May 2004 Month-End Holdings
| Month-End Investment Portfolio | May 2004 | |||||||||
| Type | Quantity | Avg Cost | Cost Basis | Current Price | Value | Gain (Loss) | % of Portfolio | |||
| After-Tax Accounts | ||||||||||
| OCA | Orthodontic Centers of America | Stock | 1,000 | $ 4.77 | $ 4,770 | $ 8.55 | $ 8,550 | $ 3,780 | 12.0% | |
| PPD | Prepaid Legal Service | Stock | 280 | $ 23.07 | $ 6,460 | $ 23.56 | $ 6,597 | $ 137 | 9.2% | |
| .ZMFME | MSFT Jan 05 $25 Put | Option (Bearish) | 1,000 | $ 1.38 | $ 1,380 | $ 1.80 | $ 1,800 | $ 420 | 2.5% | |
| .YWZMD | QQQ Jan 06 $37 Put | Option (Bearish) | 600 | $ 5.23 | $ 3,138 | $ 4.60 | $ 2,760 | $ (378) | 3.9% | |
| Cash | (Estimate of Investable Cash) | Cash | $ 12,200 | 17.1% | ||||||
| Subtotal | $ 31,907 | $ 3,959 | 44.6% | |||||||
| Roth IRA Accounts | ||||||||||
| FDP | Fresh Del Monte Produce | Stock | 148 | $ 26.04 | $ 3,854 | $ 24.68 | $ 3,653 | $ (201) | 5.1% | |
| MO | Altria Group | Stock | 50 | $ 45.14 | $ 2,257 | $ 47.97 | $ 2,399 | $ 142 | 3.4% | |
| TALK | Talk America Holdings | Stock | 290 | $ 10.41 | $ 3,019 | $ 9.41 | $ 2,729 | $ (290) | 3.8% | |
| .WDMH | QQQ Jan 06 $34 Put | Option (Bearish) | 1,000 | $ 3.54 | $ 3,538 | $ 3.30 | $ 3,300 | $ (238) | 4.6% | |
| .WDMG | QQQ Jan 06 $33 Put | Option (Bearish) | 200 | $ 3.12 | $ 624 | $ 3.00 | $ 600 | $ (24) | 0.8% | |
| Cash | Cash | $ 8,753 | 12.2% | |||||||
| Subtotal | $ 21,433 | $ (611) | 30.0% | |||||||
| 401(k) Account | ||||||||||
| NIIVX | ING International Value | Fund | 248 | $ 3,953 | $ 15.75 | $ 3,904 | $ (49) | 5.5% | ||
| OAKBX | Oakmark Equity and Income | Fund | 41 | $ 891 | $ 23.09 | $ 936 | $ 45 | 1.3% | ||
| RYLPX | Royce Low Price Stock | Fund | 10 | $ 142 | $ 14.33 | $ 137 | $ (5) | 0.2% | ||
| FRTXX | Fidelity Retire Money Market | Cash | 10,535 | $ 10,535 | $ 1.00 | $ 10,535 | $ - | 14.7% | ||
| Subtotal | $ 15,512 | $ (9) | 21.7% | |||||||
| Employment Stock Option Grant (ESOP) | Option (Bullish) | $ 2,686 | 3.8% | |||||||
| Total | $ 71,538 | 100.0% | ||||||||
| Cash | $ 31,488 | 44.0% | ||||||||
| Stock | $ 23,927 | 33.4% | ||||||||
| Option (Bullish) | $ 2,686 | 3.8% | ||||||||
| Option (Bearish) | $ 8,460 | 11.8% | ||||||||
| Fund | $ 4,977 | 7.0% | ||||||||
TRANSACTIONS
TRADE #43 - Buy WDMH (QQQ Jan 06 $34 Put) 1000s @ $3.50 in Roth IRA
TRADE #42 - Buy MO 50s @ $45.04 in Roth IRA
DISCUSSION OF PORTFOLIO
At this moment, my actively managed accounts (consisting of After-Tax Accounts and Roth IRA Accounts), are essentailly market-neutral now: the equity positions are sufficiently hedged by the bearish option plays and I am expecting the cash-flow-rich positions to come ahead of the market to bring me the portfolio gain. On the 401(k) front, the portfolio continues to be very defensive. Overall, I'm satisfied with the 44% cash position and 12% bearish option hedge.
DISCUSSION OF INDIVIDUAL POSITIONS
OCA - OCA displayed another rollercoast ride in May by touching a low of $6.34 and finishing the month at $8.55. During the month, OCA delivered its (delayed) Q1 report and annouced policy change to simplify its accounting. I view the accounting change as positive while remain neutral about the fundamentals. I still don't see the case for the bears -- OCA apparently has enough cash flow to continue its business, and certain expansion initiatives may bring back organic growth. My target price is $10 but I may sell at $9.50 or so.
PPD - Not much news of PPD in May and I still love the solid cash flow from the business. Price target remains at $35.
FDP - FDP recovered from a mid-May low of $22.90 and closed the month at monthly high of $24.68. Since the fundamentals do not change, I keep my target of $40.
MO - My newest position already delivered 6% capital appreciation in one week. Multiple research reports confirmed the fundamentals are still strong and legal exposure is still minimal. My price target is $60 as stated in my trade comments.
TALK - TALk reclaimed lost grounds and ended the month at $9.41 after a mid-May low of $7.53. The upcoming June will bring more clarity in its negotiation with SBC and FCC's policy standing. While TALK remains to be a very risky bet at the moment, I still think TALK will survive. Price target is $15 compared to $17 in the last month.
Various PUT LEAP Options - NASDAQ added 3.5% during the month while S&P 500 only gained 1.3%. My bearish option plays were mostly losing ground during the month. However, I still all bets as long-term hedges against a very likely market downturn, so I am not considering liquidating them any time soon.
DISCUSSION OF 401(k) ACCOUNT
My 401(k) portfolio stays very defensive. While I boosted my 401(k) contribution percentage, all the new contributions fly to the money market fund yielding 0.8%
2004 was not lenient on me in terms of portfolio performance. In my actively-managed accounts, namely after-tax account at AmeriTrade and Roth IRA accounts at Fidelity and BrownCo, I completed eight transactions, only to see a loss of $3,572.56 at year end. The ARR for ... Read
Sometime next week, I will sell my first batch of vested Stock Award shares of Microsoft, immediately after it becomes vested on August 29th. I briefly discussed this choice back in early July but I feel it's worthwhile to put together a holistic view of ... Read
A quick note that I am about to close my AmeriTrade account in the next five days. I opened this account back in December 2002 to took advantage of a $75 new account bonus offer. In the last 18 months, I actually only made two ... Read
Month-End Investment Portfolio April 2004 Type Quantity Avg Cost Cost Basis Current Price Value Gain (Loss) % of Portfolio After-Tax Accounts OCA Orthodontic Centers of America Stock ... Read
