Thursday, January 3, 2008

BARRICK GOLD CORP. (ABX)

I sold my shares in Barrick Gold Corp. (ABX) today at $48.55 per share. I held it for 3 months for a 20 percent gain. Barrick went up 16 percent in the last 2 days and I decided to take my profits. Gold is at a 28 year high but I think it could keep going up but figure there will be some wild swings up and down. I might be selling to early but I still have a position in Anglo (AAUK) which is not a pure gold play, it also mines Diamonds. Nobody ever went broke taking a profit.
I talked about Preferred stocks in my year end review and they have gone up from 3 to 7 percent a day for the last two days. I think the belief that the Federal Reserve will keep lowering interest rates throughout the year has woken up many investors as to just how cheap many preferred stocks have gotten. With 7 to 8 percent dividends they are going to look pretty good if rates do go down.

Tuesday, January 1, 2008

YEAR END REVIEW

2007 proved to be a difficult market. My portfolio lost 5.2 percent for the year. This is only the third losing year I have had since 1992. The previous years being 1994 with a loss of 1.4 percent and 2002 with a loss of 2.9 percent.
The major reason for the losing year was the declining value of my preferred stock holdings which make up 26 percent of my portfolio. The good news is they are now paying an average dividend of 8.5 percent and I added to several on the way down so I am in a good position to collect fat dividends while I wait for them to climb back up. I rarely ever sell a preferred stock, only if I think the underlying company is in trouble. The only way for a company to call them in is if they have reached the maturity date and they pay me $25.00 per share. Most of the ones I own are trading from $18.00 to $22.00 so they will have a nice move up someday when they do get called in.
While reviewing the year I counted 14 stocks or mutual funds I sold in 2007 for a 10 percent or higher profit. I counted 3 I sold at a loss of 10 percent or higher. There are several stocks I still own where I have a nice profit as well as several I own where I am down considerably from where I bought, most notably Citigroup which I wouldn't consider selling at today's depressed price. If I didn't already have a position I would be buying here even with the rumours of a dividend cut.
What to do in 2008? My portfolio is split between 38 percent stocks, 26 percent Preferred Stocks, 17 percent bonds, and 19 percent cash.
I hate to have almost 20 percent of my money in cash so I will be looking to put it to work in 2008.

NEW PURCHASES

New Purchases
Anglo AM PLC (AAUK) purchase at $30.50 Gold Mining Company
Home Diagnostics (HDIX) purchase at $8.11 Medical Instruments and Supplies
Rimage Corp (RIMG) purchase $26.20 Technology
Sanders Morris Harris Group purchase $10.20 Fianancial Asset Management

Wednesday, December 26, 2007

HRP Properties Trust (HRP)

I purchsed more share in HRP today at $7.78 per share.
HRP Properties Trust (HRP) is an office building REIT with 18mn square feet of space. Funds From Operations has been stable for the past year, although occupancy has slipped slightly. FFO Per Share at 29 cents a share is still above the dividend at 21 cents as of September 30 2007. The Company added $48mn in new buildings in the 3rd Quarter of 2007 which should help cash flow slightly. Debt levels are reasonable.The stock's at $7.78, just off its 52 week low, and yields 10.9%. Some investors are worried that the Company will cut the dividend but I don't see it. Even if I'm wrong, the downside is limited. HRP has a roster of quality buildings and customers, investment grade debt levels and a long operating history.

Thursday, December 20, 2007

BPP & PFD

New purchases in the following
Black Rock Preferred Oppportunities Trust 12/12 at $17.17 Dividend now at 8.8%
Flaherty & Crumrine Preferred Income Fund 12/12 at $11.73 Dividend now at 8.9%

New Financials Purchases

New purchases were made for the following three finanacial stocks.
Citigroup (C) 12/20 at $29.76
Wells Fargo (WFC) 12/19 at $30.26
Washington Mutual (WM) 12/19 at $15.15

Looking for a short term trade on these, 3 to 6 months unless they get a good pop before.

Thursday, December 6, 2007

BLACKROCK ENHANCED DIVIDEND ACHIEVERS

Today I purchased more shares of BlackRock Enhanced Dividend Achievers (BDJ) at $11.80 per share. The BlackRock Enhanced Dividend Achievers Trust, BDJ, is a closed-end equity fund. It currently yields a 10.48 percent dividend at today's price. It also trades at a 12 percent discount to it's underlying stock holdings. The high yields are enabled by writing call options.
A call option on a stock gives the buyer the right to buy 100 shares of a stock at a pre-determined price (strike price), for a pre-determined period of time (expiration date). The fund only writes covered calls, which means they own the stock and are selling the option to someone else to buy the stock for a premium. In a covered call strategy, the risk of loss on the option is zero. If the stock increases above the strike price of the call, the investor simply delivers the shares of the stock to the call buyer. The investor gives up some upside on the stock position in return for risk-free option income. The nice part of this strategy is if the stock goes down or stays the same within the expiration date the seller of the call keeps the premium and can write another call, thus the extra income.
BDJ's top ten holdings are Chevron, AT&T, GE, Bank of America, and Pfizer.