more pruning

Just unload my position in BMY. I entered into both MRK and BMY at the same time last year as I was being bearish on the market. Both stock looked cheap to me. The 5~6% yield on both are excellent hedge again a down market. I believed the market was over reacting to the expiration of drug companies' patents. Observe that people are still buying Tynenol, even though every pharmacy store and big grocery chains has their generic version Acetaminaphen. At the time, the three big drug companies, MRK, BMY, PFE all looked cheap. I ultimately went with MRK, which I still hold, and BMY. MRK was clearly oversold, and I got in the bottom. As for BMY, I am starting to have doubts about its management's capability. The move is more influenced by my thoughts after reading the book Good To Great. I simply can not envision BMY can be a Great company at this point. Ironically, I thought PFE had the biggest risk at the time, but it has out-performed BMY by a wide margin so far. I unload BMY also because after I examined my portfolio, I came away with the conclusion that I have a little more exposure in pharmaceutical area than I would like. It was the same reason why I sold my NUTR shares yesterday.

BMY was 4% of my portfolio.

clipping branches

Today I finally got down and started unloading some positions. Some of the trades I put in got executed, some didn't. The ones didn't get executed are limited orders I put in this morning at today's high. The prices never came back. The positions I am unloading are small, either irrelevant to my current investment philosophy, or the underlying economics has changed.

The stocks sold today were

• Oracle (ORCL), I bought this stock many years ago before I have better educated myself about investing. I sold it for a substantial loss (percentage wise). By my calculation, the current price is probably at fair value. For me to unload Oracle doesn't mean I am bearish on Oracle. Simply means I can find better opportunities elsewhere for my money.
• Nutraceutical International Corporation (NUTR). Sold this position as a small loss. Again, NUTR is not a bad company. I bought it at full price, and it hasn't done anything for me in the last couple of years.

In the end I am more concern about potential growth in sales of both companies. NUTR was 1% of my portfolio, and ORCL was 0.5%. As I unload more small postions from my portfolio, I will record them on this log.

Homeownership Not Equal

Single women home ownership is on the rise, says this article, and businesses cater to them are doing well. What gives, shouldn't that mean that Pier One Imports should do well? I know plenty of women love that store.

Homeownership Not Equal - Yahoo! News

Why it pays to invest in bosses who blame themselves - April 1, 2006

Why it pays to invest in bosses who blame themselves - April 1, 2006

The above article describes some of the qualities for a company to go from "Good to Great." A Level-5 leader will be first one to take the blames, and try their hardest to fix the problems.

U.S. Cold Warrior Scuttled Chinese Offer - Yahoo! News

U.S. Cold Warrior Scuttled Chinese Offer - Yahoo! News

Something for the hawks in the current administration to think about to think about, now that Hamas has hinted the possibility of recognizing Israel.

You know, the world is not just strictly black and white, "if you not with us, then you are against us".

Andrew Tobias - Money and Other Subjects

Pretty interesting read from Andrew Tobias blog today. Conservatives, time to rethink your "doing God's work" approach.

Andrew Tobias - Money and Other Subjects: "[Slavery] was established by decree of Almighty God...it is sanctioned in the Bible, in both Testaments, from Genesis to Revelation...it has existed in all ages, has been found among the people of the highest civilization, and in nations of the highest proficiency in the arts.

—Jefferson Davis, President of the Confederate States of America."

USG to offer existing shareholders options

USG Files Registration Statement with SEC: Financial News - Yahoo! Finance

In order to win approval for new stock offering, USG is going to offer subscription rights to existing shareholder to purchase one share of USG for each share they own, for $40/share. The record date hasn't been set yet, but the news apparently pushed the stock price up above $100. I have been a shareholder since it was below $17/share, and been kicking myself not to add more shares at various time when I declared USG was an attractive buy at $30, $40, $50, etc... I for sure will take this opportunity to double my ownership.

BTW, for those think they can make a quick buck (actually quick $60 bucks) by buying USG now, I am pretty sure the date was set before it came on the business wire.

Buffett sold huge equity market insurance policies: Report - Apr. 4, 2006

Buffett sold huge equity market insurance policies: Report - Apr. 4, 2006

The above link is an article I read from CNN Money web site. In short, Buffett's insurance arm sold insurance policies to various funds that invest in foreign markets. If these markets are down more than 30% (assume against some pre-determined level), the policy will pay the funds' claims against that loss.

Does this mean Buffett favors the foreign markets? Hard to tell, the deals' details were not released. The funds could be paying a hefty premium for the policies. It's all about risk/reward. Given any risk level, if the reward is large enough it should be a favorable deal for the insurance company. It's hard to speculate, but then again he's more bearish about US market than the rest of the world for a while, you can't help but think this is yet another endorsement.

Army blocks soldiers from using own body armor

There you have it, ladies and gentlemen, we have determine what is going on!

From the Reuters news wire, now the Army blocks soldiers from using own body armor. I don't normally blog about politics, but this has just gotta make you pull your hair. Is this president more interested in protecting the soldiers' lives, or the defense contactors' profit? You're telling me that soldiers rather use a safer, and in some case, the only vest they can get a hold of from their mom and dad, would face a penalty from the Army Corp?

No, that's not a vest from our contractor. You, take it off right now, and patrol the Bagdad streets now.