Category Archives: $USG

2CentView performance in 2014…

The 2CentView portfolio was up 12% fo the year, which matched the S&P500 but well above the FTSE100 (flat).

The portfolio ended the year 75% US and 25% UK 0% Europe – mainly because the US was the only market showing real jobs growth and a rising stock market – the model also showed many more opportunities in the US than outside the US. The exposure to USD/GBP exchange rate is also something to keep an eye on – sterling strength representing a buying opportunity for US Stocks – but can go the other way!

Where it did badly:
2 Core positions were savaged – Blinkx (down 90%) and $TCG (thomas cook) which cost the portfolio nearly 6% – need to do a better job managing zero cost core positions – where you can take your eye of the ball.

Europe and US House & Autos  continued to underperfrom and took losses in Deutsche Bank, HSBC and $USG and $GM Рall go cut on the 25% Stops (they continued to go lower Рexcept $GM which has come back Рthanks EBOLA!)

Also took some losses in $FUEL, $GIMO, $ICPT on the rotation out of expensive growth stocks into more low growth stocks – growth positions are the riskiest and hardest to manage as moves can be savage.

Where it did well:
$AAL- American Airlines, $SAVE did very well up nearly 100%
$FB up 37%
$CELG and $ISIS – up nearly 80%
$YHOO – up 40% – easiest trade of the year!
$AAPL – up 50%
$MS – Morgan Stanley up 30%
Rite Aid and Radian also performed well (core positions from 2013)

2014 was in general lot tougher than 2013 as the market experienced volatility throughout the year – Russia/Ukraine, EBOLA, Oil price collapse – all tested the nerves – but also represented buying opportunities.
The 2CentView strategy of taking some profits, setting stops helps build low cost positions and mitigates losses from positions not working – this really helps in managing volatile markets – and helps you sleep at night – we all have day jobs!
Overall the portfolio is up 73% since beginning of 2013 when the model and strategy was first built.
Main lesson learnt from 2014 – be more selective and if a core position drops more than 30% – start to exit – even if it is because of a malicous blog!

So 50% of the portfolio was up average of 51% =25.5% on the winners
30% portfolio down 25% = -7.5% on the losers

6% loss on core positions in $BLNX and $TCG

Net=12%

$USG FV=50, vs 33 price, good recovery play…Buffet has big stake as well!

$USG Corporatation has been losing money for past 6 years straight – but 2013 it should finally make a profits.

Companies, which start making a profit are usually undervalued even though their stock is at recent highs – which does not mean much when you have been losing money for 6 years!. The company makes building products and should benefit from a expanding US economy.

Buy here at 33.5, TP=45 for 35% upside, 27 stop for just under 2:1 risk/reward.

Buffet has a big stake in this company and believes in the turnaround which should provide solid support for the stock. So should you!

2CentView plans to initiate a position in $USG today.