Thursday, May 29, 2014

Updates on the Greedy Dragon portfolio (a NUCLEAR addition)

Please read the disclaimer here: Enjoy the article, bitches!

Sup my value investing homeboys! Today I bring you a brief update on the Greedy Dragon Portfolio. I recently added 2 new stocks to my portfolio and sold an older position. I usually write articles analyzing the stocks I bought, but I just couldn't find time to do this. I probably will start writing more frequently in about 2 weeks as my schedule will free up then. Anyway here are the stocks I bought and sold:

National Bank of Greece: I bought this stock sometime last week as I think that the Greek economy will start improving very slowly and that National Bank of Greece is slowly getting stronger. Don't get me wrong, I still think that the stock is risky and I only took a very small position in the stock. I will likely publish my analysis of the bank in a few weeks time. 

Yes, the stock went up 15%-20% since I bought it. I don't have those fancy smartphones so I can't take a picture of the contract note for proof (I don't know why but gadgets just don't interest me, all I look for in a phone is the ability to text bitches and flirt with them which my Nokia 3310 does just fine). So, I guess the haters will just have to take my word for it. Anyway, this is a very small position and a 15% return on it isn't likely to have a significant impact on my portfolio's total return. Maybe I will upload the contract note if I finally cave in and buy a smartphone (either for work purposes or to play candy crush or something with some chick).

Uranium Participation Corp: I also took a position in Uranium Participation Corp which is listed on the Toronto Stock Exchange. The purpose of the company is basically to hold uranium and achieve appreciation on the commodity. This is not a uranium mining company so you don't have to worry about large capital expenditure and operating expenses. The company has virtually no debt (not that I can remember when I glanced through the financial statements) and pays very little management fees so there's minimal risk of the company selling its uranium holdings at current low prices to meet its obligations. I can't take credit for the decision to invest in uranium though. I got the idea from this article on the DailyWealth. According to the article, it costs about $70 a pound to produce uranium but it's selling for below $30 a pound now. I urge you to read the article as it's very good. I generally shy away from commodities, except for times when the market price is lower than the cost of production. In this type of situations, I think it's likely that either the market price have to rise over production costs or some producers have to shut down which will result in lower supply and eventually higher prices. As I like to say, economics 101 mofos!!! 

This stock will also act as a hedge in my portfolio. I have a few positions in U.S. banks as I'm betting that the Federal Reserve will eventually have to raise interest rates. This could push the profits of U.S. banks up as I think they will have higher net interest margins in a higher interest rate environment. But in the event that the Federal Reserve keep rates low for an extended period of time, then I think inflation will start to set in and commodity prices will start moving up. 

Bank Rakyat Indonesia: I sold this stock as it went up quite a lot since I bought it, and I needed to raise some cash to fund my new stock purchases and still maintain a comfortable cash balance.

As always, thank you for reading. Take care and stay rational.

1 comment:

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