Catching Up – Our portfolio had its best run of the year, outperforming the S&P 500 by more than 1% over the past three weeks. All of our positions except for American Capital Agency (AGNC) gained ground, with Whole Foods (WFM), AIG (AIG), Ford (F), and Boeing (BA) leading the way. Since April 19, our portfolio gained 6.2% while the S&P 500 gained 5%. Since its January 10 inception our portfolio has gained 6.4% while the S&P 500 has gained 11.4%.
Whole Foods gained 17% after reporting second quarter earnings and revenues that beat expectations and increasing its full-year earnings guidance. Fears raised after the company’s first quarter report about declining sales growth were quieted after the company reported a second quarter same store sales increase of 6.9%, and noted that same store sales in the current quarter are showing a 7.4% increase.
AIG gained over 13% as it announced that operating earnings increased by 28% year over year, and the company reported its first profitable quarter in its property & casualty business since 2007. These results were significant because the quarter being reported was the first full quarter of company operations following the payback of all Federal bailout-related funds. Ford gained 9% as its sales in the U.S., China, and Asia continued to increase, while increasing U.K. sales indicates that the company’s European division may be stabilizing. Boeing gained 7% as its grounded Dreamliners went back into airline service. News Corp. (NWSA) gained 6.6% after reporting quarterly earnings and revenues that beat expectations. News Corp. and AIG lead the stock portion of the portfolio with gains of 22%.
Facebook (FB), our worst performing position, gained 3.7% as its earnings report showed accelerating revenue growth, especially from mobile users. American Capital lost 5.5% as HARP bonds (low balance, government insured mortgage bonds), emphasized in its portfolio, lost value due to fears of a curtailing of quantitative easing in the near future. Wisdom Tree Japan Hedged Equity (DXJ) gained 5.8% as the G-20 approved Japan’s aggressive monetary easing program which has driven the value of the Yen lower while the Nikkei average has broken above the 14,000 mark. This ETF is our best performer with a 29% gain.
The results of the past three weeks are encouraging because our portfolio outperformed the S&P 500 even while that index was reaching a succession of all-time highs. If Facebook and SPDR Gold Trust (GLD) can stabilize or show gains, our portfolio might be able to continue gain further ground on the index.
2013 MODEL PORTFOLIO
(As of May 10)
Stock Amount Change Index Amount Change
F $ 705.50 0.7% FB $ 853.76 (15.3%)
BRK-B $ 782.74 17.3% BGS $ 702.19 (2.9%)
BA $ 848.16 21.0% NWSA $ 865.02 22.3%
AIG $ 839.42 22.2% GLD $ 558.40 (15.0%)
GE $ 755.70 6.8% GXC $ 655.65 (6.1%)
AGNC $ 699.60 (3.9%) DXJ $ 894.42 29.3%
WFM $ 807.12 12.7%
STOCK TOTAL – $ 7,159.61; REIT/ETF TOTAL – $ 2,769.35; CASH TOTAL – $ 709.77
GRAND TOTAL $ 10,638.73 GAIN/LOSS since 1/10/13 6.39%
S&P 500 Index GAIN/LOSS since 1/10/13 11.4%