Month-End Investment Portfolio |
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April 2004 |
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Type |
Quantity |
Avg Cost |
Cost Basis |
Current Price |
Value |
Gain (Loss) |
% of Portfolio |
After-Tax Accounts |
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OCA |
Orthodontic Centers of America |
Stock |
1,000 |
$ 4.77 |
$ 4,770 |
$ 7.17 |
$ 7,170 |
$ 2,400 |
10.6% |
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PPD |
Prepaid Legal Service |
Stock |
280 |
$ 23.07 |
$ 6,460 |
$ 25.00 |
$ 7,000 |
$ 540 |
10.4% |
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.ZMFME |
MSFT Jan 05 $25 Put |
Option |
1,000 |
$ 1.38 |
$ 1,380 |
$ 1.60 |
$ 1,600 |
$ 220 |
2.4% |
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.YWZMD |
QQQ Jan 06 $37 Put |
Option |
600 |
$ 5.23 |
$ 3,138 |
$ 5.20 |
$ 3,120 |
$ (18) |
4.6% |
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Cash |
(Estimate of Investable Cash) |
Cash |
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$ 16,177 |
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24.0% |
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Subtotal |
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$ 35,067 |
$ 3,142 |
52.1% |
Roth IRA Accounts |
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FDP |
Fresh Del Monte Produce |
Stock |
148 |
$ 26.04 |
$ 3,854 |
$ 23.35 |
$ 3,456 |
$ (398) |
5.1% |
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TALK |
Talk America Holdings |
Stock |
290 |
$ 10.41 |
$ 3,019 |
$ 8.92 |
$ 2,587 |
$ (432) |
3.8% |
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.WDMG |
QQQ Jan 06 $33 Put |
Option |
200 |
$ 3.12 |
$ 624 |
$ 3.30 |
$ 660 |
$ 36 |
1.0% |
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Cash |
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Cash |
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$ 8,753 |
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13.0% |
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Subtotal |
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$ 15,456 |
$ (794) |
22.9% |
401(k) Account |
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NIIVX |
ING International Value |
Fund |
248 |
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$ 3,953 |
$ 15.75 |
$ 3,904 |
$ (49) |
5.8% |
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OAKBX |
Oakmark Equity and Income |
Fund |
41 |
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$ 891 |
$ 23.09 |
$ 936 |
$ 45 |
1.4% |
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RYLPX |
Royce Low Price Stock |
Fund |
10 |
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$ 142 |
$ 14.33 |
$ 137 |
$ (5) |
0.2% |
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FRTXX |
Fidelity Retire Money Market |
Cash |
9,164 |
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$ 9,164 |
$ 1.00 |
$ 9,164 |
$ - |
13.6% |
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Subtotal |
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$ 14,141 |
$ (9) |
21.0% |
Employment Stock Option Grant (ESOP) |
Option |
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$ 2,686 |
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4.0% |
Total |
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$ 67,350 |
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100.0% |
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Cash |
$ 34,094 |
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50.6% |
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Stock |
$ 20,213 |
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30.0% |
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Option |
$ 8,066 |
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12.0% |
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Fund |
$ 4,977 |
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7.4% |
BRIEF INTRODUCTION TO NEW FORMAT
Starting from this month, I will report my month-end portfolio in a new format to present my holdings in brokerage firms, Roth IRAs, 401(k) and ESOP in a holistic view. The total portfolio size will closely match what I will report in my monthly reviews of total personal finance picture.
At the bottom of the table, I also break out by portfolio by type of vehicle like cash, stock, mutual fund and stock options.
I found this to be a much better view than the previous views which only includes positions in actively-managed accounts (after-tax brokerage accounts and Roth IRA). By the end of the day, it is all the components in my portfolio, no matter actively-managed or passively-managed, that work together to achieve my financial goals.
TRANSACTIONS
TRADE #41 - Buy WDMG (QQQ Jan 06 $33 Put) 200s @ $3.00 in Roth IRA (April 15, 2004)
TRADE #40 - Sell OCA 500s @ $8.65 in Roth IRA (April 06, 2004)
DISCUSSIONS OF PORTFOLIO
During the month of April, I continued my drive to move my portfolio more defensive. As a result, now I am more than 50% in cash, the first time in 2004. I also increased a little bit of my PUT option exposure by buying more of bearish QQQ bets.
I am still 30% in stock but I am comfortable about my holdings at current basement price levels. Also, I have 8% of my portfolio value invested in bearish PUT options to hedge the market risk, which I expect to turn in considerable return in the next couple of years.
DISCUSSIONS OF INDIVIDUAL POSITIONS
- (OCA) OCA again offered a rollercoaster ride in a month. The stock started the month at $7.92, reached as high as $9.83 (and more than $10 intraday), only to fall to $7.17 at month close. It seems that I made the right choice to at least take some of the profit out of the table by liquidating my 500 shares in Roth IRA at $8.65 apiece. My OCA holding in Datek is already eligible for long-term capital tax treatment, but at the current price levels, I will hold for a while. I don't not see much downside risk from this level, and I think the recent event of changing auditors are a non-issue in the long run. My target price is $10.
- (PPD) PPD continues to make good progress in stablizing the persistency rate and buying back shares. Although its repurchase effort is currently limited by loan covenants, I see management can continue to ride the ship and realize good value for investors. My target price is $35.
- (FDP) FDP suffered a bit after a below-expection quarterly earning report, but I definitely see it as along-term value buy, and will potentially buy more if price drops further to $20 or so. I understand being in this industry of fresh produce means lots of short-term surprises but I am determined to hold this issue for a long term. Target price for FDP is $40.
- (TALK) The legal cloud has not been cleared up yet.The company delivered a solid quarter and triggered a short-term climb of stock price. I am mindful of the legal risks, but even if TALK has to pay a higher price to Baby Bells, I still think the company can continue to operate its business reasonably profitable. Target price is $17.
- (Various PUT LEAP options) I see these positions are long-term hedge to a very possible stock market meltdown moving forward, so I am in no hurry to sell them any time soon. I may, however, consider to switch my 1-year MSFT put option for 2-year QQQ put option.
DISCUSSION OF 401(k) ACCOUNT
401(k) provides me a good place to get some exposure in international equity market, and that's the reason I choose to have 5.8% of my portfolio in NIIVX, an international fund mainly investing in Europe and Japan. VIIVX actually dropped in the last month, partly due to unfavorable foreign exchange rate, but I sense US dollar will be depreciating anyway even with potential rate increase. I will continue to hold this for a while.
My other positions in 401(k) account, OAKBX and RYLPX, are just some water-testers.
Starting from May, all of my new 401(k) contributions will go to FRTXX (Fidelity Retire Money Market). I also increased my deduction from 6% to 15% in a hope to shielding more of my income from income tax from now on. I am always eligible for 3% extra employer contribution if I choose to deduct at least 6% of my salary for 401(k) contributions.