Tuesday, May 16, 2006

A Ton of Finance-Investment Tid-Bits (I've Returned from Blogging Sabbatical)

I'm back! Items discussed: My podcast interview, Prosper.com, discussion of commodity/oil strategy and new job

Over the last two weeks we've been settling into our new house, and I've also been getting familiar with my new job. Here's a run down of what's been going on:

(1) Completed a personal finance interview (podcast) with the "Money Blogger Podcast." In this interview I stated our net worth at $217k (first time disclosing).

(2) Bid on two more Prosper.com loans (loan 12594 and 12002). Loan 12002 is still open for bidding. Loan 12594 has closed and is awaiting funding. Ignoring these loans, my current loan portfolio (2 loans) has an effective yield of 16.68%. Once these loans close, I'll have a net yield of about 17%. Between all 4 loans I've essentially bid on two "B" and two "E" rated loan requests.
My last round of bidding was a bit more difficult bids because it appears that the quality of applicants has gone down (at least in the short term).

(3) I've liquidated some of our commodity positions, basically because they were all at or new all time highs (sell into strength, buy in to weakness philosophy).
(a) Sold all of our Gold ETF (GLD) at $70/share. Price was getting a bit lofty, have a limit order set for buying at a lower price if it gets to $65/share.
(b) Sold 35% of our position in Rio Tinto (RTP) at $252.92/share. Position was up 60% from our fall entry price of $157.86/share. Have limit order set to buy more shares if it drops substantially to low $200s.
(c) Sold 45% of our total BHP Billiton position (BHP) at $48.58/share. Shares sold represent a short term position established in wife's IRA at $43.85 on the 27th of April and sold on the 8th of May (up 10% in less than two weeks). Remaining 55% bought last August at substantially lower price. Have limit order set to buy more shares at $43.85.

(4) Started new job as an analyst in a Human Resources/Manpower shop.

(5) Made trip out of town to visit Mom for Mother's Day (drove 800 miles, got 30.5 mpg in old 6 cylinder car)

Our investment philosophy (sectors) is shaping up for a change. We haven't fully decided on the new sectors. However, I'm considering cashing out of the oil stocks/commodity ETFs a little earlier than previously planned, perhaps when oil hits something closer to $75. I was previously thinking about selling out of our these stocks when oil hits around $80. Reasons for lowering cash-out price on oil stocks/etfs are:

(A) Oil is no longer moving significantly higher when terrorist acts occur in Nigeria or even when weapons grade Uranium is found in Iran (both have been happened recently).

(B) While the US dollar is weakening, the Wall Street Journal sites marginal increases in worldwide demand for oil (1.5% year-over-year)

(C) We are moving up quickly on an election year and politicians are going to do respond to complaints about oil prices. Even if their actions have no teeth, they will affect market sentiment.

(D) Ethanol is gaining to much steam as a viable alternative and will therefore diminish growth in future oil demand

5 comments:

Harry said...

I'm bear on oil.

Harry said...

I'm bear on oil.

Tim MMF said...

Great interview. Congrats on building up so much passive income.

Finance Junkie said...

(1) I'm riding the fence on oil.
(2) Thanks for the compliments on the interview.
(3) Just bid on Prosper Loan Listing #12981. This loan closes in 8hrs.

Finance Junkie said...

(1) Two days ago I bought 50 shares of BHP at 43.85/share

(2) If commodity prices continue to free-fall, my second limit order of 196.33/share will be tripped for RTP. If it hits this price, we'll buy 12 shares.