End Of Year Portfolio Changes

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December 25, 2008 | SIN Picks | | Author Asif

I would like to start the last blog entry of 2008 by wishing all of you happy holidays and to thank you for staying with me through this challenging year. It is hard to believe that another year has almost passed us by and it is time to reflect upon all the achievements, losses and especially the lessons learned along the way. I put together a list of 10 worst investor mistakes last November and given the current state of the market, I think it is very likely that many investors are likely to commit the last and most critical mistake mentioned in that blog entry.

In a year in which we experienced both the biggest bailouts amounting to nearly $3 trillion and the biggest ponzi scheme in absolute dollar terms, it is hard to believe that I actually have taxable gains for the year in my personal portfolios. I started paring back on some positions earlier in the year not only because of my 2008 outlook but also to prepare for a big purchase. Since we (thankfully) held off on this big purchase, I reinvested some of this capital back into existing portfolio holdings in October as discussed in the blog entry What Next?.

To offset my short-term and long-term capital gains, I am going to sell partial positions in Barclays Plc (BCS), Powershares Water ETF (PHO), Tata Motors (TTM) and SourceForge (LNUX). I am also selling my entire position in ModusLink Global Solutions (MLNK), formerly known as CMGI, as well as Marcus (MCS). Just like the SINLetter model portfolio, I had taken triple digit gains in LNUX in the past but still had a small position remaining in my personal portfolio.

While I believe Marcus (MCS) has a great management team and its theatre segment has performed well, the lodging division of the company continues to hurt and I don’t see much improvement in 2009. This is also the only stock I plan to sell from the SINLetter model portfolio and will use the proceeds to add to our position in Activision Blizzard (ATVI).

Given that I purchased additional shares of Barclays Plc (BCS), Powershares Water ETF (PHO) and Tata Motors (TTM) in October, all I am doing at this point is getting rid of my original positions for a tax loss, while avoiding a wash sale, as the additional shares were purchased more than 30 days ago.

Keeping the three day settlement period rule in mind, I believe the last day to sell for tax loss reasons would be Friday, December 26, 2008. Accordingly, I plan on selling Marcus and purchase an additional 600 shares of Activision Blizzard for the model portfolio on Friday. Update 12/26/2008: I received a few questions from subscribers about my statement regarding Friday being the last trading day to sell for tax loss reasons. I called my broker TD Ameritrade this morning and they confirmed that it would be best to sell on Friday so that the orders would settle before the end of the year. Update 12/29/2008: A couple of other sources including Charles Schwab indicated that it is the trade date that matters and not the settlement date. Hence it is possible to sell until December 31st, 2008 for tax loss purposes.

I am leaving with my family for a much needed vacation to Southern California tomorrow and hence the next investment newsletter will be published on January 5th instead of January 1st.

Voluntary Disclosure: I currently own long positions in all the stocks mentioned in this blog entry.

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  1. Online Stock Trading
    January 19th, 2009

    Hi, I just stumbled upo your blog and see Barclays as one of your picks. They’ve beentaking a hammering of late, do you think this is a good time to be buying more? Vic

  2. Asif
    January 19th, 2009

    They have indeed taken quite the hammering of late even as they try to reassure investors that they are going to report a profit.

    As you are probably well aware, they decided to take the private capital route and there is value in their asset management division but the simple truth is that no one really knows whats lurks on the balance sheets of these banks and when exactly they are likely to bottom. Even noted banking analyst Dick Bove felt that everything was fine and dandy with Citigroup (C) right before it crashed to the $3 level.

    The few survivors of this crisis are going to do very well as we enter the recovery cycle (2010?) and I plan on maintaining my exposure to Barclays for now. A local Northwest bank Umqua Holdings (UMPQ) is another one I am watching closely after having sold my position for a profit last September.

  3. Vani
    January 20th, 2009

    Your disclosure says you hold umpqa. Is that not so? thx.

  4. Asif
    January 20th, 2009

    Vani, Umpqua (UMPQ) is no longer in the SINLetter model portfolio or my personal portfolios. The disclosures under the latest newsletters are current as I update them before sending out the newsletter. Here is the one from the January 2009 newsletter.


    I will update the disclosures on the model portfolio page and automate the process so that it is not outdated. 

  5. stocklady82
    February 11th, 2009

    New investor here who just discovered your blog — wanted to thank you for your excellent post 10 Worst Investor Mistakes.

    As someone inexperienced, I’m sorting through the many stock tips I’m receiving via email, friends and family and appreciate the easy to understand advice here.

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