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Scott Wachsler
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I manage Wax Ink.net, a baseline equity research company comprised of individual investors not licensed or registered with any government agency. I have been all cap value investor and independent equity researcher for the past 30 years, and believe that patience is the key to successful... More
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Wax Ink
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Wax Ink
  • Performance - Week Ending 07/05/13 0 comments
    Jul 7, 2013 10:16 AM | about stocks: ETH, HMA, FRX, KWR, CBST, MYE, TLAB, HFC, CLF, URS

    It has been a couple of weeks at this point since the Wizards of Wall Street started screaming that the sky was falling and the only safe place was cash.

    Last week cash was not the place to be, bonds were the ticket, and indeed the yield curve on bonds has been steadily increasing.

    Admittedly I am not a bond person, as the matter of fact, I have never had a bond in my portfolio. That's not to say there are not great investing reasons not to own bonds, it's just to say, I personally am not interested in owning bonds.

    There are essentially five (5) primary reasons an investor should have bonds in their portfolio, none of which have any investing appeal for me at all.

    Having bonds in your portfolio can reduce portfolio volatility, create an income stream, preserve principal, reduce emotional mistakes, and create long-term portfolio returns.

    As I say, I don't have bonds in my portfolio at this point, and the reason is simple. I want to maintain the potential for as large an investment return as possible during my working career, and bonds simply don't fit that basic investing philosophy.

    Let me say at this point that yes, I have seen the happy little chart that shows the bondless aggressive investor and the conservative investor with 60/40 equity/bond portfolio.

    The happy little chart shows that the portfolio with bonds outperforms the aggressive equities portfolio by roughly 36% over a ten year span.

    What it does not show is that had the same $100K investment simply bought the S&P 500 Index Fund, they would have had 10.9% return over the same period having spent zero time researching stocks.

    Personally, when it comes to bonds, I'm not arguing one way of the other. I am just saying they aren't for me at this stage and I have no intention of adding them to the portfolio until I decide to retire, about 10-15 years from now.

    Hi. My name is Wax, and I am an individual investor, a working class investor, just trying to do the best I can in a world that was never intended for investors like me.

    Throughout the course of the week, I post a Daily Alert, which is my review of an individual equity. It is intended to help the reader decide if that particular equity is worth their time to research.

    The other thing I do, is let the world watch as I manage the The Wax Ink Portfolio.

    Perhaps watching me make the mistakes I make will help other blue collar investors avoid the investing pitfalls that seem to find me.

    Enjoy your weekend

    Wax

    Markets
    The Wax Ink Portfolio was up 2.2% for the week. By comparison the Dow was up 1.5%, the Nasdaq was up 2.2%, the S&P 500 was up 1.6%, and the Russell 2000 was up 2.9%.

    The Volatility Index, commonly known as the VIX, was down 11.7% for the week, closing at 14.89. The VIX is now down 2.3% for the year.

    Year to date, the Wax Ink portfolio is up 10.9% while the Dow is up 15.5%, the Nasdaq is up 15.2%, the S&P 500 is up 14.4% and the Russell 2000 is up 18.4%.

    Breakdown
    The portfolio breakdown remains the same, with roughly 70% of the portfolio in equities, 30% of the portfolio in cash, and 0% of the portfolio in bonds.

    Research
    I finished baseline equity reviews on the following companies during the course of the week. My rating follows the ticker symbol.

    Ethan Allen Interiors, Inc. (NYSE: ETH) - No Investment Interest

    Health Management Associates, Inc. (NYSE: HMA) - No Investment Interest

    Forest Laboratories, Inc. (NYSE: FRX) - Loss of Investment Interest

    Quaker Chemical Corporation (NYSE: KWR) - No Investment Interest

    Holdings
    This week's moving on up stocks were drug maker Cubist Pharmaceuticals, Inc. (Nasdaq: CBST), up 12%, plastic container maker Myers Industries, Inc. (NYSE: MYE), up 6%, and communication equipment maker Tellabs, Inc. (Nasdaq: TLAB), up 6%.

    This week's floaters in the bunch bowl stocks were oil refiner Holly Frontier Corporation (NYSE: HFC), down 7%, iron ore producer Cliffs Natural Resources, Inc. (NYSE: CLF), down 4%, and engineering contractor URS Corporation (NYSE: URS), down 3%.

    Not Performing
    The top portfolio non-performers remain communications equipment company Tellabs, Inc., down 61% since being added to the portfolio, iron ore company Cliffs Natural Resources, Inc., down 53% since being added to the portfolio, and garage door/telephone headset maker Griffon Corporationdown 34% since being added to the portfolio.

    Wax Ink is a baseline equity research company comprised of individual investors NOT licensed or registered with ANY government agency.

    Disclosure: I am long CBST, MYE, TLAB, HFC, CLF, URS.

    Themes: Investing Ideas Stocks: ETH, HMA, FRX, KWR, CBST, MYE, TLAB, HFC, CLF, URS
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