• Enlightened-American Portfolio: +33.5% YTD (my actual IRR, including cash balance)
• DJIA: +10.7%
• Nasdaq: +29.7%
• S&P 500: +14.7%
• DJ Wilshire 5000: +16.9%
• Russell 2000 (smallcap): +12.7%

All the major indices, except for the Dow Jones Industrial Average, booked losses ranging from 3% - 9% for the month of October. Our portfolio lost half a percentage point, despite the volatility in energy stocks. Much of the steady performance was attributable to the continued build of cash. In some instances, such as Intel (INTC), these cash-outs were forced as our call options expired in-the-money.

• No new positions taken.
• We were called out of our Intel position at $16 per share. We missed roughly 20% upside due to writing this call option but sometimes that happens when writing options. At the time, we wrote the option, Intel was trading around $15 1/2 and we had successfully sold a string of INTC calls to good benefit. While it may be easy to rue this move in hindsight, investors must not forget the lessons of this bear market -- cash on hand may be a less desirable but never regrettable option.
• Our Yamana Gold (AUY) position was reduced by 25% due to being assigned on our $9 Oct calls. We have been writing $9 calls on AUY for a year, thus booking good gains before getting called this past month. Gold mining stocks in general are good candidates for options-writing due to their historical volatility, which means bigger upfront premiums and relative assurance that general drops in stock prices will be reversed at some point in the near future.
• I reduced one position in the current portfolio by 25%, the details of which are revealed only to premium subscribers. Find out more about Enlightened American Premium here.

Our cash position currently comprises 46% of the total portfolio. While I am not enamored with this situation, I continue to hold cash rather than compromise our standards for investing. During huge rallies, it is easy to get caught up in the euphoria and feel a subtle urge to join the party. However, Seth Klarman has proven in the past that it is possible to outperform the markets even while holding huge chunks of cash. In fact, that is precisely what we have done this year, as the Enlightened American portfolio is now beating all the major indices, including the red-hot NASDAQ, despite 30%+ cash holdings for most of this year.

With Marc Faber making the rounds and predicting that the US$ will go to zero, this week's screen for foreign stocks seems particularly timely. Unfortunately, investors looking to make a move now must contend with a very weak dollar, which makes overseas stocks more expensive. The specific criteria I used are listed below:

• (Domestic / Foreign = Foreign)
• (Current Year Free Cash Flow > 0)
• (Exchange not = OTC)
• (Dividend Yield % > 3)
• (Return on Assets % – Trailing 12 Months >= 15)

View complete results of the screen here in table format.

Investors imbue analysts with high levels of credibility at their own risk. Wall Street analysts communicate in their own cryptic language that may impersonate English but rarely means what it says. When is a buy a buy and a hold a sell? In his book, Full of Bull, former Wall Street analyst, Stephen McClellan, divulges many of the open secrets about analyst-speak that gets retail investors in trouble.

This analyst double-speak is the basis for this week's screen. Analysts are often stuck upgrading or downgrading a stock after the big move in the stock has already happened. Here was the criteria for the screen:

This was the theme behind my latest stock screen. After the massive run-up, investors need to be careful that laggards were not left behind for good reason. So I screened for cheap stocks relative to their expected growth rates while requiring high return on assets (ROA) and return on equity (ROE). I added an additional requirement that the stock be within 50% of its 52-week lows to make sure I don't buy in at the top. The specific criteria are listed below:

• PEG < 1;
• ROA > 10%;
• ROE > 15%;
• Positive revenue growth in current and next fiscal year;
• Positive EPS growth in current and next fiscal year;
• Within 50% of 52-week low;

As of October 2nd, the screen turned up nine names. You can view the list here, complete with valuation figures and business summaries.

