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John Cofran
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John Cofran is a professional individual investor and money manager with 23+ years experience, and over $15,000,000 in assets under management. He is a former Pricewaterhouse auditor with degrees in Finance, Accounting and Economics from Boston College. In addition to building several highly... More
  • 2011 Off To A Choppy Start 2 comments
    Jan 25, 2011 10:22 AM | about stocks: PFF, FE, EXC, LLY, WWE, RSH, WINN

    Thusfar, 2011 has been marked by increased volatility, with the Dow posting an average daily trading range of over 168 points, or 1.44%. Expect volatility to continue through February, which has been a weak month historically.

    Year-to-date, the portfolio is up 1.38%, trailing our benchmark by just over 1%. Primary contributors to the underperformance include our 13.5% cash position, a relatively light January dividend calendar and severe weakness in a few of our small-cap names (WWE, RSH, WINN).

    Longer term, we remain confident in our 2011 S&P 500 projections of 1,550 - 1,570, which represent a retest of the 2007 all-time highs. As such, any significant near-term market pull-backs should be seen as buying opportunities.

    We continue to position the portfolio conservatively, with a 13.5% cash position and a 7.73% yield on cost. Favored investments include utilities, telecoms, large-cap pharma, REITS, preferred stocks and high yield bonds. Greater selectivity is warranted as yields on many equity and REIT investments have come down over the past year, and increased competition from bond yields is expected later this year as interest rates rise with the recovery in the economy.

    Overall Sentiment:  Near-term cautious. Long-term bullish.
    Portfolio Yield: 7.73%
    Projection: Short-term correction of 3% - 5%. Initial S&P500 support at 1,257, further support at 1,225. Breakout to 1,400 - 1,440 in the next 6 months and 1,500+ in next 12 months.

    Top 5 Positions:

    1. Cash - 13.5%
    2. First Energy (NYSE:FE) - 5.8%
    3. iShares S&P U.S. Preferred Stock Index (NYSEARCA:PFF)- 5.1%
    4. Exelon Corp. (NYSE:EXC) - 4.9%
    5. Eli Lilly & Co. (NYSE:LLY) - 4.6%
    Disclosure: Long: PFF, FE, EXC, LLY, WWE, RSH, WINN
    Stocks: PFF, FE, EXC, LLY, WWE, RSH, WINN
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Comments (2)
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  • Giorgio
    , contributor
    Comments (177) | Send Message
    I think PFF has to go higher eventually
    LLY is approaching support at $34.50 good place to increase position
    29 Jan 2011, 07:18 PM Reply Like
  • John Cofran
    , contributor
    Comments (225) | Send Message
    Author’s reply » Giorgio, thanks for sharing your thoughts. I agree about PFF and will be increasing my weighting in it over the next several weeks. The monthly yield and appreciation should reward holders with 10%+ returns annually.


    I am also in agreement with you on LLY. To avoid over-concentration in one stock, however, I added positions in MRK and ABT this week to increase my exposure to large pharmas. I would agree, though, that at these prices one should consider a new position in LLY, especially with it going ex-dividend soon.
    30 Jan 2011, 11:36 AM Reply Like
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