John Cofran's  Instablog

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
  • Current Market And Portfolio Analysis 0 comments
    May 16, 2012 11:12 AM | about stocks: SPY, HYG, AAPL, MSFT, OHI, T, BDX, K, PPL, RGP, ETP, QCOM, AVGO, INTC, AFL, NLY

    Much has happened in the markets since my last post: we have seen a new multi-year high in the (NYSEARCA:SPY) and (NYSEARCA:DIA), European uncertainty has again dominated the markets and Facebook announced its IPO. A recent 6.4% decline in the (SPY) has left the benchmark index up just 4.37% on the year. My flagship fund at Cofran Capital remains up 9.0% year to date.

    While my top holding have not changed much, I have adjusted several sector allocations in recent days and weeks. Recent additions include (NYSE:PPL), (NASDAQ:WIN), (NYSE:ETP), (NYSE:RGP) and (NYSE:CTL). In addition, I doubled my position in (NASDAQ:CSCO), closed my position in (NYSE:FE) and halved my position in (NYSE:T).

    I have taken hedges off several positions in which price declines in the underlying stock have led to significant profits in the options sold against them. These include (NYSE:CMI), (CSCO) and (NYSE:TIF). In addition, hedges on (NYSE:K), (NYSE:AFL) and (NYSE:CSX) are set to expire this week. At present, the portfolio is hedged against a 4.5% market decline. I will continue to employ hedging strategies to minimize risk of further pullbacks in stocks who have experienced near-term strength.

    For now, the market appears to be perched between 1,320 and 1,360. A significant catalyst in either direction could push us out of this range in the short-term. I see downside potential to 1,280 and upside to 1,440 over the next 3 - 4 months. Longer-term, I am growing slightly more cautious than I have been in the last 18 months.

    Overall Sentiment: Near-term range bound.
    Portfolio Yield: 5.75%
    Projection: Consolidation (+/- 5%) around 1,365.

    Top 5 Positions:

    1. iShares High Yield Corporate Bond (NYSEARCA:HYG)- 15.4%
    2. Apple (NASDAQ:AAPL)- 5.8%
    3. Microsoft (NASDAQ:MSFT)- 4.7%
    4. Omega Healthcare Investors (NYSE:OHI)- 3.3%
    5. SPDR Barclays High Yield Bond (NYSEARCA:JNK)- 3.0%

    Disclosure: I am long HYG, AAPL, MSFT, T, OHI, PPL, WIN, ETP, RGP, CTL, CSCO, CMI, TIF, K, AFL, CSX

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