Tuesday, July 14, 2015

Update on the Greedy Dragon portfolio

Hey guys, I hope your portfolios haven’t got fucked up as badly as mine was recently. My coal and O&G stocks were absolutely brutalized in the past few weeks. Could it be time for the Greedy Dragon to liquidate his holdings and invest in a mutual fund? While I made a couple of mistakes, overall I have confidence in my research and decisions.  I’m investing in businesses, therefore long-term profitability and actual risks to the business as a going concern are all that I care about. I would be lying if I told you I didn’t give a shit about near term share price fluctuations, because it does plant some doubt in my mind as to my ability to value companies and assess risks. However, reason must come before emotions. I’m trying to be rational by using the recent selloff in natural resource stocks to selectively add to my positions. I hope I will be rational enough not to get overexposed to the natural resource sector and to quickly realize permanent impairments in intrinsic value if they occur.      

Anyway, here are the transactions I made for the Greedy Dragon portfolio in the past couple of months or so. I hope I didn’t leave anything out. Please do your own research before investing in anything. I recently added to my position in Northern Oil & Gas, Natural Resource Partners, Cloud Peak Energy and Comstock Resources. I sold my positions in LRR energy, Mercadolibre and National Bank of Greece (NBG). NBG is the first investment in the Greedy Dragon portfolio which I believe has become permanently impaired. Maybe the stock might start to go up soon, but I don’t want to take the risk (I wish I had been more professional with this position from the start and cut my losses earlier). If Greece wants to get out of this crisis, it needs to move towards capitalism. But with a socialist as their prime minister, I don’t think that a Greek economy based on free markets is likely in the foreseeable future.

Well, that does it for this update. Take care and stay rational.

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