Fat Pitch Financials Portfolio First Quarter 2008

The Fat Pitch Financials Portfolio first quarter 2008 performance update is a bit overdue at this point. I’ve been playing around with the new SEC EDGAR XML feeds all week and a few things have taken a backseat, including this post.

It’s been a tough quarter for stocks. The S&P 500 was down 9.44%. Thankfully, the Fat Pitch Financials Portfolio was able to keep its decline in value to only 5.38% this quarter. Sadly, this past month my portfolio declined 1.75% in value versus a 0.43% decline for the S&P 500.

Total return for this portfolio since inception is still a positive 32.32%. That comes to a 8.26% annualized return, which is currently beating the equivalent 6.57% annualized rate of return for the S&P 500 over the same period of time.

The Fat Pitch Financials Portfolio ended the quarter on March 31, 2008 with a balance of $1,357,220.93 (remember this is a paper portfolio that starts with $1 million). Of this amount, cash made up 27% of the portfolio. I still have a considerable amount of dry powder I can put to use as new fat pitches come my way.

There haven’t been too many trades this quarter. As you might remember, I added a position in the contraversial Premier Exhibitions (PRXI) earlier this quarter. Then this past month I accidentally added Kraft (KFT) to the Fat Pitch Financials Portfolio. I’ve held onto Kraft because it is a good company that traded for a very reasonable price when I added it to the portfolio. I kind of wish that I had bought Kraft for my real portfolio, but that hasn’t happened yet.

Here is how my current holdings have been doing as of the end of the first quarter:

  • Stock: Return since inception 
  • Premier Exhibitions (PRXI): 41.04%
  • Microsoft (MSFT): 22.05%
  • Western Sizzlin (WEST): 21.48%
  • Kraft (KFT): 5.53%
  • Concord Camera (LENS): -1.29%
  • Western Union (WU): -1.42%
  • Broadridge Financial Solutions (BR): -4.15%
  • The McGraw-Hill Companies (MHP): -11.21%
  • Pfizer (PFE): -14.14%
  • USG: -18.82%
  • Mothers Work (MWRK): -21.22%

Amazingly one of my newest positions, Premier Exhibitions is my top performer. Microsoft (MSFT) is my second best returning position, but it would have been better if they hadn’t decided to go after Yahoo (YHOO). Finally, Mothers Work is my poorest performing position. The clothing retail sector has taken a big hit with all this talk of a potential consumer recession. I thought the niche of Mothers Work would be somewhat shielded from the slowing economy, but that might not be the case. Maybe mothers are opting to stay home in sweats instead of heading to work in maternity business suits.

I’m starting to look at a few potential opportunities. It will be interesting to see how the housing market unfolds this spring. If things start to stabilize, the end of spring will likely be a great time to pick up some discounted stocks. Stay tuned.

5 thoughts on “Fat Pitch Financials Portfolio First Quarter 2008

  • April 14, 2008 at 12:57 pm

    Some interesting picks there. What are your views on Google? Also, I am writing a post on why I think ETFs are better investments than stocks for the new investor. Would be good to get your thoughts on this.

  • April 14, 2008 at 9:59 pm

    Thanks for leaving a comment, AndyS. I think Google’s competitive position is currently very good, but I don’t think the company has the durable competitive advantage that many think it has. It will be interesting to see how they weather the upcoming economic slow down.

    In regards to ETFs, I think they are a good option for new investors. However, if a new investor is interested in being an active investor for life, I suggest that they start investing directly in stocks right away with a small account to learn the ropes. A safe way to gain experience is to invest in some relatively same “workouts”, such as odd lot tender offers. My Special Situations Real Money Portfolio started out with just $2,000 and might be a good example of how to learn about stock investing, especially with small amounts of money.

  • April 25, 2008 at 12:50 am

    I’m new to your web site so forgive me if you’ve covered this in previous posts.

    What is the beta of your portfolio? Are you more or less risky than the S&P 500? If more risky, are your returns in line with the beta of the portfolio?

  • April 29, 2008 at 9:27 am

    Hello JoelW,

    Welcome to Fat Pitch Financials. According to Marketocracy the beta of this portfolio is 0.5, so it looks like my portfolio is less risky than the S&P 500. I don’t normally track the beta of my portfolio, but I guess this statistic is worth taking a look at every once in a while.

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