THE ENLIGHTENED-AMERICAN PORTFOLIO SPREADSHEET

• Enlightened-American Portfolio: +34.0% YTD (my actual IRR, including cash balance)
• DJIA: +10.7%
• Nasdaq: +34.7%
• S&P 500: +17.0%
• DJ WIlshire 5000: +20.1%
• Russell 2000 (smallcap): +21.1%

September was kind to our portfolio. Obviously, I am pleased with the 34% return for the year but I am more gratified to have generated these returns while holding ample cash throughout the year. Currently, cash available for investment sits at 37% of investment capital. The large cash position has built up due to a flurry of activity last month:

THE ENLIGHTENED-AMERICAN PORTFOLIO SPREADSHEET

• Enlightened-American Portfolio: +34.0% YTD (my actual IRR, including cash balance)
• DJIA: +10.7%
• Nasdaq: +34.7%
• S&P 500: +17.0%
• DJ WIlshire 5000: +20.1%
• Russell 2000 (smallcap): +21.1%

September was kind to our portfolio. Obviously, I am pleased with the 34% return for the year but I am more gratified to have generated these returns while holding ample cash throughout the year. Currently, cash available for investment sits at 37% of investment capital. The large cash position has built up due to a flurry of activity last month:

With gold hovering over $1,000 per ounce, now seems like a good time to check in on two gold mining stocks I hold in my portfolio: Minefinders (MFN) and Yamana Gold (AUY). Long-time readers will know that I have been writing call options all year on these two stocks to good profit. With the recent rally, it may be time to make a clean exit.

The original thesis on Minefinders was a nice deposit on the cusp of production in a friendly jurisdiction. The market seemed to be overly wary of the company's non-producing status, but I was confident that management would bring their Dolores property into production. The risk was determining if management could meet its projection of bringing Dolores online with resources on hand. Then the credit crisis hit along with setbacks and blockades in Mexico and the company needed more capital.

When you see cash flow, you've got to buy it.

I read that statement in an interview with a money manager in Barron's last week and it stuck with me. So this sentiment provides the theme behind this week's stock screen, which emphasizes free cash flow (FCF). Here were the specific criteria I used for the screen on the Morningstar site:

One of the perks of being a certified Seeking Alpha contributor is access to various research tools like Zacks.com. Zacks is an investment research service primarily oriented toward momentum and growth investing so their recommended stocks tend to be closer to 52-week highs than to the lows. Nevertheless, I find their in-depth company research reports to be more informative than those offered by Morningstar or S&P.

While Zacks prefers stocks with strong earnings and stock price momentum, I took the inverse approach, screening for stocks with bad Zacks rankings (1 equates to strong buy and 5 a strong sell) but strong business models to overcome any short-term hindrances. We're looking for princes disguised as toads so I added strong ROA and price-to-cash-flow requirements. Here is the specific criteria used:

A reader asked in an email, "if one wanted to invest in Grains, what symbols [do] you recommend?"

I don't know if I would necessarily recommend any symbol. The two stocks that I am most familiar with in this arena are the Rogers Agricultural Index (RJA) and the PowerShares DB Agriculture Fund (DBA). I once owned RJA so let's start with that one first.

• Enlightened-American Portfolio: +23.7% YTD (my actual IRR, which lags the equal-weighted returns) (See portfolio spreadsheet)
• DJIA: +8.2%
• Nasdaq: +27.4%
• S&P 500: +13.0%
• DJ WIlshire 5000: +15.4%
• Russell 2000 (smallcap): +14.5%

The broader markets look pricey to me at this stage. The debate rages on about whether the indices can hold these levels without a sustained, organic economic recovery. Is the current rally 1930 all over again or 2002? Who knows?

I have been looking to deploy capital in areas non-dependent on a positive resolution to the aforementioned debate. After studying David Swensen's Pioneering Portfolio Management, I am more convinced than ever on the need to properly diversify my investment capital, even as some notable endowments back away from Swensen's strategy. Of course, retail investors lack access to many of Swensen's alternative asset classes. However, readers may want to consider Warren Buffett's strategies during his hedge fund days and in particular, his "workouts" category as a model for diversification.

