Epiphany Investing

Searching Out the Optimal Portfolio of “Revelation” Stocks

Trimming Freeport-McMoRan (FCX) in Secular Trends Portfolio; Thanks For the Crazy Ride

Posted on | June 12, 2009 Time: 7:41 am |

The next few trading sessions will constitute what is, for me, a rash of trading as I adjust the allocations within the Secular Trends Portfolio. For readers who have been wondering why it’s been so quiet around here, I offer my apologies for not being able to speak with you more frequently.

I took on some research work that prevented me from publishing research & investment advice here at Epiphany Investing. In this economy, I had to go with what paid the bills. While this is my labor of love, goodwill and passion are surprisingly not currencies accepted by most institutions.

But I am back with fervor, with much content to publish over the coming weeks. As to the Secular Trends Portfolio, there was little I wanted to change in the first place. That was the intent from the beginning - low turnover, big themes, long holding periods.

So far the fund’s performance (23% alpha and climbing) has backed me up, despite everyone and their uncle proclaiming that “buy and hold is dead”. I would counter, “only to those with fragile convictions“.

That said, my allocations have moved away from their intended targets as some stocks have performed marvelously while others have languished. Freeport (FCX) has certainly been one of the former, up over 200% from the lows of December when the company announced it was suspending the dividend. I noted at the time that it was likely to be the stock’s lows, and am thankful to have been correct and not dumped shares earlier when all the voices were crying that we’d never see $2.00 copper again.

FCX has now become more than 8% of the Secular Trends Portfolio, and while I continue to like the company’s exposure to a leading indicator (copper) and a natural inflation hedge (gold), 8% is simply too high and there are finally some other stocks that I find compelling enough to rotate in.

Blowing out the entire position (1540 shares) at $59.62, and booking a profit of 60%. I might be back, but for now the reflation trade (which I was insanely early on) has become too mainstream, which to me says that the kegs are nearly tapped and the smart folks have already had their glass of water, taken their aspirin, and gone to bed.

Next up will be some stern evaluations of my pharma exposure, more trimming, and some important additions to capitalize on what I see as Phase II of the new economic landscape.

My 100% transparent ledger will be re-posted later in the day, so that all can see that there are no shenanigans or cherry-picking going on here. The financial interwebs have far too much of that going around lately, and frankly I’m sick of it. Here at Epiphany Investing, I aim for simplicity, honestly, and transparency. Most other sites/blogs/compounds seem to only promote my ability to get a migraine or a seizure from flashes, pop-ups, and useless eye & ear candy.

Ryan Barnes

More on this topic (What's this?)
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Freeport-McMoRan Is Off to the Races (Contrarian Profits, 8/6/09)
Sold FCX September 55 Naked Puts (My Trader's Journal, 8/14/09)
Read more on Freeport-McMoRan Copper & Gold at Wikinvest
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Category: Basic Materials, Metals, Mining, Secular Trends Portfolio
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