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Sometimes You Win By Not Losing!

|Includes: Gilead Sciences, Inc. (GILD), JPM, MET, QCOM, V

August to October 2014 saw my portfolio dip just over 10% only to bounce back and end the quarter just a couple of points down. In November and December, my oil holdings took a dive and financial services were mixed.

I have mentioned previously that I had raised some cash and trimmed some winners back in June. In July I was as high as 20% cash which is very unusual for me. There was just nothing that I found to be of exceptional value and felt that I should just wait and see. I am currently 10% cash.

I sold my Apple shares (NASDAQ:AAPL) September 3, 2014 at $100.30 and pocketed a 55% gain in just one year. I felt that I didn't want to go into earnings owning the stock and Gilead (NASDAQ:GILD) was simply a better opportunity in my growth category. I bought 200 shares of GILD a couple of weeks earlier on August 14, 2014 at $100.29.

I started selling my oil stocks with the sale of Total SA back on July 17 because while the stock had rallied 15% since February when I first acquired the shares, but then fell back to what I paid by July. I only sold because Total SA didn't have a plan to cut their refining capacity in Europe which I felt would hold them back. It was just luck that the price of Brent declined rapidly after I sold. I also sold a number of my smaller holdings in small cap oil and gas players for no other reason that momentum had stalled and I had done well. I sold LNREF, EPS, MEI and BXE, but held on to UPL, ZAR and PTA. I felt that these were enough exposure to in that space. I had already sold my CPG back in February because I felt the companies debt would be a problem in the long term but more importantly, I didn't like that they kept issuing shares to make acquisitions and the price per share didn't rise.

These transactions reduced my oil and gas exposure to only 10% of my portfolio from almost 30%. I would say that sometimes you win by not losing.

After raising so much cash, I was on the lookout for better valued stocks and bought 1,500 of DRG.UN when the price crashed to $9.15 on July 18th. I bought 30,000 more shares of PTA when the price dropped to $ .26. I also bought 750 shares of Norbord (NYSE:NBD) Sep 16 - 18th as the price dropped to $23.56. I also added to ZAR as the priced dropped to lower my average cost. I liked ZAR because of the 10% dividend at the time. I subsequently sold all of these as the market started to break down in oil. Once Saudi Arabia announced that they would not cut production, I felt that oil still had a ways to go down and I would revisit my picks once it appeared that oil had bottomed. I sold NBD because the company stated it's dividend would be paid from cash flow rather than fixed which means any performance problems would mean a cut in the dividend.

I have been on the lookout for a good utility to own and jumped when Veresen (VSN) issued an offering at $16.40. I bought 2,000 shares on September 23rd because it's the only utility I own. VSN is developing the Jordan Cove LNG plant which is the future of NG. I hung on to my Cenovus (NYSE:CVE) because I felt the dropping CDN$ and CVE production growth would eventually show up on their bottom line. They are the lowest cost oil sands producer and also own downstream assets in partnership with Phillips 66.

My goal was to rotate out of oil and into more stable high dividend payers to ride out any coming storm. While my bank shares have suffered in Canada, I have done well with my growth and dividend payers with V, JPM and MET. As the CDN$ has sunk, my US shares provide both growing income and dollar hedging.

Moving forward, I continue to look for large cap value stocks that have been beaten up by the market as well as some solid growth plays. My preference is to buy the best in category company and not diversify too much. Not every sector performs well at the same time.

Here's how the year looks, returns don't include dividends. This chart does not indicate actual returns, just performance this year. US stocks are quoted in US$ and are held in a US$ account.

STOCK

SYMBOL

DEC 5/14

JAN 1/14

Gain/Loss

AGRIUM INC

AGU

$110.50

$97.57

12%

BANK OF NOVA SCOTIA

BNS

$66.20

$66.01

0%

BCE INC

BCE

$52.18

$45.75

12%

CENOVUS ENERGY INC

CVE

$24.38

$30.21

-24%

CIF GL EQ-A

CIF843

$22.91

$20.60

10%

DREAM GLB RL EST

DRG.UN

$8.30

$8.70

-5%

DREAM OFFICE REIT

D.UN

$25.60

$28.74

-12%

GILEAD SCIENCES INC

GILD

$104.58

$75.21

28%

JP MORGAN CHASE & CO

JPM

$62.70

$58.21

7%

METLIFE INC

MET

$56.34

$53.19

6%

QUALCOMM INC

QCOM

$73.37

$73.32

0%

ROYAL BANK OF CANADA

RY

$80.40

$71.59

11%

TORONTO DOMINION BANK

TD

$54.25

$49.44

9%

VERESEN INC

VSN

$17.21

$14.32

17%

VISA INC

V

$263.35

$221.01

16%

Disclosure: The author is long AGU, BNS, BCE, CVE, GILD, JPM, MET, QCOM, RY, TD, V.