Friday, May 13, 2005

Portfolio and Market Update

Well, this week sure has been choppy. The Dow and S&P both closed lower for the week, but the Nasdaq managed to finish the week in the green. Overall, the major indices have been pretty choppy. The market cannot make up its mind.

Today, one of my core holdings, Constellation Brands (STZ), moved a step closer to making a formal bid on Allied Domecq. Allied Domecq is not a household name, but one of their products, Maker's Mark, is a favorite of mine. If you haven't had Maker's, give it a try. It's not overly expensive, and it's nice. Constellation Brands also might not be a familiar name. Not only is it a big player in the wine market, but it is also a major importer of beers. They are importers of popular brands such as Corona, St. Pauli Girl, and Tsingtao. I am currently unsure what I think about Constellation and its possible bid on Allied Domecq. But, Constellation has been a core holding of mine for quite some time now, and I am not ready to exit the position. Also, Constellation's stock should split some time next week. Theoretically, this should have no effect on the stock, but as we are all aware, people are sometimes driven by psychology and not rationality.

Maybe now would be the best time to give a rundown of my current holdings.

Current core holdings in my portfolio (holding time 1 year or more):

Altria Group (MO)
Amgen (AMGN)
Constellation Brands (STZ)
Equity Office Properties (EOP)
General Electric (GE)
Harrah's Entertainment (HET)
Hibernia Corp. (HIB) -- soon to be converted to Capital One (COF) due to buyout
North Fork Bancorp (NFB) -- initial position was Greenpoint Financial
Pfizer (PFE)
Student Loan Corp. (STU)

Recent additions (may or may not become core holdings):

Apple Computer (AAPL) -- bought after recent drop
Eastman Kodak (EK) -- looking for major turnaround; recent earnings report was below my expectations, but I will give it a few quarters to see if progress is being made
International Gaming Technology (IGT) -- recent approval for Singapore and Macau casinos is a catalyst; also, anecdotal evidence that their machines dominate the newly opened Wynn resort
Linear Technology (LLTC) -- generic position, looking for general improvement in semiconductor industry
Solectron (SLR) -- contract manufacturing might be nearing a cyclical bottom; should track Sanmina also
St. Jude Medical (STJ) -- future buyout candidate; refer to J&J's recent purchase of Guidant

Recent deletions from the core:

Clorox (CLX) -- was a core holding for some time, exited position at 59.50 after the dissappointing earnings report on May 5, 2005.

Position/Swing Trades [Short(er)-term positions]:

eBay (EBAY) -- entry 31.40s
RF Micro Devices -- entry 3.90

On the radar:

Cryptologic (CRYP)
Elizabeth Arden (RDEN)
Fiserv (FISV)
Form Factor (FORM)
Hot Topic (HOTT) -- as a short candidate
Wynn Resorts (WYNN) -- as a short candidate

I guess that's all for now. Pretty dry blog entry, but my plan is to be very honest with myself when it comes to the markets. I figured the best way to do this is to post my thoughts and actions every so often.

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