The Tweed Update by Roger Tweed

Roger TweedStretching the Lead – Our portfolio again outperformed the S&P 500 during the past five weeks as all of our stock positions showed gains.  Our only losing positions since September 6 were American Capital Agency (AGNC) and SPDR Gold (GLD), while the trio of Whole Foods Market (WFM), Facebook (FB), and Boeing (BA) each gained over 11%.  Since September 6, our portfolio gained 5.2% while the S&P 500 gained 2.9%.  Since its January 10 inception our portfolio has gained 21.84% while the S&P 500 has gained 16.14%.

Whole Foods led the portfolio with a gain of 12%.  The high-end grocer recently announced the introduction of its own line of pet foods and plans to open stores in Chicago and Newark, and also received an analyst’s Buy recommendation.  Our Whole Foods shares have gained 37%.  Facebook gained 11% even though the shares plunged almost 12% from October 7 to October 9 when escalating Government shutdown and debt ceiling fears dragged down the market.  Facebook’s stock price has risen so dramatically since its July earnings report that the upcoming October 30 earnings report will need to be impressive to maintain its strong momentum.  Facebook is our best performing position with a gain of 56%. 

Boeing gained 11% as the company’s backlog of commercial airliner orders reduced fears about the stability of the its government contracts.  Boeing shares have been climbing lately as if the company was a high tech start-up, which it is not.  After the euphoria surrounding the hoped for debt ceiling extension takes place, I would expect Boeing shares to pull back a bit.  Our Boeing shares have gained 51%.

American Capital Agency lost 1.1%, even though since late September 10-year Treasury rates have stabilized in the 2.6%-2.7% range.  A Mortgage REIT like American Capital would normally have a positive response to stable interest rates, especially after the Federal Reserve did not cut back on its bond buying program.  Similarly, SPDR Gold lost 8.6% despite stable interest rates, the certainty of governments worldwide continuing to print money as fast as they can, and the chaos in Washington.  You would expect gold to gain in price with those three factors in play.  Unfortunately, I believe that this is due to a worldwide lack of inflation and that this will keep these sectors underperforming for some time.

I am very pleased with the gains in our portfolio over the past five weeks, and although I expect a brief pull back in stocks after a deal is announced in Washington, I believe our portfolio will gain more ground by year end.

2013 MODEL PORTFOLIO

(As of October 11)

Stock     Amount   Change                 Index      Amount  Change

F           $    855.50               22.1%            FB          $ 1,571.52                    55.9%

BRK-B           $    810.67                      21.4%   BGS       $    847.55                    17.2%

BA        $ 1,061.82               51.4%            NWSA             $      98.46            44.9%

AIG       $    950.00               38.3%                  GLD          $    490.40            (25.4%)

GE        $    805.20               13.8%                  GXC          $    691.44              (0.9%)

AGNC            $    494.56              (28.0%) DXJ       $    867.78             25.4%

WFM              $    978.88              36.6%  FOXA              $    863.98                    36.3%

 

STOCK TOTAL – $ 8,843.58;  REIT/ETF TOTAL – $ 2,544.18; CASH TOTAL – $ 796.31

 

GRAND TOTAL $  12,184.07  GAIN/LOSS since 1/10/13          21.84%

S&P 500 Index                              GAIN/LOSS since 1/10/13                 16.14%