Friday, April 11, 2008

Portfolio as of 11 April

In the US,
a) CCS - Comcast's unsecured debt with a 7.5% yield. A better place than my bank account to park money. I am sure Comcast is not going bust. Best thing is that it trades on the exchanges like a stock.
b) PYN - Pimco NY Muni Fund III. I think that (a) municipal markets will stabilize slowly but surely, (b) interest rates would fall more, so funds with high yields will become more attractive and (c) tax rates will rise in the next 3 years - deficits need to be reduced at some point of time - so tax-free muni bonds will become attractive. This trades at a discount to its NAV which has started recovering since Feb when the ARPS crises hit. Hold for long term.
c) SKF - Ultrashort Financials. This is a speculative position. This is a levered play to short financials. Breakeven here - this position was established last week. Citi and ML report next week, so we can see some action here.
d) Am looking at some stocks to buy for the long-term. Philip Morris International seems a good one. It just spun out of Altria. FY08 EPS of $3.10-$3.20 gives it a PE of 15x-16x.

In India,
a) Aban Loyd - leveraged bet on shallow water E&P capex. Lost 10% so far. It is not a 5 year buy kind of stock. As long as oil remains above $80, I think we are safe.
b) Some PSU's - Union Bank, Bank of Baroda. Underwater by 10%. I sold Allahabad Bank last month at a 40% loss to save taxes.
c) Blue Dart - should I add more? This is down by 20% and is a good company.
d) Deccan Chronicle - Down by 20%. It's financials are fraud. But it is newspapers + the only way to play IPL. Wouldnt add more.
e) Sold Tata Power at 20% loss last month to save taxes. This is the only utility stock I will buy if I get it at around Rs 1000. It bought a stake in Bumi resources (Indonesian coal mine) last year, which has been a home run now that coal prices have run up. Plus, conglomerate discount should vanish as it starts monetizing stakes in other Tata group companies to fund its own aggressive capex plans.

I am still 85% uninvested. Cash has been a good bet so far. But now is the time to start buying good quality companies that have become cheap.

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