Editor’s note: As of 9/20/11 Lucas Krupinski no longer manages a Covestor model
Author: Lucas Krupinski
Model: Small Cap Fundamentals
Disclosure: Long AGNC, BRK-B, FXA, MUB, VOD, KO, INTC, FLY. Short ZROZ.
Last month saw an overhaul of my portfolio, which I felt had become too diversified for my liking, and was relying too much on margin borrowing. I’m reinvested again, with a much tighter set of holdings, and no margin balance. There may be a day when I lever up again, but it isn’t today.
To run through my holdings:
American Capital Agency Corp (NASDAQ: AGNC) remains a favorite in this interest rate environment.
Berkshire Hathaway (NYSE: BRK-B) was added again, albeit the day before David Sokol’s departure came to light. It’s true that Berkshire’s golden years are long gone (as even Warren Buffett says), but the collection of companies it has amassed is a very good representation of US industry.
Currencyshares’ Australian Dollar ETF (NYSE: FXA) is a new holding of mine.
ishares National Bond ETF (NYSE: MUB) was added, as a replacement for the leveraged fund I had invested in previously (NYSE: VKQ). Despite warnings to the contrary, I just don’t see reason to be fearful of a muni bond implosion.
Vodaphone (NASDAQ: VOD) is a great company with huge presence in overseas markets, and, via its partnership in Verizon Wireless, a sizable presence in the U.S. as well.
Coca-Cola (NYSE: KO), a Buffett favorite, is attractively priced, and their products can be found on every continent on the planet (save Antarctica – and even there, I bet there’s at least one vending machine with their products). They might not have stratospheric growth prospects, but I think that there is some nice upside potential at KO.
Intel (NASDAQ: INTC) was added – it’s very cheaply priced, and nearly all of us rely on their technology, whether we know it or not, and whether we like it or not. That seems like a good company to invest in.
Fly Leasing (NYSE: FLY) might just be my favorite holding, though it’s also my smallest holding. Expect to see its allocation rise in the coming months.
PIMCO 25+ year Zero Coupon Treasury ETF (NYSE: ZROZ) is a perennial short favorite. I’m making a political statement about debts and deficits, but I don’t think the world will continue to loan us money at 4.5% to 5% for 30 years at a time. As QE2 ends, I can’t help but think that longer term interest rates are in for a steady march upward.