The Fairholme Fund have bounced back nicely in 2009, showing a 30% gain for the year. Quick summary follows but you can view Berkowitz's portfolio moves in this spreadsheet.

• Their new positions seem to indicate that Berkowitz has changed his mind regarding some lukewarm comments about Berkshire Hathaway's (BRK.A) low growth potential a while back. He added about $150M to BRK.A and BRK.B positions. Fairholme's other notable new position is yet another ode to the equipment rental industry, RSC Holdings (RRR). They already have positions on industry peers, United Rentals (URI) and Hertz Global Holdings (HTZ). Berkowitz has mentioned his attraction to the industry's counter-cyclical free cash flows on numerous occasions.
• The only noteworthy divestiture was Canadian Natural Resources (CNQ). Berkowitz made a great sell call on the energy space near last year's peak (which I should have heeded!) and continues to avoid the space.
• Sizable accumulations during the quarter included the aforementioned HTZ, Humana (HUM), Spirit Aerosystems (SPR) and St Joe (JOE). HUM and SPR seem to be company-specific plays since the fund sold sizable chunks of related players like Boeing (BA), Northrop Grumman (NOC), Wellpoint (WLP) and UnitedHealth Group (UNG). As for JOE, Berkowitz has been a long-time (and long-term) bull on its play in Florida land development and continues to stand by that view with conviction.
• Fairholme decided to book the quick gain on American Express (AXP), reducing that position by over 70% as the stock rose.

Mohnish Pabrai's fund is no longer tracked in the pages of Barron's but I would guess his funds are also rebounding better than the broader market. He held his hand for the most part during the quarter as shown in this spreadsheet of Pabrai's holdings.

With the recent market rally, 2009 Q2 13F filings hold the allure of possibly yielding some indication as to what these respected managers may think of the rally.

You can view Seth Klarman and Baupost's hedge fund portfolio changes in spreadsheet form. As always, the caveat with Klarman's 13F filings is that Baupost plays in many different sandboxes (for instance, their recent participation in bailing out CIT Group). Thus, a lack of activity may not necessarily indicate a bearish slant -- the fund could just be pursuing better opportunities in other arenas than equities.

In a recent post, I posited that markets did not look cheap from either a valuation basis nor an economic outlook standpoint. However, that does not mean I stop looking for investment opportunities, only that the search may not be as fruitful as I would like.

So this week's screen focuses on looking for cheap stocks. We don't want just any old cheap stock -- there would be a lot of trash to sift through. In this case, I'm using Standard & Poor's STAR stock rating to filter out poor prospects. Don't get me wrong: I am not endorsing S&P as a stock analysis tool and their process for assigning ratings is somewhat vague. It's possible that S&P got their rating wrong on each and every stock. That's why I do my own research on any interesting results (and recommend you do the same so see the disclaimer). The screen is simply an idea generator to identify attractive investment prospects.

Following on my recent post that revealed the rise in American consumption predicated in large part on ever-rising healthcare costs, I decided to question my own view that US consumers would drastically retrench. Contrarian thinking is key to making good investment decisions -- we should apply it to our own views once in a while.

My latest screen, conducted via the Morningstar website, focused on companies in the consumer goods sector. Specifically I used the following criteria:

As part of our weekly podcast, my colleagues -- myself, CGI co-founder and former Motley Fool analyst, Tom Jacobs, CGI Growth & Value Focus portfolio manager Jason Fitnich and former author of the Circle of Competence blog, Jeff Annello -- discussed the cold war, if you will, between Microsoft (MSFT) and Google (GOOG)

Google announced its new Chrome operating system, a web-based application. Chrome's dependence on internet access may limit its ability to challenge Windows, as consumers still find on-site access to files and programs useful.

