arbitragr Posted July 21, 2009 Posted July 21, 2009 Hi all, I just wanted to get survey on forum members' asset allocation by industry/asset class if possible. If you don't want to talk about it, then that's okay too. Mine is: BRK/A and BRK/B: 46% Distressed debt/Junk Bonds: 24% Rest is in cash: i.e. about 30% Despite being in a middle of a recession, I wouldn't be a pedal to the metal buyer here. Right now, I probably think that things in the equity markets are fairly valued to be honest. Well at least compared to late 2008, and Q1 2009. I'm slowly allocating my cash. On balance, I think there are better buying opportunities ahead, and we may even see a little correction later on in the year. However I'm unsure which sector/asset class to allocate the rest of my cash to as we enter that stage, which is why I'm writing this thread just to get some ideas. I'd like a little bit of diversification. There are alot of attractive opportunities as we head into a recovery: tech, commodities, real estate, infrastructure ... all having similar correlation. I can't decide ??? I could probably even increase my junk/distressed debt position and I would be okay long term. Howard Marks, an investor I respect, is about 65% allocated to junk. Thanks in advance. Cheers.
Santayana Posted July 21, 2009 Posted July 21, 2009 Very roughly... 50% cash 20% FFH 10% ORH 10% Various preferreds and high yield dividend payers. 10% SPY puts of varying strikes and expirations. I fully expect that we will retest the March lows, and going lower wouldn't surprise me.
Viking Posted July 21, 2009 Posted July 21, 2009 ORH = 55% FFH = 12% Cash = 33% Regarding opportunities, I look forward to seeing what Hamblin Watsa has been doing in Q2 regarding asset allocation.
Guest kawikaho Posted July 21, 2009 Posted July 21, 2009 After a short foray into CIT puts, I'm now 100% cash. Looking to go 100% long soon. Economy will recover by end of year.
arbitragr Posted July 21, 2009 Author Posted July 21, 2009 After a short foray into CIT puts, I'm now 100% cash. Looking to go 100% long soon. Economy will recover by end of year. Nice. ;) You do know that Baupost and Oaktree as well as Bill Gross are on the other end providing the funding for CIT? They obviously see some value there.
link01 Posted July 21, 2009 Posted July 21, 2009 all jockey stocks, like partner. tho i think he'd & a few others disagree that west & sns are worthy of the name ;) west-30% (been buying in dribs & drabs for 3 yrs) sns-30% ffh-15% iaac-3% (just started rebuying this after having sold in 2008) orh, brk, luk-less than 2% cash-15-20% my whole family-mother, brother, & sister- are in the same stocks too...they dont like the interest rate on their savings account, & are willing to hitch up to the same caboose
KFRCanuk Posted July 21, 2009 Posted July 21, 2009 63% FFH 10% SNS 6% Cash I consider my FFH position as cash. Although I have not SOLD any of FFH in 5+ years.
Guest kawikaho Posted July 21, 2009 Posted July 21, 2009 After a short foray into CIT puts, I'm now 100% cash. Looking to go 100% long soon. Economy will recover by end of year. Nice. ;) You do know that Baupost and Oaktree as well as Bill Gross are on the other end providing the funding for CIT? They obviously see some value there. Yeah, and I'm glad I sold before they received the 3+ billion dollar lifeline. I learned one lesson with my GM puts: take your profits quickly. I made out with a 76% gain on the CIT puts. They are a big question mark at this point, and I'm not sure there is an edge to CIT. GM was a no brainer, but what I didn't fore see was the length of time it was going to take for the courts to declare the common worthless (and they still haven't!). My puts expired worthless on it. It's ok, I only converted less than 1% of my portfolio on that bet. But with CIT, they are banking on more lifelines--even today, they just warned bankruptcy isn't off the table. I think the Fed should just bail them out. They've bailed out almost everyone else. Either way, I don't see any good ways to play this thing. I think the odds are better that CIT will receive a lifeline, and their stock could soar, but the possibility is there for a bankruptcy. I dunno, I guess buy puts and and even amount of the common share? If the company bankrupts, you should recoup roughly half of the lost. If you buy longer term puts, and the courts declare bankruptcy, you'll make 100x the amount of contracts and make out like a bandit. If the stock soars, you get the common and could see 5x by end of the year.
nodnub Posted July 21, 2009 Posted July 21, 2009 66% Cash (growing bi-weekly) 5% BRK 4% FFH 3% ORH 4% WFC pref 5% basket of Canadian dividends 4% A value fund trading near my cost and well below high watermark level for fees. 6% Small positions and blowups. Good exercise. After reviewing my holdings I added to a few positions today.
mpauls Posted July 21, 2009 Posted July 21, 2009 A few of you scare me with all that cash. No one knows when and by how much, but we are certain to have above average inflation. The purchasing power of your cash holdings will effectively be taxed by an amount equal to the difference between the interest rate on cash and the inflation rate. Its not as though anyone will be able to warn you ahead of time, since once we recognize inflation's presence-it's too late. -Hear Reason, or she'll make you feel her. -look before, or you'll find yourself behind.
