Portfolio One Updated February 2012

Portfolio One, our longest term portfolio, did well in the early part of 2012 and is worth $23,270 on an investment of $16,500, for a gain of 41%, or about 6.1% / year over the life of the fund (this is approximate since the cash flows have been coming in across the life of the fund).

Earlier in 2011 we sold Ralcorp (RAH) for a gain on takeover rumors (it’s stock price has stayed at that level or risen even thought the takeover did not occur) and sold TEVA the Israeli drugmaker that started on acquisitions (which usually destroys value for the acquirer) and also could offset some of the gain with a loss. We left the proceeds from TEVA in cash just to reduce risk a bit although we may put this money back to work when the 2012 investment money is added again.

It is still early but all the new picks seem to be doing well (Statoil, Wal-Mart, and Philip Morris International) and the Chinese oil companies have boomed again. The only “dog” so far that we are continuing to watch is Urban Outfitters, whose CEO left a while ago and they are now planning on re-tooling their merchandise; if this happens the stock might rise else it will be time to permanently bail out.

Of the stocks sold in the past they all seem like good moves in hindsight (phew!) except for the selling of Amazon (AMZN) although the sting of this sale is partially offset by the fact that this money was reinvested into some of our best performers, such as P&G. In hindsight (always 20/20) we sold Netscout (NTCT) a bit early too but the tech plays are very volatile.

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