In dedication to my recent posts on value investing vs. trading strategies, I decided to focus this week's screen to the market's favorite word: growth. Specifically, the criteria used was positive revenue growth for the next fiscal year. Of course, this does not translate to earnings growth but management teams should have figured out there's a recession and cut the cost side.

In addition to revenue growth, we are looking for companies that can thrive in this recession and take market share. These qualities are hard to quantify but I used ROE and ROA as measures of company quality, with the added kicker of a low debt-to-capital ratio so the company theoretically will have resources to pounce on opportunities.

Regular readers of my blog know I place a premium on cash yields on my portfolio. But this emphasis on dividends has gotten me into trouble in the past. Yes, I'll say it: "My name is Davy Bui and I am a recovering yield pig."

My past experiences with stocks like American Capital (ACAS) and Penn West Energy Trust (PWE) have led me to focus more keenly on the sustainability of a dividend and not let the high yield blind me to problem areas. Also, following up on my last post on the market's prospects going forward, prudent, long-term investors may want to consider building a portfolio of reliable dividend plays to generate return if we suffer through a prolonged down or sideways market. As such, my latest screen honed on these stocks using the following criteria:

Continuing the theme I discussed yesterday with Seth Klarman and Meryl Witmer's filings, Bruce Berkowitz's Fairholme Capital was strangely subdued (here's the spreadsheet) despite the early March market plunge:

• As with Klarman and Witmer, no new positions added (according to the 13F -- remember, incomplete information) despite new bear market lows. Instead, it seemed Berkowitz was focusing on building existing positions, especially American Express (AXP). A good move on his part thus far as the stock has more than doubled since Berkowitz increased his stake by 76%. Other sizable buying included Florida real estate play St Joe (JOE), hedge fund retailer Sears Holdings (SHLD), aerospace manufacturer Spirit Aerosystems (SPR) and rental company Hertz Global (HTZ).
• Fairholme liquidated a few small positions and reduced a wide range of holdings, perhaps to raise cash for their best ideas and meet redemptions. The only notable sell-off was Canadian Natural Resources (CNQ), reduced 88% even though they were adding to it in Q4.

Mohnish Pabrai's rocky performance has been well-documented but a quick glance at his 13F spreadsheet suggests recent portfolio moves have been kind to him as financials and base metal miners have moved up fast in the last few weeks:

This quarter's filings are particularly interesting because they encompass the most recent bear market low which occurred in early March. So without further ado, here are my thoughts on the filings for Klarman, Witmer and Einhorn. You can view Baupost's portfolio changes in spreadsheet view using this link:

• Strangely enough, Klarman did not add a single new equity or option position despite the market plunge in early March. As mentioned many times before, 13F filings are incomplete information and it is possible that Klarman favored credit or foreign stocks over domestic equities but as we'll see later on with Meryl Witmer, he was not the only professional value investor to avoid adding heavily in the first quarter.
• The most significant change in Klarman's 13F filing is the huge stake building in various CapitalSource securities (CSE). The combined equity and debt positions equate to one of Baupost's largest publicly disclosed positions.
• Baupost divested its stakes in the Diller / Malone media companies [IAC/InterActiveCorp (IACI) & Liberty Media Capital (LCAPA)] as well as significantly reducing its Linn Energy position (LINE), even as it bought more Breitburn Energy Partners LP (BBEP).

If Klarman's relative inactivity during plunging prices was a bit puzzling, Meryl Witmer's activity as shown in her 13F filing strongly resembles complete liquidation. Keep in mind that Witmer often plays in foreign markets but a quick glance at the spreadsheet shows Witmer's firm holding only 3 stocks from last quarter's 13 stocks. The 3 stocks left standing in the Witmer Asset Management filing were Interface (IFSIA), Keryx Biopharmaceuticals (KERX) and USA Mobility (USMO), with all 3 positions reduced 50% - 77% from Q4 2008. I couldn't find any news that may account for such activity but if readers have some information, please share in the comments.