Portfolio Update: June 2011

Here’s the monthly portfolio update for the BTI portfolio which consists of 2 accounts: a TFSA account and a Non-Registered account.

The TFSA is currently holding the following stocks (June 30 closing prices):

(A Tax Free Savings Account is an account where your capital gains are exempt from taxes)

tfsa snapshot june 2011

Market Value: $14,110 + $919 in Cash = $15,029

The Non-Registered account is currently holding the following stocks:

non-registered snapshot june 2011

Market Value: $7275 + Cash: $1,350 = NET: $8,625

BTI Portfolio Value: $23,654

YTD Results from January 1 2011

TSX at start: 13,443 @ June 30: 13,300 Change: -1.06%

BTI at start: 24,926 @ June 30: 23,654 Change: -5.1%

M/M Results from June 1 2011

TSX at start: 13,802 @ June 30: 13,300 Change: -3.63%

BTI at start: 25,748 @ June 30: 23,654 Change: -8.1%

HELOC Portfolio Performance

The HELOC portfolio is basically a non registered account with money borrowed from my home equity line of credit. *Please take note* that this is money I can afford to lose. The impact of losing this money would be equivalent to skipping a lump sum payment on my mortgage for 1 year. I will use the bank’s “Performance” tool for the monthly results when possible because it takes into account deposits and withdrawals. On to the results:

heloc snapshot june 2011heloc performance june 2011

For the record, my outstanding balance on the HELOC is now $23,500, so basically I am up about +$13,576 so far if I sell everything at the closing prices above.

heloc margin

Monthly Review

June has been brutal on my portfolio and that is an understatement. First, let’s call things by their names, I have 2 weaknesses:

  1. I am an investor and not a trader and that does not work in times of crisis.
  2. I am lacking an important weapon in my arsenal: Options.

Add to that, I did a lot of bla bla in my last portfolio update about being at the crossroads with the end of QE2 and having no sacred cows yet I chose NOT to play the market timing game. In hindsight, it was a big mistake as I could have protected some of my gains for the year.

Getting back to number 1, I think it is only a weakness when you look at a short time frame and it probably should not be considered a weakness on my part. After all, I can’t spend a dedicated 8 hours per day on the market when I have a full time job. I also believe day trading is what “playing the market” is which I am not made for. I like number crunching, building a case for investing and following up on my investments. I am not a big believer in decorticating charts as I don’t think buying a stock based on the rearview mirror is compelling even though some psychological price levels become self fulfilling prophecies because of all the believers out there.

For number 2, I see myself capable on selling puts or calls on my dividend payers. This is an improvement I need to work on even though it only  a small number of securities qualify. It’s not going to guarantee victory at the end of the road but every little bit helps.

It’s in times like these that I am very happy to have kept my feet firmly on the ground when  I was reporting back to back double digit returns. I never burned my bridges with humility as pride usually precedes the fall. Your psychological well being is as important when you’re making money as much as when you’re losing money as there’s always a danger you end up buying or selling based on emotions which usually results in a sad ending.

I am not Warren Buffet and I do not want to be him or any of the big traders/investors. I want to be me; I want to invest in the way I enjoy knowing fully what the risks are. This is the nature of the markets, they fall after rising and they rise after falling. As long as I keep my cool head and my determination, the war with Mr. Market goes on.

The BTI portfolio is officially in the red this year and the HELOC portfolio while in positive territory and ahead of the TSX is way below the double digit returns I had just last month. For the BTI portfolio, the variable is clear and its name is SkyWest Energy; the little Cardium focused junior. It is a matter of when not if SkyWest rises again as it executes its growth program. There’s also a buyout rumor of BXE acquiring SKW which I am not buying ;) If the rumor was true, the daily volume would speak volumes about it. Hey, if it comes, I’ll take it but I am not holding my breath on a rumor.

In my HELOC portfolio, Perpetual Energy is the stock that will take the longest to recover. It’s dead money and it will remain so for a while. That does not mean I might not average down on the price since I believe it’s up from here as they slowly increase their liquids weighting. I am not worried about their finances as they are asset rich and can choose to monetize these assets relatively easily (as long as we are not in a recession of course).

Greek’s debt issues are finally solved or are they? The market might be breathing a little bit better but there’s still a bunch of negative variables “investors” can focus on such as the US debt! On the other hand I remain optimistic and my scenario is playing out nicely: Greek debt issues solved, oil prices leveling but they still need to fall a little bit lower and we need improved US economic data to show up in a couple of months. While India and China are on track for +9% growth in 2011, the focus remains on the US and Europe. I am not worried about Europe as they will have the chance to plunder develop Libya’s natural resources and infrastructure once Gaddafi is out for good.

How is your portfolio doing so far?


Related posts:

  1. Portfolio Update: July 2011
  2. Portfolio Update: January 2011
  3. Portfolio Update: February 2011
  4. Portfolio Update: May 2011
  5. Portfolio Update: April 2011