Home Page

Introduction

Historical Results and Commentary

Portfolio Analysis

 

February 11, 2000

 

 

Holdings

 

 

Feb-00

1

PFE

2

UN

3

BBV

4

NKE

5

LLY

6

MMM

7

IBM

8

CAT

9

JNJ

10

DELL

11

MCD

12

FNF

13

MSFT

14

BRK-A

15

AMGN

16

WMT

17

NOK

18

AAPL

19

P

20

WB

 

 

 

Well, here it is.  After 8+ years of watching the markets and investing as an amateur, I’ve decided to put my money where my mouth is and start this index.  The index will consist of 20 stocks, rebalanced on the 11th of each February, May, August, and November so that each stock has an equal 5 percent weight in the index.  Dividends are accounted as reinvested automatically in the security that issued them.  I have intentionally chosen a peculiar date to mark the start of my quarterly periods.  Most everyone in the market thinks on a traditional quarterly or yearly cycle (or fiscal year cycle).  By arbitrarily skewing the time period I am tracking, I hope that it will provide me with another perspective on the behavior of the market.

 

 

Additions:  These 20 stocks were chosen as a blend of my personal portfolio holdings and stocks that I view to be reasonable acquisitions at this time. 

 

Subtractions: There are no subtractions for this time period

 

 

Commentary:  What a strange market!  Many value-minded observers feel that the market has lost all touch with reality.  I disagree.  The market is right in viewing the Internet and computer technology in general as being fundamentally transformative for the way we function on this planet.  However, where I believe the market is horribly wrong is in judging the magnitude and speed of this transformation.  Yes, the potential for ebay and Amazon.com to be as big as GE is there, but it will not happen anytime soon.  Where the analysts are really wrong is in three categories:

 

  1. Technology products and services will have a high adoption rate among younger consumers, but will face resistance penetrating older segments.  When the market realizes this, growth rate projections will come back down to earth, probably in a nasty thud.
  2. The relative valuation excuses that are being used to justify the outrageous prices for technology stocks are equivalent to justifing jumping off a cliff because someone else has done it.  I can only hope that this ‘groupthink’ continues when the market sours to create some undervalued securities.
  3. Doesn’t anyone care about profitability anymore?  (I do, so at least there is 1 person).

 

 

 

Back to Quarterly Commentaries

 

 

 

 

 

Home Page

Introduction

Historical Results and Commentary

Portfolio Analysis