2014 Portfolio Update – May 13, 2015

There is no better time to second-guess yourself than the present  — Metaphor Manglers, probably

I don’t usually pay much attention to short-term effects, because usually they are transitory and contribute little to the trend; even the five year CAGR numbers are meaningless against the backdrop of the 2008 debacle as the subsequent tide lifted all boats, even General Electric appeared to perform. In yesterday’s post I commented at length on my struggles to complete my annual ritual of rebalancing in the face of uncertainty, so today I had a brief look at the effect of that dithering:

1 Year gains at May 6 rebalancing: 5.76%
1 Year gains at May 13 rebalancing: 0.82%

Of course in that time frame I avoided a huge thrashing of the oil stocks I had planned to load up on, and who knows how long those losses (avoided) would have taken to recoup …

Screen Shot 2015-05-14 at 11.07.32 AMWhile the raison d’être for this blog may have morphed into something that I could not have completely foreseen, the primary goal is still the same: chronicling my adventures in investing for all to see. As I mentioned yesterday, and as you see above, it’s not always roses; as a previous mentor once said: “sometimes you gotta call the baby ugly” 🙂 For a bit more detail have a look at last year’s update.

This year’s rebalancing resulted in a 60% turnover of holdings, with Bank of Montreal (BMO), Rogers Communications (RCI.B) and Shaw Communications (SJR.B) moving out of the Top Five positions. BMO returned ~38% (9% CAGR), Rogers lost 1.5% and Shaw eked out a 1.2% return.

The Alberta Troubles left me decidedly leary of all the energy stocks that crowded the upper ranks of the Dogs of the TSX, so, with some caution I moved into Cenovus (CVE), yielding 5.15%, Potash (POT) with 4.65% and CIBC (CM) at 4.5%. A strict application of the rules would have left me with Cenovus, Husky (HSE) and Inter Pipelines (IPL) and that just seemed like more trouble than I could sleep through. Besides, Cenovus management (and Potash, some time earlier) had put a stake in the sand with respect to the dividend, promising to maintain it in the face of low oil.

Dividends anticipated for the coming twelve months increased by ~11% as a result of the rebalancing.

I promised complete transparency, even when I do something that will cause others to Roll On The Floor, Laughing Their ‘Fing Asses Off, so: having achieved a balanced portfolio with my new purchases, there was some left over. Yeah, I shoulda bought myself something pretty, but I chose to put the rest in TransAlta (TA) instead. TransAlta has been struggling over the last number of years, and last year, when I should have dumped it and taken the 30% loss I chose instead to hold on and hope for better times. Their last two quarters have shown promise, and the market had responded favourably, at least until the day that Albertans rolled their collective dice. Now it’s down again. My thoughts are simple: the NDP will not damage the energy sector beyond it’s ability to respond, and as such any damage will be transitory: “This too shall pass“.

I cross my fingers and hope that I do not provide that ROTFLMAO moment.

updated 13 May, 2015

updated 13 May, 2015

Finally, yes, the last two years are not stellar, but I’ve seen worse.

Thanks for reading and keep swinging!


2 thoughts on “2014 Portfolio Update – May 13, 2015

  1. I have one concern about transalta, it has coal fired plants producing electricity which will suffer under the new NDP government. They plan on closing them sooner then expected.

    • Yeah, I came across the same thing. I have to believe that this government will exercise common sense in their pursuit of ‘a better world’. Certainly they have to come to terms with the fact that mass unemployment and a hostile corporate environment will not pave their path to re-election (or a remotely balanced budget), and what government is not planning their next term 😉

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