John Bethel's Portfolio Performance through 2Q'06 - What was Hot and What was Not

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Includes: CMCSA, FRFHF, GM, MEG, SPOK, T
by: John Bethel

As a group, the 13 stocks making up the portfolio’s current holdings have achieved an average gain of 3.5% YTD through the second quarter. That compares to the S&P 500 being up 1.8% during the same time period. Both figures do not include dividends. Here’s how each of the holdings have performed so far this year:

General Motors +53.4%
Deckers Outdoor +40%
Comcast Class A Special +27.6%
DirecTV Group +16.9%
3i Group +14.4%
Liberty Capital/Interactive +8.1%
CBS Class B +5.6%
Molson Coors Class B +1.3%
Takefuji Corp. -4.5%
Media General Class A -11%
Nikko Cordial ADR -17.9%
USA Mobility -40%
Fairfax Financial -48.4%

Performance in the second quarter dampened the YTD performance of this site’s stock picks. General Motors’ (NYSE:GM) shares have done nicely in 2006, getting a boost on Friday with news breaking about a potential alliance with Nissan and Renault. The media-related stocks are doing well, especially Comcast (NASDAQ:CMCSA) and DirecTV Group (DTV), with the exception being Media General (NYSE:MEG).

Nikko Cordial's being down more than 17% in 2006 is an example of how deceptive statistics can be. The company’s ADRs are up more than 50% since being recommended last year. So it’s been a winner for the portfolio.

Takefuji is a relatively new holding, and I remain optimistic about its long-term prospects. Japan as a whole has been suffering a natural correction so I expect Takefuji shares to rise over time.

The big losers this year have been Fairfax Financial (FFH) and USA Mobility (USMO). Fairfax does not have a large share float and is the subject expensive short positions. These can impact the share price negatively, and sharply, at times. Fairfax management has issued a statement saying it knows of no business-related reason why the stock price has recently dropped. I believe Prem Watsa and his team and, as posted recently, I have boosted the amount of shares I own in the company by 30%. And I’m keeping my fingers crossed about hurricane season! ;-)

I probably get more reader emails about USA Mobility than any other holding. I do not know why its share price has suffered so much. I do not know of any major shareholders dumping their shares on the market, though that could always be the case. This company has a relatively small share float, is not covered by Wall Street or the financial press. That makes owning the stock frustrating at times, but I’m maintaining the position.

That’s it for now. I’m content with these holdings, if not the share price performance in every case.

I’m hopeful that two or three new portfolio positions will be established in the near future.

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Regarding how my portfolio has performed since its inception in April 2005, I’ve made 14 stock purchase recommendations since then. In all, the stock picks made on this blog have averaged a gain of 14.8% during the life of this blog. The “life of the blog” picks averaged 18.9% at the end of the first quarter, so this most recent quarter has dampened my overall performance. Four points need to be made.

Here’s how each pick has performed from their selection through the second quarter of this year, not including dividends, listed in the order of being recommended:

* General Motors was mentioned on 4/29/05 at $26.75. It closed 6/30/06 at $29.79 for a gain of 11.4%.

* Fairfax Financial was mentioned on 5/3/05 at $132.50. More shares were purchased for an average cost of $123.16.It closed 6/30/06 at $95.03 for a loss of 22.8%.

* 3i Group was mentioned on 5/17/05 at $12.73 (adjusted for a 16-for-17 reverse stock split). It closed 6/30/06 at $16.67 for a gain of 31%.

* Nikko Cordial ADR was mentioned on 5/26/05 at $8.64 (adjusted for a 5-for-1 ADR split). It closed 6/30/06 at $13.00 for a gain of 50.5%.

* Imagistics International was mentioned on 6/30/05 at $26.60. It was bought by Oce, N.V. later in 2005 for $43.00 cash for a gain of 58%.

* Molson Coors Class B was mentioned on 6/13/05 at $60.35. It closed on 6/30/06 at $67.88 for a gain of 12.5%.

* DirecTV Group was mentioned on 7/21/05 at $15.50. It closed on 6/30/06 at $16.50 for a gain of 6.5%.

* Liberty Media Series A was mentioned on 8/4/05 at $8.52. The company then distributed to shareholders two tracking stocks, Liberty Capital and Liberty Interactive, this year. I view those two as a single position in the portfolio. Capital closed 6/30/06 at $83.77 and Interactive closed at $17.26. This position has lost less than 0.01%.

* USA Mobility was mentioned on 8/24/05 at $26.34. It closed on 6/30/06 at $16.60 for a loss of 37%.

* Comcast Class A Special was mentioned on 11/28/05 at $26.73. It closed on 6/30/06 at $32.78 for a gain of 22.6%.

* Deckers Outdoor was mentioned on 10/18/05 at $20.92. It closed on 6/30/06 at $38.56 for a gain of 84.3%.

* CBS Class B was mentioned on 2/16/06 at 25.61. It closed on 6/30/06 at $27.05 for a gain of 5.6%.

* Media General Class A was mentioned on 3/21/06 at $47.05. It closed on 6/30/06 at $41.89 for a loss of 11%.

* Takefuji Corp. was mentioned on 4/20/06 at $62.50. It closed on 6/30/06 at $59.66 for a loss of 4.5%.

First, these are not “annualized” results or year-to-date results. These are simply how the stock picks have performed since being recommended. I will post YTD results next.

Second, these are not “audited” results. They’re just my calculator and me and I’m subject to correction.

Third, as stated, these results do not include dividends and payouts. So the total return for the group is a bit more.

Fourth, I live in the US so I track my portfolio in US Dollars. Someone following my picks and residing in another country may see results better or worse than mine.