The Tweed Update by Roger Tweed

Roger TweedA Surprising Win – Our portfolio managed to recover more quickly than the S&P 500 over the past four weeks, gaining 1.1% while the index lost 0.7%.  Although June was brutal for mortgage REIT American Capital Agency (AGNC), SPDR Gold Trust (GLD), and SPDR China (GXC), our portfolio overcame these losses on the strong performance of B&G Foods (BGS), Ford (F), Wisdom Tree Japan Hedged Equity (DXJ), Twenty-First Century Fox (FOXA) and News Corp. (NWSA) (the two new companies created by the split of the former News Corp.), and a gain from Facebook (FB).  Since its January 10 inception our portfolio has gained 6.02% while the S&P 500 has gained 10.13%.

Our stocks were led by B&G Foods, which gained 17.7%.  The company’s acquisition of Pirate Brands, makers of healthy snacks under the Pirate’s Booty label, was well received by analysts and the stock has restored its image as a fast-growing, high earning food company.  Japan Hedged Equity gained 6.9% as the Nikkei snapped back from its 20% slide in May, as traders are once again betting that the Abe government’s unprecedented monetary easing will continue and will produce higher inflation and growth.  Ford gained 6.2% as U.S. sales grew 13% in June, F-Series pickup sales (the largest contributor to Ford’s bottom line) grew 24% in June, and sales in China grew by 44% in June. 

Newly split Twenty-First Century Fox (consisting of the Fox Networks and film studio) and News Corp. (newspapers and publishing) gained a combined 5.7% as the two had their shares bid up sharply during their first full week of trading.  Twenty-First Century has the best growth potential.  And Facebook gained 4.6% as it once again bounced off the $23 level where buyers seem to outnumber the sellers.

American Capital Agency lost 18.8% as the spike in interest rates and the inevitability of even higher interest rates in the future lowered the value of its portfolio and forced mortgage REITs to reduce their payouts.  Our shares have now lost 1/3 of their value.  Mortgage REITS should be avoided for the foreseeable future.  SPDR Gold lost 11.4% as the price of gold also succumbed to higher interest rates.  There is no reason to buy gold shares or gold miners until the price drops much lower.  And SPDR S&P China lost 9.4% as China’s economic reports have become weaker and murkier each month.  No reason to buy Chinese shares these days either.

I am encouraged by our portfolio’s fast recovery, but fear that the drag on performance of our losing positions will keep us from catching the index.

 

2013 MODEL PORTFOLIO

(As of July 5)

Stock     Amount   Change                 Index      Amount  Change

F           $    835.00               19.2%            FB          $    779.84                   (22.6%)

BRK-B          $    804.72                      20.6%   BGS       $    788.67                       9.1%

BA        $    937.80               33.7%            NWSA             $      93.96             27.7%

AIG       $    858.61               25%                    GLD           $    472.36             (28.1%)

GE       $    766.92                 8.4%                  GXC          $    566.10             (18.9%)

AGNC            $    456.72              (33.6%) DXJ       $    863.46              24.8%

WFM              $    851.68              18.9%  FOXA              $    790.01                     24.6%

 

STOCK TOTAL – $ 7,507.21;  REIT/ETF TOTAL – $ 2,358.64; CASH TOTAL – $ 736.49

 

GRAND TOTAL $  10,602.34  GAIN/LOSS since 1/10/13           6.02%

S&P 500 Index                              GAIN/LOSS since 1/10/13                 10.13%