What’s Dean been doing??

Once again I have strayed from blogging. Here (for like the 3rd time) is an attempt to rekindle my romance with Petty Cash. The ideas and feedback from readers has more than paid for the time it takes me to write a post, so I should continue to post regularly.

The Market

I don’t have any insight on the market. But it is tough to find anything meaningful to buy. As always I remain cautious, especially on residential real estate in Canada. Deny, deny, deny seems to be the theme. I don’t know if we get a “soft landing”, but things are eerie to say the least. What is the most perplexing, is that as Canadians we are quite certain that a real estate bubble won’t happen to us. I think it’s because we are so polite. I mean it’s like we believe that some sort of greater power will prevent horrible things from happening to nice people. We seem to think that “bad” things only happen to “bad” people. I think even an orangutan would learn not to do something if he seen a friend of his get hurt from doing it. I really shouldn’t say anything as I have made enough mistakes to fill a (near) million dollar house in Vancouver.

As well there seems to be renewed vigor for stocks again. Though my portfolio often goes in the opposite of the market, I remain skeptical of a liquidity fueled stock market that is now priced at greater than 18 times earnings. I have been hearing “pro-forma” and “adjusted” more than ever and analysts have been reaching up to 18-24 months into the future to justify valuation. Not a market call, but I doubt you can see anywhere near 10% returns over the next 10 years.

2013 Performance

Umm. Well, fine. I guess. I have done better than the market and made up much of the losses I had relative to the market when I questioned if I should be running my own portfolio. Having said that, I could do a 180 in no time flat. I constantly reassess holdings and position sizes. Currently north of 35% cash.

New Position

As per Chip’s suggestion in a previous post (see comments), I researched and added HWO.to to the portfolio.

The company is really cheap (less than 3.o ev/ebitda) and pays a monthly dividend. Management admitted that growth is limited and elected to pay a monthly dividend. A large shareholder is looking to liquidate, so we could see a depressed share price for awhile yet. 65% of revenue is from Papua New Guinea. The 3 rigs there are now under contract for a few years, so earnings and cash flow should be pretty certain.

Other Position Changes

I have been adding to OML.v and I have a few other positions that haven’t been blogged about. I think I will do a post with a quick thesis/summary on all unmentioned positions in the near future. I want to emphasize how many of my ideas are robbed/borrowed from others.

Thanks for reading,

Dean

Disclosure: long HWO.to

4 Comments

Filed under Portfolio Performance, Random Thoughts

4 responses to “What’s Dean been doing??

  1. booyah

    Selwyn Resources at $0.085 is interesting candian micro cap liquidation for uncorrelated returns, really easy to figure out too so might be worth a quick look

  2. hardcorevalue

    hes alive! glad to hear you are doing well dean! let me know if you come to toronto.

  3. Hi Dean…hope your summer is profitable!

    Just a quick followup on the other thread…I’ve pulled in all of my modest leverage since it’s time to get the ark afloat. Record consumer debt levels in Canada and margin debt levels in US are just signposts that give folks with the long perspective opportunity to be ready. Klarman who is always early is at 35% cash and planning to return capital to fund holders as his Lehman bonds expire.

    I’m also sitting on substantial cash even as portfolio hits new highs largely because fewer opportunities are available. The cash put to work in 2008 and 2009 has worked out very well. The optionality of cash is increasing in my opinion in preference to overreaching for yield or less sure capital gains.

    – O

  4. Pingback: High Arctic Energy Services – (HWO.to) | Petty Cash

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