‘The Tweed Update’ by Roger Tweed

Roger TweedBack to Life

Over the past three weeks, our portfolio came back to life largely due to Facebook (FB), our biggest holding, gaining over 15% when it was named to join the S&P 500 and S&P 100.  Our only other positions in the black since November 22 were AIG (AIG), Whole Foods (WFM), and News Corporation (NWSA), but these showed only fractional gains.  During this period, our portfolio gained 0.9% while the S&P 500 lost 1.6%.  Since its January 10 inception, our portfolio has risen 23.46%, while the S&P 500 has gained 21.06%. 

Facebook resumed its winning ways as December began when momentum stocks came back into favor and most other stocks sold off.  This is a sign that money managers who trailed their performance benchmarks purchased Facebook to show they owned the high flying stock in their year-end client statements, and also catch some upside after the stock had sold off in November.  The announcement of Facebook’s addition to the S&P 500 and 100 added 8% to its share price as index funds must add the stock to their portfolios.

Ford (F) lost 2.5% despite reporting a 7% increase in November sales.  Speculation that President and CEO Alan Mulally will leave the company when his contract expires in 2014 for the CEO position at Microsoft (MSFT)—speculation that Mr. Mulally has done little to discourage—contributed to the selling.  Berkshire-Hathaway (BRK-B) also lost 2.5%, likely due to rising interest rates.  Berkshire shares are usually not involved in year end profit taking.  Boeing (BA) lost 1.6%, and I would say that this was most likely profit taking after a very good run for the stock.

American Capital Agency (AGNC) and SPDR Gold (GLD), our only losing positions, lost 1.7% and 0.5% respectively, despite rising interest rates that should have made their losses even worse.  In American Capital Agency’s case, the losses were mitigated when interest rates failed to breach 2.9% on the ten-year Treasury.  In the case of SPDR Gold, the price of gold held above the $1,200 per ounce level and then rallied to the mid-$1,200s.  This is not the beginning of a rally for either position.  SPDR S&P China (GXC) lost 2% and Wisdom Tree Japan Hedged Equity (DXJ) lost 1.5% as international stocks saw year end selling.

I am very pleased that our portfolio is leading the S&P 500 once again.  Now that Facebook, our largest holding, will be part of the S&P 500 index, outperforming that index will be more difficult.  In terms of our 2013 portfolio’s performance, it is a good thing that Facebook won’t join the index until December 20, only a few weeks before we create our 2014 portfolio.


                                          (As of December 13)

Stock              Amount  Change                Index      Amount Change

F           $    829.50               18.4%           FB          $ 1,706.24                    69.3%   

BRK-B           $    798.42                      19.6%   BGS       $    772.80                      6.9%

BA        $ 1,204.47               71.8%           NWSA             $    105.96             56%

AIG      $    944.87               37.5%                  GLD         $    477.52            (27.3%)

GE        $    885.72               25.2%                  GXC         $    698.04                —

AGNC            $    440.44              (35.9%)          DXJ       $    888.66             28.5%

WFM              $    896.16              25.1% FOXA            $    856.18                    35%


STOCK TOTAL – $ 9,000.32REIT/ETF TOTAL – $ 2,504.66; CASH TOTAL – $ 841.18


GRAND TOTAL          $  12,346.16  GAIN/LOSS since 1/10/13                   23.46%

S&P 500 Index                             GAIN/LOSS since 1/10/13                 21.06%

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