File - The Portfolio Guru

Report
The
Portfolio
Guru
 Asset Management
 Portfolio Guru Post
 TheStreet.com Columnist
Portfolio Guru, LLC
Asset Management Services
Fee-Only
Bespoke
• 2% Annual
• SeparatelyManaged
• Limited PoA
• Low Maintenance • Securities
Selected for
Individual Client
Objectives
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
Cost Efficient
• Buy-and-Hold
• Tax Efficient
• Minimize
Commissions
2
The Basic Portfolio Guru Process
Income
Generation
Persistent
Reinvestment
Active
Management
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
3
The Basic Portfolio Guru Process
Income
Reinvestment
Wealth
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
4
Active Asset Management
RESEARCH on
Owned/Potential
Securities
• Industry Conferences
• SEC Documents
• Mgmt. Conference Calls
• Industry Publications
• Financial Media
October 7, 2013
Portfolio Construction
• Allocation by Category
• Industry Weightings
• Income Objective
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
Day-to-Day
Management
• Daily Analysis of ALL Owned
Securities – News, Financials,
Industry Developments, etc.
• J. Collins Watches/Writes
About Markets on a Daily
Basis
• Client Accounts are NOT
“Churned”…Trading is Kept to
a Minimum
5
Portfolio Construction
Minimum
Yield
• 8% Annualized
Monthly
Cash Flow
Needs
• MORE Risk Assumed in
Extreme Situations
Age Until
Retirement
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
• Capital Appreciation vs.
Current Yield
6
3 Basic Account Structures
Classic
• Income-Focused
• Mix of Bonds,
Preferreds and HighYielding Stocks
• Equity Buy-Writing
October 7, 2013
MAX Q
• ALL Securities Pay
Monthly
• Maximize Monthly
Income for Special
Needs
• Reinvestment Not
Assumed
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
YPP
• “Young Person’s
Project”
• Shift From Reliance
on Monthly Income
• Seek Out Home Runs
7
The “Magic” of Compounding
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
8
The Classic Example:
50 Years of Coca-Cola Stock Returns; Reinvestment vs. Non-Reinvestment
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
9
Strong Model Portfolio Performance:
$100,000 Invested on October 4, 2011 = $132,545 Today
The Guru’s Model Portfolio Value
$135,000
$130,000
$125,000
$120,000
$115,000
$110,000
$105,000
$100,000
$95,000
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
10
The Benefits of ACTIVE Management:
2013 Has Been a Challenging Year for Fixed-Income Managers;
Portfolio Reallocation Has Improved Model Portfolio Results
Model Portfolio Value
Qtr./Qtr.
10/4/2011
$100,000
12/31/2011
$105,962
5.96%
3/30/2012
$118,491
11.82%
6/29/2012
$123,362
4.11%
9/28/2012
$128,385
4.07%
12/31/2012
$128,426
0.03%
3/29/2013
$133,150
3.68%
6/28/2013
$129,817
-2.50%
9/30/2013
$130,527
0.55%
10/4/2013
$132,545
21.20%
3.21%
Since INCEPTION
32.54%
ANNUALIZED
October 7, 2013
Annual
16.27%
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
11
It Works in “Real Life”
Changes to Guru Client 1’s Account Have Produced Instant Benefits
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
12
Agnostic As to Industry: Follow The Yield
2006-2007: Dry
Bulk Shippers
2007-2008:
Consumer
Goods
2009-2011: Financials
2008-2009:
Crash, Then
Rebirth
2012-2013
Energy
2014/Beyond: Energy; Opportunities
Overseas?
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
13
Portfolio Guru, LLC Invests in Individual Companies:
No ETFs, Mutual Funds, etc.
Company
Fundamentals
Massively
Undervalued?
Keen Analysis
October 7, 2013
Security
Selection
Income
Production
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
14
Love the Company; How Do We Invest In It?
• Preferred Stock
• “Straight” Debt
• High-Yielding
Common
Income
Securities
October 7, 2013
Equity
Linkage
• “+” Convertible
Preferred/Debt
• “-” Call Option
Writing
• Buy Common
Stock
• Younger Clients
Home Run?