Parsad Posted July 21, 2009 Posted July 21, 2009 A few of you scare me with all that cash. No one knows when and by how much, but we are certain to have above average inflation. The purchasing power of your cash holdings will effectively be taxed by an amount equal to the difference between the interest rate on cash and the inflation rate. You are correct to worry about elevated inflation Mpauls, but I don't think most of them will hold cash for any prolonged period where the value of their dollar will erode significantly. They are mostly just biding their time waiting for the next fat pitch. Cheers!
nodnub Posted July 21, 2009 Posted July 21, 2009 I do not mean to present holding that much cash as an enviable position. I have been fortunate to be occupied with work for the last couple years, which led to a cash buildup and very little time for investment. It was 85% going into Sept 2008 -I am bringing the cash level down gradually - but incoming paychecks are working against that. However, the equity investments I made in October, Nov, Feb and March have more than doubled my equity on a contribution basis, (and greater than that on a capital+return basis). Not everyone on this board runs money for a living -- many of us have day jobs in other fields. At this point, the return on time spent on work for pay usually exceeds the ROIC for my portfolio, even if I was 100% invested and managed to return 20% per annum. In the future, I expect the balance will permanently tip in the other direction. Until then, I slowly plod along and invest my cash bit by bit. A few of you scare me with all that cash. No one knows when and by how much, but we are certain to have above average inflation. The purchasing power of your cash holdings will effectively be taxed by an amount equal to the difference between the interest rate on cash and the inflation rate. Its not as though anyone will be able to warn you ahead of time, since once we recognize inflation's presence-it's too late.
SharperDingaan Posted July 21, 2009 Posted July 21, 2009 25% FI, 20% Equities, 45% Cash, 10% Options. High cash as we’re short puts & are waiting on earnings reports. If we get what we'd like, we will very quickly be negative cash. Happy hunting SD
scorpioncapital Posted July 21, 2009 Posted July 21, 2009 Leucadia National - 57% Berkshire Hathaway - 42% Enstar Group - 1% Cash - (negative 25%) i.e. 25% margin loan. as follows: 1/3 CDN$, 2/3 USD$ margin
ericd1 Posted July 21, 2009 Posted July 21, 2009 Cash 5% PFD/HiYld Bd 50% STK 45% 25% of STK is BRK, 12% is FFH 5% of PFD are cigar butts...w/yields > 50% at purchase 5% of STK are cigar butts... Unconventional...
arbitragr Posted July 21, 2009 Author Posted July 21, 2009 Cash - (negative 25%) i.e. 25% margin loan. as follows: 1/3 CDN$, 2/3 USD$ margin Ha! Just remember that the broker call rate is about 2%. My broker is charging 4.25% + broker call. So your cost of capital is about 6.25%, well ... mine is anyways. Decent hurdle rate I guess. :) ;)
Guest kawikaho Posted July 22, 2009 Posted July 22, 2009 A few of you scare me with all that cash. No one knows when and by how much, but we are certain to have above average inflation. The purchasing power of your cash holdings will effectively be taxed by an amount equal to the difference between the interest rate on cash and the inflation rate. You are correct to worry about elevated inflation Mpauls, but I don't think most of them will hold cash for any prolonged period where the value of their dollar will erode significantly. They are mostly just biding their time waiting for the next fat pitch. Cheers! Exactly. Infact, thinking of going long ORH and FFH soon. I like lots of the companies in the Dow as well, but the valuations of some are getting rich. I still like Boeing and Merck. I did like MSFT, but it's getting a bit pricey now.
keerthiprasad Posted July 22, 2009 Posted July 22, 2009 ~50% cash 20% FFH 30% other stocks (SNS, SHLD, ISIS...) I'm a poor med student and don't really trade too often, hence I try to buy things I can hang on to for awhile.
scorpioncapital Posted July 22, 2009 Posted July 22, 2009 Cash - (negative 25%) i.e. 25% margin loan. as follows: 1/3 CDN$, 2/3 USD$ margin Ha! Just remember that the broker call rate is about 2%. My broker is charging 4.25% + broker call. So your cost of capital is about 6.25%, well ... mine is anyways. Decent hurdle rate I guess. :) ;) Not at all, I am paying 1.4% interest on the loan.
FlyingArrow Posted July 22, 2009 Posted July 22, 2009 Cash - (negative 25%) i.e. 25% margin loan. as follows: 1/3 CDN$, 2/3 USD$ margin Ha! Just remember that the broker call rate is about 2%. My broker is charging 4.25% + broker call. So your cost of capital is about 6.25%, well ... mine is anyways. Decent hurdle rate I guess. :) ;) Not at all, I am paying 1.4% interest on the loan. And it's tax deductable against the dividend income....
Grenville Posted July 22, 2009 Posted July 22, 2009 44% Cash/Govt Bonds 14% ORH-A 13% FFH 9% BRK-B 5% TAVFX 4% LLPFX 4% TAREX 2% ORH 1% SHLD mutual funds are from the days before finding this message board and its broad range of information and insight
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