Author: Ben Wong
Covestor model: Tactical and Opportunistic
Disclosures: Long IVR, AGNC, FTR. Short DELL.
It looks like the market took the end of QE2 and June with some optimism, as stocks rallied into the 4th of July holiday.
At the end of June, I allocated 27% of the portfolio to Invesco Mortgage Capital Inc (NYSE: IVR). Like American Capital Agency Corp. (NASDAQ: AGNC), it is another Real Estate Investment Trust (REIT).
We received our dividend from Frontier Communications Corp (NYSE: FTR) on June 30th.
I also opened up a short position on Dell Inc. (NASDAQ: DELL). The timing of the short wasn’t that great, as I bought right before the end of month rally. However, I added more to the position in early July to end up with higher average entry point, and with an allocation of 35% of the portfolio. I thought DELL would be a good short candidate as it tries to diversify its business from personal computing to services, software, storage and servers. They face tough competition, as the area they move into is already crowded with companies like Oracle Corporation (NASDAQ: ORCL), Hewlett-Packard Company (NYSE: HPQ), and International Business Machines Corp. (NYSE: IBM) and other data and networking companies.
Looking ahead, Q2 earning season kicks off and we’ll see if this rally can continue. Also, Congress needs to raise the debt ceiling by August 2nd or we could possibly face another panic.
Sources:
See Ben Wong’s Q&A on AGNC here: https://investing.interactiveadvisors.com/2011/06/ben-wong-gained-discipline-for-investing-from-the-marine-corp-agnc
