA,
AAPL, & AMZN once they technically break their
uptrends. I think each of these companies is overvalued
from a fundamental perspective, but they are too
dangerous to short at these levels (especially given the
blow-out moves on earnings from RIMM and ISRG).