Monthly Portfolio Performance Report

Two months have gone by, and after a market peak mid July, my stocks took a big hit, lowering my year to date return to +15.20% from a high of +26.74% on 07/13, and bringing my monthly losses to -6.02%.
Even with above expectation earning announcement my biggest loser was Volcom plunging -29.21%! The last time this stock lost a third of its value it went on a bull run, rising 140% over 11 months. This may well be an excellent buying opportunity, now that their European infrastructures are up and running the next quarterly earnings should bring a big upside surprise.

GOOG: -2.43%

NUAN: -1.49%

MRK: -0.30%

EEM: +1.12%

VLCM: -29.21%

GLD: +2.29%

COP: +2.98%

Investing Strategy

After a day like today, it's always good to take a long hard look at your portfolio and point out what is not working, and at the same time look for what is working that is not in your portfolio.
Here is what you should see in there:

• Defensive stocks (food, liquor, tobacco, and high yielding stocks)
• Bonds ( I don't care if you own munis (municipal bounds), or the total bond market ETF AGG, buy more)
• Oil related equities
• Precious metal

While I personally don't recommend shorting the markets, money can still be made buying index puts, or even going long on one of the new ultra short ETFs, like SDS which will capture twice the loss of the S&P 500, up +4.62% today. Putting a small portion of your money out of say, your small cap growth funds, in there would probably be wise.

Google's Earning Miss, an Opportunity For You?

As I came home today and turned on my favorite channel (CNBC) I first beheld the DOW closing above, or more exactly at 14,000, and thought "uhm, how bullish", my next observation was not as promising, as I watched the GOOG ticker followed by a red 39.40.
My heart dropped. I immediately checked the Dow Jones News to find out why my favorite stock was taking a 7% dip after hours.
As I remember, there was a couple of things that scared investors last quarter, one being the fear of rising expenses, and the other, the fear Google could not grow it's revenues fast enough anymore to justify this kind of PE. These two worries seem to have been put to rest for the time being, as traffic acquisition costs declined to 30% from 31%, and revenue came in for the quarter at $2.72 billion when analyst were expecting $2.68 billion.
Unfortunately, earnings came in at $3.56 a share compare to the expected $3.59, but since we are used to see Google's earnings beat the street expectations like a pinata, investor disappointment is high.
Time has taught us that any dip in price for Google share is usually a buying opportunity, but if CEO Eric E. Schmidt doesn't turn his recent acquisitions into earnings this company is going to have a hard time growing at the speed they have been in the past few years.

Fortress and Blackstone, Time to buy?

I was in a classroom environment last week, briefly discussing recent IPOs, when one of my class mates noted how poorly Blackstone stock had performed since its debut on the New York Stock Exchange. At first it didn't bother me..., but I then realized he had no idea why the IPO had a bad first week, and that did annoy me. The reason behind the poor start are the fears of tax law changes which could drop hedge funds and private equity firms into the 34% tax bracket from the actual 15% I believe.
Today the stock dropped an other 2.51% to $29.18 on corporate governance issue concerns, apparently the way the IPO was structured it did not follow NYSE rules imposed on other corporations trading on the exchange (operating company vs. investing company).
But as investors will learn tomorrow the first legal hurdle seem to have been passed, as Treasury Assistant Secretary for Tax Policies Eric Salomon had nothing positive to say about the new proposed tax laws.
I remember thinking, last week, "with all the money these guys have, I'm sure they'll be able to lobby successfully(Blackstone co-founder and CEO Steve Schwarzman made $7.7 Billion on the day they went public), plus if this guy says "sell" without knowing why, the odd lot theory would indicate "buy"".
Now it seems my initial prediction is holding true, I am sure they are smart enough to navigate around anything legislators might throw their way, and with BX now down 10% from its opening day, and FIG down 22%, I bet they are due for a pop.
Keep an eye out!

ConocoPhilips Shares up 3% After Company Annouces $15B Share Buy Back

Conoco's buy back represents about 180 million shares, or 11% of all outstanding stock, it will be buying back shares every quarter until the end of 2008. Very bullish news for Conoco stock holders, on top of high oil prices, making this stock look attractive in times where the sub prime mess is pushing most averages lower.