Restarting Aban Loyd, taking stock of portfolio

I restarted the position in Aban Loyd at 3580. If the stock falls to 3200, then I will purchase more. At that price, it starts trading at an appropriate discount to Transocean. The biggest risk is that when this company publishes its consolidated results in its annual report, investors won't like it and will run away. Investors have no clue of the earnings of its Singapore sub which has 70% of the assets. It is a risky stock.

I had bought Indiabulls securities at 132. Now it is at 92. Down 30% in 2 months, 25% with dividend. I was quite bullish 2 months ago and brokerages are the highest beta stocks, so I bought it. The biggest risk to the bull thesis was oil prices, so I had also bought Aban Loyd (which I sold later). This effectively became a hedged transaction.

I like the brokerage business model - from peak-to-peak, brokers are the biggest beneficiaries of capitalism and the societal push to make pricing transparent for a lot of goods. But can some of the Indian brokers get blown away if a downturn happens? Very likely. One needs to find the best one to back.

Another stock to keep on radar is ICI. It seems like some of the big institutional owners push this stock up as the qtr end approaches to window dress their NAVs. If it doesn't happen, one incurs unnecessary trading costs. Risk of losing money at 500 is low because company keeps buying stock at 525.

I have lost a lot of money (down 20% in 2 months) on US financials. But as it is my "value" pick, I want to stick to it for five years and see whether one can really make money by buying when the hour is the darkest. So far, I have always invested in the easy-to-see or cheap on valuation stories. This is the first deep value (or deeply stupid) investment. If I don't make money, I will have such hallowed names like TPG (WaMu), Warbug Pincus (MBIA), Temasek (Merrill) and other SWFs in my company. The misery of others lessens one's own misery :)

This is a historical year in the history of the world. Possibly the first black president in the White House. Oil at 135. The return of inflation. Bear Sterns in smoke. A bloodied Wall Street. At least the most significant year since 2001 (9/11). 2003-07 seems so boring in retrospect.

Portfolio allocation now is 30% stocks, 20% bonds, 50% cash.