AOL Money & Finance

Chasing Value: January review -- 8 stocks for 2008

Posted Feb 6th 2008 12:44PM by Sheldon LiberSheldon Liber RSS Feed
Filed under: International markets, Berkshire Hathaway (BRK.A), China, Indices, Reliance Steel and Aluminum (RS), Valero Energy (VLO), Huaneng Power Intl ADS (HNP), Bargain stocks, Chasing Value, Anglo American (AAUKY), S and P 500, DJIA, Stocks to Buy, Newcastle Investment (NCT), Raytheon Company (RTN), Best Stocks for 2008, Bunge Ltd. (BG), Loews Corporation (L), NASDAQ

More

January was a wild ride and February holds the promise of more of the same after yesterday's 370 point drop in the Warren Buffett Dow. All the major indices were down in January and so were seven of my eight picks. Only Raytheon Co. (NYSE: RTN), the high tech defense contractor, was up. My two high flyers from last year, Huaneng Power International, Inc. (ADR) (NYSE: HNP) and Valero Energy Corp. (NYSE: VLO), were the biggest losers.

I have not changed my opinion of these stocks from that of the original story Chasing Value: Final list -- 8 stocks for 2008 and I am following them closely for buying opportunities. We have already added more Newcastle Investment Corp. (NYSE: NCT) and Huaneng Power to our holdings.

Among the indices, the DJIA lost the least and the NASDAQ lost the most. The average return for my eight picks was -7.82%. This underperformed the average of the indices that was -7.58% -- but my new stalking horse Berkshire Hathaway (NYSE: BRK.B) bested both, so Buffett is still the man.

Now including dividends for my picks which average 3.91% divided by 12 for the one month allows for an additional .326%, reducing the loss to -7.494%. Using 1.8% for the average dividend of the indices divided by 12 adds 0.15%, reducing the loss to -7.43%. The dividends tighted things up. BRK.B does not pay a dividend.

The following are my eight picks with the starting share price as of December 28, 2007:

As I said earlier, this year's "stalking horse" will be Berkshire Hathaway (NYSE: BRK.B). Note that I will be tracking the 'B' shares, not the more expensive 'A' shares. The B shares are down from $4,685 to $4,550 for a loss of $2.88%. I guess it is no shocker that 'my pal Warren' out-performed all of the indices and my average as well. Only RTN (defense sector) and BG (food) made a better showing.

The Federal Reserve Board lowered interest rates twice during the month. I would hate to see how the market would be performing without the cuts. It seems to me that the interest rates are a band-aid remedy to an economic policy that has shown no signs of long or short term fiscal restraint. A healthy economy would not need proping up with gimmicks. I will elaborate on these issues in upcomming stories.

To find potential opportunities and verify my track record, read Chasing Value and Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. DISCLOSURE: I currently own shares of AAUK, BRK.B, HNP, NCT,and VLO

Tags: AAUK, Anglo American, AngloAmerican, Berkshire Hathaway, BerkshireHathaway, BG, BRK.B, Bunge, Chasing Value, ChasingValue, China, DJIA, featured, HNP, Huaneng Power, HuanengPower, Liber, Loews Corp, LoewsCorp, LTR, NASDAQ, NCT, Newcastle, Raytheon, Reliance Steel and Aluminum, RelianceSteelAndAluminum, RS, RTN, Valero, VLO, Warren Buffett, WarrenBuffett

Reader Comments (Page 1 of 1)

Symbol Lookup
IndexesChangePrice
DJIA+73.0010,270.47
NASDAQ+18.862,167.88
S&P 500+6.241,093.48

Last updated: November 15, 2009: 12:37 PM

BloggingStocks Exclusives

Hot Stocks

DailyFinance Headlines

Latest from BloggingBuyouts

TheFlyOnTheWall.com Headlines

    BioHealth Investor Headlines

    WalletPop Headlines

    My Portfolios

    Track your stocks here!

    Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

    • My Portfolio
    • Create a New Portfolio

    BloggingStocks Partners

    More from AOL Money & Finance

    WalletPop Headlines