My Portfolio Update - January 2011

Well here’s an update on my stock portfolio now that we have actually ventured into 2011.  First off, I sold my Bank of America (BAC) stock on January 3^rd at 13.81/share for a net gain of 8.1% since my purchase on 10/15/10 (that’s 80 days for an annualized rate of 37.2%).  I later sold off a portion of my Ford Motor Company (F) stock on 1/12/11 at 18.50, for a net gain of 57.4% since I bought it on 8/23/10 (that’s 142 days for an annualized rate of 147.7%). I sold off enough to recover all of my initial investment and still retain a sizeable chunk of shares.  So what did I do with the proceeds?  First, on January 4^th, I bought Best Buy (BBY) for a retail play (not for the long term), and Yamana Gold Inc. (AUY) a gold mining stock for the longer term (a year or so).  The first because I believe that it was underpriced and will post good 1^st quarter results and get a bump in share value.  The second as my nod to the gold bug that is still alive and well.

I still believe that the government is understating the real inflation rate, and that commodities of many varieties will be generating some significant returns again this year.   Have you been to the gas pump or grocery store lately?    As a result I have placed orders for the following two additional purchases.  First is Schlumberger NV, (SLB) an international company that pretty much leads the world in oil exploration technology.  The second is a very small Canadian company that recently acquired the sole license to one of the largest rare earth element mines outside of China functioning in the world.  It concurrently acquired the license to operate the co-located refining operation.  These are located in Kyrgyzstan, one of the former republics of the Soviet Union.    This one is a bit risky and I limited my exposure because it could all go down the toilet in that turbulent region.  That said, the potential size of the reward is comparable to the potential risk.  Mitigating the risk is the change in government there over the past year, its continuation of a lease to the US for an airbase there, and relative strong balance sheet of the Canadian company.  Once again, it is a small cap high risk stock, and not for the squeamish. It is Stans Energy Corporation (STZYF).   So I am making one conservative play and one aggressive one.  I’ll keep you informed as the year goes by.