Friday, December 16, 2011

Virtual Portfolio Has Begun Trading

I'm very excited, as today I've finally begun my finance blog virtual portfolio. As you know, I've compiled this list by analyzing stocks in different sectors using Warren Buffett methodology and my own personal methodology, as well as DCF analysis. I haven't given much weight to my DCF analysis, however, as I am unsure whether or not my inputs are correct. I hope to continue to get better at the DCF so that it can become an integral part of my investing in the future.

Here's what I bought, and at what price I bought it. This portfolio will be monitored using the OptionsHouse virtual portfolio platform.

Stone Energy: 500 shares bought at $23.64.
Chipotle Mexican Grill: 30 shares bought at $319.21
Apple: 30 shares bought at $380.23
Coach: 200 shares bought at $58.12
Caterpillar: 80 shares bought at $87.61
Potash: 200 shares bought at $38.56
Market Vectors Agribusiness ETF (MOO): 100 shares bought at $45.39
ProShares Ultra Short S&P 500 (SDS): 500 shares bought at $20.73
iShares Silver Trust (SLV): 500 shares bought at $28.55

As you can see, I added MOO, SDS, and SLV to the 6 stocks selected through rigorous analysis. I like these ETFs as hedges for my portfolio. They are not all necessarily hedges, though. For example, MOO doesn't trade inversely to the market, but I do believe that agriculture could perform well if the market turns sour. MOO is the closest thing to actually purchasing farm land, which I strongly feel will be an extremely valuable asset in the years to come.

Silver historically trades at a 16:1 ratio to gold. It is currently trading at a 53:1 ratio to gold. If this ratio were to move closer together in the future, it either implies downward movement in the price of gold, or upward movement in the price of silver. I favor the latter.

And, of course, I purchased the SDS as a hedge against the market crashing. It is a 2x short ETF against the S&P 500 index. For those of you who are not familiar with what I'm talking about, it means that if the S&P is DOWN 1%, then the SDS will be UP 2%.

Today, the portfolio is up $457.00. I will be trading within the portfolio if I feel it is necessary. Besides that, I look forward to keeping you all updated with the performance of the portfolio, and adding or removing stocks when I feel it is warranted.

Cheers,
EZ

2 comments:

  1. my word of advice here is to not buy a lot of stocks at once. Trick is to wait until stocks are "cheap". Buying in bulk may work in costco, but not on wall street... hahaha

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  2. Nobody- I agree with you. However, for the purpose of this blog, I just wanted to get the "virtual" portfolio up and running. I didn't want to hassle with timing the market.

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