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2015: The Good, The Meh, And The Ugly - Part 2

|Includes: AAPL, COST, Facebook, Inc. (FB), INTC, STR, ZTS

2015: The Good, the Meh, and the Ugly - Part 2

To figure out whether you should listen to what I write or ignore me, give Part 1 of this three-part series, where I introduce myself to Seeking Alpha, the once-over.

The Good: Well, there was that Nvidia thing (see Part 1). Probably the other two best things that happened on the year were long-term positions in the storage space REITS, especially Public Storage (PSA) and Extra Storage Space (EXR). I'm quite bullish on storage even into the new year. I think these stocks are a bit stretched right now and am not a buyer at these price points.

Population is still booming, and that means more mobility and more need to park our things. I think that through real estate boom and bust cycles, the need for storage will continue to grow.

The world of things has been in a hard deflationary spiral, due to globalization and networked commerce, but once we own all these things which cheap manufacturing has given us, we don't give up on them easily. Even if you lose your home, you still need a place to park your shit.

Other good things included sitting on Facebook (FB), Costco (COST), and Intel (INTC) through thick and thin. One of the things I'm trying to commit to, since crossing the half-century mark recently, is making more commitments to buying and holding investment. And adding to winners, which always sounds easier than it actually is....

Sometimes buying and holding is not the most opportunistic approach to the market, in my opinion. When it works, it's marvelous. I like it when I have the stomach to hold on to a stock long enough to play with house money. But...

...there's nothing I hate more than watching a stock make a multi-year round-trip and leaving all that capital appreciation money on the table, just to collect some measly dividends! There. I said it.

The Meh: And that brings me to the "meh" moments of the year. I sold a multi-year position in Apple (AAPL) and will look for a better entry point to re-initiate. This stock has gone through so many gyrations. And I've taken one or two of these annoying round-trips on Apple over the years. I didn't care to take another. Although I would not call it "broken" by any means, I do anticipate a slow drip of downward pressure for awhile.

Apple has revolutionized several major industries and will remain a cash cow. But I don't see much innovation on the horizon. Where they once led, they now seem to follow. On a price-earnings basis, the stock seems inexpensive, but on a psychological basis, it's a "meh." Listen to the market.

My other "meh" position right now is Zoetis (ZTS), the animal medical supply company. It closed up for the year, but I was hoping for more from this Pfizer spin-off. It has been under attack by the corporate raiders, including Pershing Square, who threatened to force a buy-out of the company, but instead all that has happened is...nothing. The company just hit a hamstrung state of stasis. I'm still holding this one to see what shakes out, but whenever a stock doesn't behave as anticipated, it gives me that uneasy feeling.

I thought the value of the holdings would be unlocked with the spin-off, but the ownership by corporate raiders has resulted in too much attention being focused on poison pill strategizing and uncertainty, rather than running the core business. I'm trying to listen to the market on this one, but it's a whisper, not a shout.

The Ugly!: Energy was rocking in 2014! Does anyone remember that?? What a party. Then 2015 showed up and called the cops. Even though I put on some shorts in energy, it wasn't nearly enough to mitigate the longs I held in Teekay, Vanguard, Brookfield Infrastructure, and Blackstone. What a beating. I even averaged down in Teekay, which I hardly ever do, but I thought the LNG space might be a safe oasis in a desert storm. But the hits kept coming. Now we have entered the no-man's land of energy. I took some heavy shelling on all four of these stocks this year, trying to bottom-fish, while our (ahem!) "friends" the Saudis continued running the American energy industry into the ground.

I do think it is time to sharpen our pencils and start a watch-list in some of these beaten-up energy names. I don't think the shelling will be over in the oil patch until Big Oil breaks. Exxon, Chevron, Royal Dutch - these have been held aloft by the true believers and yield-seeking investors. And by their gigantic piles of cash. I would like to see them break down before I jump in. There are values out there already - my watchlist contains Tesoro, Oneok, Linn Energy, QEP Resources, Kayne Anderson, and Western Refining. I'm thinking about building a basket of these beaten-up energy stocks. I'm even tempted by Teekay at these levels, but the wounds are too fresh.

Full disclosure: I did initiate a position yesterday in a mid-cap name, Questar (STR). I'm hoping this forms up a channel between 19-22. I think the shelling is overdone, and the 4.31 dividend yield looks safe. They are a utility stock which has been knocked down by the downdraft in energy and the perception that they are energy explorers, which, while true, is not their core business.

Disclosure: I am/we are long FB, INTC, COST, ZTS, STR.