It's not rocket science, only a balance between greed and fear, but ultimate success goes to those who can afford to be patient.
Portfolio update week ending April 15, 2000
By
Emckoba, Snr. Investment AnalystApril 15, 2000
The thrashing over the past few weeks continued unabated, providing both heartaches and joy to many investors. Indeed it is true that one person's joy is another's sorrow. While many investors were being forced to dump their holdings on Friday, during the "selling frenzy" because of
margin calls, US tax loss selling and inflation fears, others were enjoying the largest firesale on the equity markets in the last 2 years.By Wednesday, April 19, 2000, minimum gains of 55% (in 3 days) were available to investors who were bold enough to jump into old favorites such as Wi-Lan,
Unique Broadband, Finline Technologies, Mobile Computing, Messagemedia, Jaws Technology, Descartes systems and Intrinsic Software during last Friday firesale.It is often said that determining the bottom of a precipitous stock market correction is a matter of luck not skill, but I think that when tabloid newspaper headlines say "Black Monday", "Black Friday", '$2 trillion thrashed", then we are pretty close, if not already at the bottom.
A word of caution though, the volatility will continue and hence it is prudent to take profits regularly. Paper gains are not helpful to an investor's bottom line until such time that holdings are sold and converted into cash. Please do not be greedy, in choppy investment climates, take profits or lock profits in regularly.
Thursday is the last trading day before the long weekend and as is customary, the smart money will convert all holdings into cash, if not done already and wait patiently for more bargains in week commencing April 24.
As is usual, we have provided an update of our portfolios even though we no more hold many of these as they were sold through stop losses during the recent downturn. We prefer to hold cash at these times and make large short-term specific investments in targeted companies or favorites at the right prices.
Jan 1, 2000 RRSP Portfolio
fell from cumulative gains of 61% (April 8/2000) to 6% (April 15/2000) - All stocks in this portfolio sold in the last 2 weeks through stop limits, maintaining 90% of gains.Jan 1, 2000 US Tech portfolio fell from cumulative gains of
-14% (April 8/2000) to -48% (April 15/2000) - Currently holding XDSL and the 2 incubators - CMGI & ICGE while MP3 & HAXS have been dumped to cut our lossesJun 1, 1999 portfolio fell from cumulative gains of
126% (April 8/2000) to 28% (April 15/2000). All stocks in this portfolio have been dumped and re-purchased at much lower prices except FNCM, which has been replaced with MESG/NASDAQ at $4.50Jan 1, 1999 niche leaders portfolio fell from cumulative gains of
224% (April 8/2000) to 84% (April 15/2000) - Currently holding CRY/TSE, FMI/TSE & ZIXI/NASDAQ. All others dumped in the short term.FLINT portfolio fell from cumulative gains of
602% (April 8/2000) to 260% (April 15/2000) - 95% of investments here were sold using stop lossesStocksOnSale portfolio fell from cumulative gains of
39% (April 8/2000) to 9% (April 15/2000) - Currently holding Deltathree, Geac and Nortel, the rest dumped.Jan 1, 1998 core portfolio fell from cumulative gains of
732% (April 8/2000) to 591% (April 15/2000) - We took profits in MSFT just before the anti-trust decision was announced and replaced it with Sun Microsystems on Friday, April 14 at $US75.25