Every week, I'm amazed at the quality of the analysis happening on Stockpickr. In my column from last Friday, I mentioned
several hedge funds that were posting all of their analysis on Stockpickr. I also revealed that each week I take the most interesting do-it-yourself portfolios and send them on to Jim Cramer for him to peruse.
Today I'm going to take a look at a few more portfolios on Stockpickr that have stood out.
First up is a portfolio titled
. It examines the various fears plaguing the average U.S. investor and how to potentially hedge against those fears with smart stock picks. This portfolio was created by Stockpickr member
, who points out with each stock pick the cataclysmic fear he is worried about and how that particular stock is a hedge.
For instance, he recommends the
iPath MSCI India Index ETN
, which was designed to match the performance of the MSCI India index. Here's a look at his commentary on this exchange-traded note:
Category: How to hedge against future health care and pension liabilities? In reality, this is the greatest problem. If there were no future pension and health care liabilities, one would not see the current account deficit or the "dismal" savings rate as being that big of a problem. Our ability to grow out of these future health care/pension liabilities likely lies with our ability to continue to receive cheap foreign financing -- and thus depends on the real return that can be earned on U.S. assets. Also, in regard to the current health care and pension system, the U.S. needs changes to be made. In India, the average age in 2020 will be only 29 years. Thus, there are no pension worries in India. Hedge: the iPath MSCI India Index ETN. China doesn't even give its people free health care or pension payments. Thus, there are no pension or health care liability issues in China. That being said, the average age in 2020 will be 37, just like in the U.S. Hedges: PowerShares Golden Dragon Halters (PGJ) - Get Invesco Golden Dragon China ETF Report, iShares FTSE/Xinhua China 25 (FXI) - Get iShares China Large-Cap ETF Report, the Amex China Index, the CBOE China Index, the Dow Jones China Broad Market Index, and the Halter USX China Index.
Mock Portfolio also recommends the Pimco Commodity Real Return mutual fund (PCRAX). Here's what he has to say about it:
Category: How to hedge against a continued increase in commodity prices, specifically in how they would affect corporate profit margins (through increased input costs, etc.) and lower equity prices? Fear No. 1: Continued increases in commodity prices, coupled with the possibility of slower future U.S. economic growth, lead to rapidly declining corporate profit margins and stunted earnings growth. In doing so, the U.S. equity market stutters, sending emerging markets and all other equity markets spiraling downward. Fear No. 2: This could also be a hedge against continued high oil prices (which would keep the current account deficit high), but the U.S. is no longer receiving such massive "petrodollar" inflows. Hedge: the Pimco Commodity Real Return mutual fund. This fund is not only levered to commodity prices, but also is collateralized by investments in inflation-protected bonds -- which is preferable to other funds that are just backed by simple bonds.
His other fears include the negative savings rate, the rising cost of U.S. borrowing and increasing inflation.
Two other portfolios by Mock Portfolio worth checking out are
(stocks that are in two-company industries) and
. It's all great stuff.
Another Stockpickr portfolio I like to keep track of is the
portfolio, created by prominent newsletter writer and investor Charles Mizrahi. Hidden Values focuses on companies with market caps of less than $3 billion that have high return on equity, low debt and consistent earnings and revenue.
For instance, Mizrahi likes
Florida Rock Industries
. Here's his in-depth look at the construction materials company:
The numbers that Florida Rock Industries has been able to produce in the past several years have been excellent. Net-profit margins have increased steadily from 9.7% in 2001 to 13.6% for fiscal 2005. Both sales and earnings have been compounding at double-digit rates in the past five years. The recent halt in residential construction has hit the stock price of Florida Rock hard, and in my view it seems a bit overdone. Florida Rock is not solely reliant on residential construction, doing an extensive amount of business in the commercial and public infrastructure area. It also has a competitive advantage when it comes to its aggregate business. There is a very time-consuming permit process, and strict EPA regulations make it difficult for competitors to come into the market and take market share from the company. In addition, Florida Rock Industries is a family-owned and operated business. The Baker family owns more than 25% of the common stock, and the chairman of the board and president are Baker family members. Florida Rock Industries is a good company, and a price of $35 or less per share represents a very good value. If it can grow earnings at only 14% per annum (a margin of safety that is 39% lower than its past-five-year EPS growth rate of 23% per annum), maintain a P/E of 10 and decrease its dividends to only 15% of earnings, the stock will reward investors handsomely through the next five years.
Also invested in Florida Rock Industries is one of my favorite value-oriented mutual funds,
For the rest of Charles Mizrahi's analysis, check out his
Another interesting portfolio is one created by Stockpickr member
. He has several highly speculative picks based on finding companies that are providing components of the
iPhone, as well as an interesting idea about satellite play
XM Satellite Radio
Stockpickr tip of the day
: All of the portfolios discussed here appear to be updated on a regular basis. Keep track of these portfolios by rating them with four stars to bookmark them, and you'll also receive email notifications whenever they are updated.
Additionally, member Mock Portfolio has been an active participant in the
on Stockpickr, and his economic analysis has always been refreshing and sharp. Go to his
, and on the right-hand side of the page you'll see a list of the forums he's participated in. For instance, he had some useful advice in the forum called
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.
James Altucher is a managing partner at Formula Capital, an alternative asset management firm that runs several quantitative-based hedge funds as well as a fund of hedge funds. He is also the author of
Trade Like a Hedge Fund
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
to send him an email.
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