Since February 1, 2013, I believe the Buy & Hold, Value model has been a reasonably solid performer. I continue to work the holdings, trying to make sure that each position is performing well both with technical strength and no evidence of any fundamental problems, in my opinion.
In addition, I briefly held positions in Builders FirstSource (BLDR) and Ebay (EBAY) that were closed out when they traded poorly after their recent purchase. New positions were established in an old favorite of mine, Church & Dwight (CHD), the consumer conglomerate, Sysco (SYY), the food distributor, and Packaging Corporation of America (PKG). I believe these three are solid, dividend-paying companies that hopefully can stay long-term in this portfolio.
During this period, another 'blue-chip', Heinz (HNZ) became an acquisition target of Warren Buffett and 3G, the Brazilian investment group. The stock was sold after a relatively short period of ownership.
I hope to manage this portfolio with a relatively steady core of more established dividend-paying companies with good growth prospects with a handful of smaller, more speculative issues that may afford additional investment performance for the model.
Looking forward into 2013 I see lots to 'worry' about including the current sequestration fiasco, the debate over the ongoing budget including an approaching debt ceiling debate in Congress.
International events offer additional concern including the awakening North Korean aggressive posturing and the ever-present concerns over a nuclear Iran and the possibility of additional conflict in the mideast. Syria has been in a prolonged civil war and our departure from Iraq and soon Afghanistan may also have unintended consequences.
That being said, this economy and the stock market continues to climb that 'wall of worry' to new highs. Our domestic economy appears to be rebounding as interest rates and inflation threats appear subdued and the housing market is returning to a more closely 'normal' situation.
One of my strongest holdings remains Lumber Liquidators (LL) which is riding the housing construction/remodeling rebound, contributing positively to the models’ performance so far.
I remain very intolerant of losses in individual positions and am willing to part company (and revisit) any holding that fails to live up to my own expectations. This model is my longest-running on Covestor and is approaching a four year anniversary with this innovative organization.
I thank all of you who have found this model to your liking and I look forward to continuing to work at improving investment return in the future.
The investments discussed are held in client accounts as of March 1, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.
Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.