Investment Club - Jan 2010

Investment Club YenoM recently met with 7 members in attendance.  Our portfolio is in pretty good shape based upon the criteria we are using to manage it.  We need to add more small cap stocks that are not in either the technology or healthcare sectors.

We decided to sell all of our Linear Technology (LLTC) stock and use the proceeds of the sale and $1,000 in cash to purchase Neutral Tandem (TNDM).  Neutral Tandem is a company that provides “interconnection services principally to competitive carriers, including wireless, wireline, cable, and broadband telephony companies in the United States.”

We made these decisions for the following reasons:

Sell LLTC:

1.      Lowers our technology holdings which were above the amount the club set as the upper threshold

2.      No one in the club has the background to properly understand and follow the products produced by LLTC

3.      Eliminates the next to the lowest PAR stock in the portfolio (PAR was 8.3% vs portfolio PAR of 14.3%)
 
The only downside of selling LLTC was it lowered our percentage of stocks of the mid cap size - something we are trying to increase.  However, the positive aspects of reducing the holding outweighed this negative.

Buy TNDM

1.      Adds exposure to a new sector (Telecom)

2.      Increase our small cap holdings which were well below the targeted amount

3.      Increases the overall PAR for the portfolio (PAR for stock is 19.2% vs 14.3% for the portfolio)

Investment Club - Dec 2009

The December 2009 meeting of Investment Club YenoM was a quick one (just over an hour).  There were only 5 members in attendance which makes for less discussion and quicker decision making.  No one came with a new stock to present which also sped things up and not necessarily in a good way.  The club really needed to add a mid or small cap stock in an industry that was not technology.  We were not able to do that tonight.

We discussed selling Linear Technology (LLTC) because it had the lowest percentage annual return (PAR) in the portfolio and no one in the club really understands how Linear makes money – what is the product it sells. However if we sold LLTC we didn’t have another stock to replace it with so we decided to continue to hold until we have something better to add to the portfolio.

So with the almost $2000 we had in cash – some left over from last month and some from our monthly contributions we decided to add to current stocks we own - $1000 to Apollo (APOL) and $750 to Fiserv (FISV).

Fiserv is a mid cap stock (a good thing), with a PAR higher than the portfolio PAR (a good thing).  Our additional purchase will make Fiserv almost 12% of the portfolio (getting close to being too much).  All of the news on Fiserv is positive.

Apollo is large cap (not a good thing), with PAR greater than the portfolio (a good thing), and our contribution brings it up to an almost perfect percent of the portfolio (a good thing).  There has recently been some positive news on Apollo and there still is the cloud of a government lawsuit hanging over the industry.  We still feel confident of the investment.