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
15
Case Study: Miller Energy Resources
• Bought Cook Inlet Drilling Assets out of Bankruptcy in 2009
– Very Little Production Entering 2013; “Sidetracking” Old Wells
– High Debt Levels
– Large Short Interest
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
16
Case Study: Miller Energy Resources
• Finding a Catalyst is Always Key to Generating a Winning Position
• Miller’s Catalyst: An Incredibly Productive Well
• June 24, 2013: Miller Announces That Well RU-2A Is Gushing Oil…
– IP rate of >1,200 BB/D; Greater Than Miller’s Prior Total Company-wide
Production Rate
• …Much More to Come
– Potential for 10 More Wells Drilled by April 2014
– Production
•
•
•
•
April 2013 1,000 BB/D
August 2013 3,400 BB/D
Estimate December 2013 4,000 BB/D
Estimate April 2014 6,000 BB/D,
– Proved reserves
• April 2013 1.8MM
• April 2014 POTENTIAL >12MM
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
17
Case Study: Miller Energy Resources
• Key to Profitable Investing: Acting Rapidly on Ideas
• Actual J. Collins Quote: “Whoa, This Is Going to Go Bananas!”
• 3 - Step Process
– Place Trades for Clients
– Send E-Mail to PGP Subscribers
– Share Insights on Miller in Real Money Column
• Bought MILL in July/August @ $5-$6.60 per share/wrote calls ($10
strike; Feb 2014)
• 10/4/13: MILL $8.39
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
18
Case Study: Miller Energy Resources
• Key to the Process: Identifying Undervalued Securities
• High Yields Can be an Indicator of Buying Opportunity
• “Found” Miller Energy via the preferred issue (MILL-C)
– MILL-C: $25 Par; 10.75%; convert to MILL @ $10/share
• Bought MILL-C in April/May @ $22.00 To Yield ~14%
• 10/4/13: MILL-C $26.86
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
19
Market Overview
• Stock Market: Bearish
• Valuation is a Concern:
– S&P 500 YTD: Consensus 2013 EPS DOWN 4.8%, Price UP 15.6%
– P/E Multiple ABOVE Historic Averages; 2014 EPS Estimates TOO HIGH
– Margins at Cycle-High; Revenue Growth Anemic
• Quantitative Easing: the Fed is Driving The Bus
– What Happens When They Taper/Exit…and UNWIND???
• Myriad Governmental Externalities
– Uncertainty About Affordable Care Act Restraining Hiring/Wage Growth
– “D.C. Follies” Are a Huge Risk
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
20
Market Overview
• US Treasury Market: Neutral
• Short Rates: Effectively 0% until 2015
• Cash is Trash
– If You Have $ in Savings/CDs…You Need to ACT
• Long Rates: Likely to Rise, Albeit Gradually
• Quantitative Easing: $3.5 TRILLION and Counting
– No One Knows How To Unwind; It’s Never Been Done Before
– “D.C. Follies” Always a Risk
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
21
Market Overview
• Corporate Fixed-Income: Selectively Bullish
• Special Situations
– High Yield – Generally 8% or Above
– Call-Protected
– Discount to Face Value – Potential Capital Gain
• Mezzanine Still Attractive
– Equity Valuations Rich and H-Y Bonds Yields Near Historic Lows
– Currently Buying/Reinvesting into Preferreds/Convertible
Preferreds for PG, LLC Clients
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
22
Who Is This Man Who Calls Himself Guru?
• 21 Years of Investment Experience
– Completed All Requirements for CFA Charter
• Investment Bank Equity Analyst,1992 - 2002
– Lehman Brothers (NY): Auto Parts
– Donaldson, Lufkin & Jenrette (NY/London): Autos/Auto Parts
– UBS (London): Autos/Auto Parts/Tyres
• Private Investor, 2002 - Present
– Personal Portfolio Composed Primarily of Income Securities
– Options Trading; Front-Month, Out-of-the-Money a Specialty
• Founded Portfolio Guru, LLC in 2011 to:
– Publish a Newsletter (The Portfolio Guru Post) about Income Investing
– Manage Money for Individuals
• Columnist for Real Money at TheStreet.com since May 2013
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
23
Where To Find Jim Collins’ Work
The Portfolio Guru Post
Bi-Weekly Newsletter (subscription)
• The Gospel of Income Investing
• Company-Specific Analysis
• Market Commentary
• Model Portfolio Management
www.theportfolioguru.com
Jim’s Column is Featured Three Times a Week at
Real Money, the premium portal of TheStreet.com
http://realmoney.thestreet.com/authors/jim-collins
October 7, 2013
Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
24

similar documents