Portfolio update

I let go half off DGP (double long gold ETF) at a paltry profit, with the market rallying like it is gold is facing a tough time (almost an exact inverse correlation with the market right now).

On the brighter side Fidelity national finance FNF is up 5.5% today after they reported last night. Though their quarter was rough (0.06c EPS on an expectation range of -0.03 to 12c), they did say that business has picked up strongly towards the latter half of the quarter.

I also started a position in Allegiant Travel ALGT, with Priceline reporting today they might get a nice booster dose tomorrow.

I also dipped into my emergency fund and transferred $2000 to India to take advantage of the high interest fixed deposit scheme I talked about earlier, I'll probabaly do a 50-50 split (1/2 in the 12% FD with Tata Motors and 1/2 in a 9.75% FD with HDFC bank).

11% annual interest !!

Tata Motors, one of India's biggest and most respected corporation is offering a fixed deposit scheme offering upto 11% interest (compounded), thats a huge huge huge deal and right now I am scrambling to put together as big a war chest as possible for this. Unfortunately it doesnt seem I can come up with more than 1.5k, without dipping into my cash savings. So what do you think should I be dipping into my cash savings to try and put as much into this as possible?

Tata Motors FD Interest Rates reduced from April 16th,2009

Effective Yield on 3 years Deposit reduced from 13.5% to 11.83%

Tata Motors has announced reduction in Interest rates on its ongoing and hugely popular Fixed Deposit Scheme with effect from April 16th,2009.

Under the Quarterly Income Plan the Interest Rates on 1 year deposit has been reduced by 0.75%, on 2 Year deposit by 1% and 3 year deposit has been reduced by 1%.

Additional Interest to Senior Citizens, Tata Motors Shareholders and Employees of Tata Motors has also been reduced from 0.5% to 0.25%

Other terms and condition of the Fixed deposit scheme remains same. You can read further details about the scheme in my earlier post here.

If you are a senior Citizen or Tata Motors and its subsidiaries employee or a shareholder of Tata Motors, the Effective Yield on 1 Year Deposit will be 9.84%.

Effective Yield in case of 2 Year deposit will be 10.62%

Effective Yield on 3 year deposit will be 11.83%

The effective yield on 3 year deposit will get reduced by 1.67%. Hence, if you have made up your mind to invest in Tata Motors FD scheme, it would be better if you invest before 16th April,2009.

Following are the Main Brokers / Distributors for the FD’s

•Tata Securities •ICICI Direct

•Kotak Securities •Stock Holding Corporation of India

•JM Financial •HDFC Securities

Reassessment of 09 goals

I had planned to pay off my car (about 18k) by end of 09, but now I am giving it second thoughts. Reasons:

1. My lofty bonus (almost 30% of my normal salary, announed Feb of every year) will get a severe haircut this year, our company already missed Q1 09 revenues by 30% YoY.
2. Our company has freezed salary hikes, due in May, till further notice. I was on course for a 7%+ hike, sigh.
   
3. If I set bonuses to zero, I can only come up with 11k by the end of this year (8 months).

Sigh, well laid plans down the drain it seems. Fuck me.

Beginning Fidelity National Finance

I started a position in Fidelity National Finance, FNF, yesterday at $19. This is a play on the refinancing boom that the government is trying to push through very hard, but this play should also get steam from the fact that there will be a significantly large volume of foreclosure sales in the near and intermediate term.

FNF is essentially a title insurer, so what they are concerned with is not home prices falling or rising, but only how many transactions (title change/tranfers/new titles issuance) occurs. And going forward the volume should rise, it has little room to fall right now.

Good pieces on this here,here and here

Long FNF is trading account

Limit order for Mosaic and thoughts on the crazy mkt rally

I set up a limit order at 43 for Mosaic in my trading account. Right now I only hold Gold (a pretty big chunk actually) via the double long DGP ETF. I am severely cash strapped in my trading account because of which, at this point, I am unable to load up on things that I like. But then again the market is excessively over-priced (30-40x PE is really really bad given the economic data points that we have) at this point and so not being in the market right now may not be such a bad thing.

As the market gets cheaper (once the Fed dollar printing dries up) I would like to start building core positions in names I like and then trade around them. I think this is a style most suitable for my kind of investing and leaps and bounds better than a buy and hold strategy. Remember that whenever we (atleast my generation and those in their 45s) talk about the merits of a buy and hold strategy we are only taking into account the past 2 decade and a half, and that was a bull market period. Alter your start points and the buy and hold merit arguments go pooooof .

Long DGP in trading account

Edit/Update: In regards to the excessively over priced nature of the market right now, here are some stats via Zerohedge which goes to show how overbought the market is right now (quoted in green below):

1. Fully 84% of the stock market is now trading above the 50-day m.a.; financials are running 26% above their 50-day m.a. in a gap we have not seen in 20 years.
2. It’s not just the banks that are hoarding cash – so are portfolio managers (ah yes, the proverbial “dry powder” … or maybe, just maybe, cash has become an integral part of money management): According to Morningstar, almost 30% of diversified US stock funds now have more than 5% of their assets in cash; for the entire fund industry, the cash-stash stands at a 5.9% share compared with 4.2% a year ago.
3. According to Moody’s, the ratio of companies having their credit ratings cut versus the number being upgraded (an indicator of declining credit quality) has reached its highest level since 1983.

But the equity market is somehow up 27% in march on pure sentiment. Sigh

Over budget

For the first two weeks of April I am destined to go over budget... sigh !! There were a couple of factors responsible for this though

1. I live alone, and over the past 2 weeks I discovered a fab take out place, and all my meals have been coming from there :(
2. I bought several gifts for my wife.

Anyway what this means is that for the first two weeks of April, the savings accounts get only 50% of what they are supposed to get. My wife and I are also planning for a beach vacation over the memorial day weekend, and thus I expect my savings for both April and May to be substantially lower than what I planned for.

Last but not the least I decided to pay off my car loan by the end of 09. Amount needed 18k. Godspeed !!