Christopher Edmonds
As a kid, there was nothing worse on the Fourth of July than when, with great anticipation, I lit the fuse of a gross of Black Cat firecrackers, ran like a gazelle and waited for the big bang. And waited.
And waited. Nothing -- a pack of duds. Nothing describes this tape better: lots of waiting and lots of duds. Soaring commodity prices in the face of weakening consumer confidence and an anemic economy combine to provide little good news or optimism for equity investors. The same is true for the holiday portfolio. So far, a bunch of duds. For these stocks, the best thing about the Fourth of July is they won't be trading. Before we take a look at the portfolio, let's quickly review the rationale for the holiday portfolio. Taking a Long View The concept behind the holiday portfolio is simple: 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 periodically 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 long period of time. My hope is that the portfolio will serve as a springboard 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. Disappointing Results One of the early lessons I learned is a mantra made popular by Marty Zweig: "Don't fight the tape." Indeed, the holiday portfolio and those who have remained blindly long are feeling the heat this Independence Day.
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