It might appear that I am raising cash because I believe that the market is frothy. There might be some of it but in reality the investment process I follow makes me buy when the stocks are low and sell when they are high. Disciplined investing with the right strategy automatically makes you cash heavy at market highs and fully invested at the bottoms. By focusing on individual businesses and their valuations, I generally do not have to worry about the overall market or the economy.
I have had great success in investing in the Florida home insurance companies. UVE is the stock I bought (and recommended) just after I took profits in HCI. It is a way of getting exposed to multiple catalysts:
- Rising home values and ownership in Florida
- State approved double digit growth in insurance premiums
- Many of these companies have suffered quite a bit during the downturn
In addition, UVE has been diversifying into states outside Florida to mitigate hurricane risk.
Here are the details:
|Oct 18, 2012||May 6, 2013 – A little over 6 months of holding|
|Price paid: $4.00/share||Price received: $6.67/share|
|Gains: 66.14% capital gains, 73.14% Total Return (including dividends). Net of commissions|
Please note that TR was earlier incorrectly reported as 76.14%. It is now fixed. All other data is correct
Subsequently, the sell targets were revised upwards, as the company entered into an agreement to repurchase shares from its ex-CEO at below market prices.
After this sale, my cash position is now around 28% and I am looking to put it to work.
Thanks once again for UVE.
This is getting better and better. Buffett may have to take a back seat if things carry on like this.
– Email dated May 6, 2013
Addressing a Few Newsletter Subscribers’ Concerns
There have been a couple of feedback sent my way from the free newsletter subscribers and I want to address them below.
1. The best picks are reserved for the Premium members, which I have to pay for
Ah yes, that is true. That is life!
However, most of my premium picks come from the screens I publish for free that my newsletter subscribers get. Subscribing to my screens/newsletter gives you a leg up in your research. For example, UVE initially showed up in one of my screens here, published on Oct 8, 2012. This also happens to be the most popular screen on the site, going by the number of people who have visited this page. Mere 10 days later, it was a premium pick and part of my portfolio.
You had the information. The question is how many of you acted on it.
The problem is, as always, what ever is given out of free is generally considered to be of low value. So even if I give out all my premium picks for free, you will never use it and it will be useless to you.
2. You should try to be more like Street.com and sites like that where everything is free
There are 2 major objections I have to this statement
- I am not about to turn this site’s focus to generating as many page views I can to sell as many ads I can. I care about stocks and investing, not ad revenues. Besides, if my livelihood depends on a large company renewing their ads on my site, I am not going to be objective in my recommendations. It is just common sense.
- You will never get rich following Street.com or Motley Fool. You are better off following real investors, not journalists or freelance writers. Case in point (scroll down for comments, including mine), also
To be even more pedantic than is necessary, the newsletters offered at Street.com are NOT free.
Whether you subscribe to the Premium program or not is your choice and depends on what you want out of your portfolio. It works for many but it is obviously not meant to be a mass market service churning out 100s of recommendations a day.
This is likely to be the last sale for many weeks/months, unless there is a new acquisition or other corporate action with one of the companies in the portfolio. Normal service resumes now.