The Holiday Portfolio: Labor, Indeed

As we use this holiday Monday to take a look at the Holiday Portfolio, it's hard to imagine a better descriptor than "labor" for these markets.

Call it what you want -- the subprime crisis, the housing bubble or the liquidity challenge -- the month of August was laborious for nearly all investors. As one longtime fund manager (and good friend) said Thursday, "Challenging markets come and go but truly confounding markets like this are incredibly rare."

Indeed! If anything can be said of August 2007, it's that it has been confusing: What should work, hasn't; what shouldn't work hasn't, either.

That said, it's markets like this that provide longer-term opportunities. Moreover, they can make you a better investor.

The Holiday Portfolio has experienced its share of challenges since the July 4 holiday. Before we take a look at the specifics, let's review the purpose of the portfolio.

Good or Bad: 365 Days

The concept behind the Holiday Portfolio is straightforward: I select a group of five stocks that I believe deserve watching over the next 12 months, and I follow them -- regardless of their performance -- throughout the year. I'll revisit the portfolio on each market holiday and, at times, make comments about the stocks in RealMoney's Columnist Conversation. The only way a stock is removed from the portfolio is if it merges with another company or ceases to trade on a major exchange.

The portfolio serves two purposes. First, it follows the fundamental progress of a group of stocks over a lengthy period of time. My hope is that the portfolio will serve as a forum for in-depth discussion of investment decisions and company strategy, and reinforce the importance of ongoing portfolio analysis. Second, it provides an opportunity to look at both short-term trading strategies and longer-term investment strategies with the same stocks.

Today, we review the five stocks selected at the beginning of 2007 and the outlook over the coming weeks.

Leaders ...

The leaders in this edition of the Holiday Portfolio have remained at the head of the pack most of the year.

	Recent Price	Price 12/31/2006	Price Change	Current Dividend	Current Yield	Yield at Cost
Altria (MO:NYSE)*	$69.25	$64.41	7.51%	$3.00	4.33%	4.66%
Archstone-Smith (ASN:NYSE)	$58.29	$58.21	0.14%	$1.81	3.11%	3.11%
Bank of America (BAC:NYSE)	$50.21	$53.39	-5.96%	$2.56	5.10%	4.79%
Carrizo Oil & Gas (CRZO:Nasdaq)	$38.73	$29.02	33.46%	none	0.00%	0.00%
Microsoft (MSFT:Nasdaq)	$28.45	$29.86	-4.72%	$0.40	1.41%	1.34%
Unweighted Average			6.09%		2.79%	2.78%
S&P 500			2.70%
*Adjusted for Kraft Transaction Source: Company Reports, Bloomberg, TSC Research