Investment Performance May 2010 (-8.13%)

This is an ongoing monthly update on how our equity investments are performing. Please see this background on the investment tool I developed and how I am using it to track our performance against a benchmark to measure our progress or lack thereof.

May Highlights:

  • May turned into one of those months where volatility skyrocketed and I started deploying more capital than usual to try and take advantage of the sales going on in the stock market. In truth I had been sitting on the sidelines for awhile and was a little trigger happy deploying capital. Between the last 2 days of April and the first week of May I invested all the cash I had in my brokergae account and scrambled to reload as investments continued to get more attractive as the month went on.
  • I perhaps foolishly picked up another 100 shares of Radian as the stock began to significantly correct as earning were release that were significantly lower than everyone expected and the company announced an equity offering to raise funds. In hindsight I wish I hadn't made the investment as there were more attractive opportunities for the cash later in the month, but we will see how it works out.
  • Our taxable investment performance performed very comparably to our benchmark (-7.75 vs -7.77%) despite a poor performance by retirement IRA mutual fund holdings (-8.93%).
  • I started a position in Dryships, Inc. at my brothers urging to take advantage of the continued economic recovery.
  • I continued to invest small amounts in Fairfax Financial as I would like to continue to grow ownership as Im still drooling over this company. I expect it will eventually be our #1 holding assuming it continues to remain attractively priced.
  • I added to our position in Genworth in the finally day of the month as the stock dropped significantly lower thinking the long term prospects of Genworth still look very appealing.
  • Additional purchases include Argo, Vanguard TotalMarket Index, and Bank of America.
  • Our recent monthly returns were: Jan 09 -4.98%, Feb -9.94%, Mar +8.45%, Apr +10.88%, May +4.65%, Jun +0.89%, Jul +9.94%, Aug +4.36%, Sept 3.15%, Oct -2.34%, Nov +5.83%, Dec +1.85%, Jan '10 -2.34%, Feb +2.25%, Mar +5.88%, Apr +2.54%, May -8.13%.....

May 2010 Investment Report:

The only equity investments not covered are:
1) my 401k which is invested in institutional index funds through my employer that I haven't found a tracking symbol for.
2) investments roughly worth less than $500, simply because I don't have the time and energy to keep up with them. I am thinking I will sell these off at some point and add the proceeds to my current investment portfolio because they are too much work to track.

Related in Stocks:

Chairmen Letters to Shareholders (Mar 09, 2014) Its that time of year again --the close of fiscal years means an overload of annual reports including Letters to Shareholders. Two annual letters that I read each year are those from Berkshire Hathaway (Warren Buffet) and Fairfax Financial (Prem...

Investment Performance January 2014 (-2.94%) (Feb 23, 2014) January 2014 Investment Report: January Highlights: January was a bad way to start out the year, but our portfolio performed slightly better thank our benchmark (-2.94% vs -3.17%). We made our regular monthly investments in our Roth IRAs, and some...

Investment Performance December 2013 (+2.20%) (Jan 10, 2014) December 2013 Investment Report: December Highlights: December was another subpar for us as our portfolio performed poorly compared to our benchmark (+2.20% vs +2.58%). We made our regular monthly investments in our Roth IRAs, and some dividends & dividend reinvestments....

Comments (3)


Just curious as to why you are so high on FairFax Financial?

MFJ,
The business as a whole really resonates well with me. They have a top-notch management team, a well run business that I can understand, a fairly consistent return on an owner's investment, and the market's priced the company currently so that you could anticipate a 15% annual return on your investment if the management team achieves their targets even if the market doesn't evaluate the business any differently (ie trade around book value).

Think of it this way - the management team believes they can achieve a 15% return on book value over the long run and the stock current trades just below book value.

Berkshire Hathaway, a very similar company, has a similar target, but trades well above book so if the company achieves its targets, but the business is valued about the same as it is today you won't nearly get as nice of a return.

I see they pay a pretty nice dividend, but they are a Canadian company that trades on the Canadian exchange so that means that you will get money withheld for Canadian taxes. I am assuming you hold this in a taxable account (vs IRA) so that you can you can reclaim the money deducted in CA taxes?

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A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
Current Net Worth: $1,574,185

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