Wednesday, August 19, 2009

My retirement fund - updated

Back in June, I did a post on how my retirement fund is invested. Here were the 9 investments at the time, in order of dollars within my portfolio:

1. Vanguard Precious Metals & Mining Fund (VGPMX)
2. Exxon Mobil Corp. (XOM)
3. Ford Motor Co. (F)
4. Eni SpA (E)
5. Wal-Mart Stores Inc. (WMT)
6. Petroleo Brasileiro SA (PBR)
7. CNOOC Ltd (CEO)
8. Honda Motor Co Ltd (HMC)
9. WisdomTree Dreyfus Brazilian Real Fund (BZF)

I sold the Ford stock after making a nice little profit on it. I also sold the Honda at a small profit.

Eni Spa, Wal-Mart, and CNOOC were all sold around where I bought them. They were not going anywhere anytime soon. Also, I felt I had too much exposure in oil with Exxon and Petrobras, and Eni Spa and CNOOC were not the best oil plays.

I also moved about $4,000 out of the Vanguard Precious Metals fund in a rebalancing of my portfolio.

Here is how my portfolio looks today:

1. Vanguard Precious Metals & Mining Fund (VGPMX): After reading Warren Buffett's inflation prediction in the New York Times today, I feel even better about this investment. So far, this one has returned over 9%. As long as Obama and Company want to inflate the dollar with their hare-brained schemes, precious metals will continue gaining value.

2. China Digital Communication Group (CMTP): I bought this stock back when it's symbol was "CHID" and it sold for 7 cents per share. I sold it for 11 cents per share.

Since then, it has had a 10/1 reverse stock split, and it is selling around $2.60/share. It has also reported much better earnings, with improved earnings forecasts for the future, plus a plan to list on NASDAQ. It has low debt/equity, and a disgustingly low price/earnings.

Did I mention they sell lithium batteries (the kind used in cell phones) in China? Can you say "large marketing opportunity"?

3. WisdomTree Dreyfus Brazilian Real Fund (BZF): I have increased my original stake in this fund because it has been a steady performer for me. Brazil's central bank is still tight with money, and they still have some of the highest money market rates in the world. A nice safe currency play.

4. Exxon Mobil Corp. (XOM): I haven't even changed the number of shares I hold in Exxon, and it has dropped from #2 to #4. This is just a long-term play on the price of oil.

5. Petroleo Brasileiro SA (PBR): You have to love an oil company supported by a corrupt government. Even more, you have to love it when that oil company makes a huge oil discovery, and the corrupt government practically gives the oil to the company. (see story)

6. Microsoft Corporation (MSFT): Not my favorite holding, but I expect the next operating system coming out in the Fall will be far better than Vista. They should see sales pickup by the end of the year.

7. New Zealand Dollar Fund (BNZ): A similar play to the Brazilian Real Fund above.

8. ShengdaTech Inc (SDTH): A Chinese manufacturer of concrete filler. With China growing, this is a strong little Chinese stock with lots of growth potential and little debt/equity. One thing you will notice about all my investments is little debt/equity.

9. China Mass Media International Advertising Corp (CMM): A Chinese advertising agency. One of the things I like about this company is low overhead. Another plus is government PSA work.

10. China Information Security Technology Inc (CPBY): Chinese software company. Low P/E and low debt/equity.

11. American Oriental Bioengineering Inc (AOB): This one is probably mislabeled as a "biotech" company. Think more along the lines of repackaging traditional Chinese herbal remedies. And they are Chinese in spite of the name. Again, they have all the qualities I like: low P/E, low debt/equity, and low price.

With the lone exception of Microsoft, you will see the trends in my portfolio: gold/precious metals, oil, foreign currencies from countries with tight central banks and decent or great money market rates, Brazil and China (the two top emerging nations in my opinion). Underlying all this is the weakness in the U.S. dollar, caused by the Federal Reserve's insanely loose money policy.

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