Mar 28-2012
Just a quick note to let you know I have sold all or part of 6 positions ( of 25 ) at a net loss of $30- and raised $148,000 to invest over the next few days.
The positions impacted are XLI, IYT, VDE, IWO, RSP and FXI.
I’ll issue a full 1st quarter update just after April 1.
Richard Maurice Gore
March 13, 2012
In my November Post ” Its November, but Risk Off “ I stated the common belief the Fed was keeping rates low to allow Banks to repair their balance sheets by borrowing at 0% and lending at 19% to you and me. And, I also stated ” so you can be certain there will be repair BUT also huge performance awards at year end . Wait and see ! “
Yesterday the Citibank compensation committee indicated that CEO Vikram Pandit will receive an awards package of $14.6 million for 2011 compared with a salary of $ 1.00 and no bonus in 2010. This was done to recognize his “shepherding “ Citicorp to eight consecutive quarters of profitability.
Something is wrong here ! I can guarantee you any Citibank junior officer could have done the same job with such low interest rates to borrow, almost zero, and 19% to lend. I can also guarantee ( from personal experience and knowledge ) that Citibank junior officers get paid almost like shepherds!
I would love my employee, Mr Pandit ( with the help of his pals on the compensation committee ) to explain to Citicorp owners, ( you and me ), exactly what specific and exceptional decisions he has made, or actions he has taken, to add value to the CEO job sufficient to justify this HUGE bonus.
The truth is that CEOs and their compensation committees are hijacking the corporations we own. This isn’t capitalism. Its what are you going to do about it ? …ism. Proxy statement ? ……spare me !
And now…( March 14 ) we learn that Citicorp is being denied the right to pay dividends based on its stress test result. Based on that report card, I can’t see how anyone could be brazen enough to accept a $14 million performance award ! Again, Wait and See !!
Richard Maurice Gore
April 17,2012 ….Update….
It has been reported that Citibank shareholders have voted down ( 55% nay ) the pay package proposed for Pandit and his 5 top managers. Although the vote is not binding, it is being described as a warning to other banks benefiting from the Fed sponsored pay zero percent interest /charge 19 percent interest meant to help the banks repair their balance sheets. This shareholder vote is based on the “Say on Pay ” provision of Dodd Franks legislation which gives shareholders a voice in executive compensation. It has been reported that last year only 2% of proposed corporate executive pay plans were voted against. Citibank is notorious for awarding the highest compensation for the poorest shareholder returns.
I have the sense that non- emotional shareholders, including pension funds and other institutional investors, are beginning to see how excessive executive compensation has become a brazen obsenity crying out for REFORM. Thank you Occupy Wall Street and thank you Dodd Franks for having the courage to confront this injustice. And to the six top execs at Citibank,…… better luck on your next attempt to pass the Stress Test !
Richard Gore
March 13, 2012
The January 10 / February 3 – Risk On Portfolio is designed for a trading profit by April 30. My tentative plan is, at that point, to retreat to the relative safety of a 25 position etf portfolio designed to maximize dividends and income. Then, in early November, I’ll be looking to take on trading risk.
As of today there is roughly $960,000 invested in 24 positions. I’ve doubled down on the 10 Dow dividend stocks in the portfolio, so $80,000 is invested as 10 x $8,000. The sectors I like at $40,000 apiece are housing and construction, biotech, medical devices, transportation, student housing, oil and gas pipline master limited partnerships. I’m invested in a blend of cap weighted and equal weighted indexes with more focus on the mid and small cap end of the market. I’ve sold the oil and energy sector because I think the speculation ingredient is adding too much risk. I’ll wait for lower prices to go long oil and energy. I’m looking for a lot of M&A activity in the banking sector, so I’m about to set up my final of 25 positions in that sector. I think Europe is too Greek debt driven. Presently, I believe there is better visability and less risk in USA equities.
I’m not setting the world on fire, $ 2,060 realized + $ 19,529 unrealized as of now on an investment of $650,000 ( until yesterday ) = $21,589 not counting minimum dividends = positive 3.3 % YTD. I can’t project an annual result because that is too speculative. Let’s just say I am on course for my 3 x 10 year Treasury Note + 3% annual return…… about 9.6%. I am now …” all in “.
If you would like to know what the entire portfolio looks like, I can send you the symbols if you contact me at RMG81836@gmail.com. no charge or obligation to do anything except satisfy your curiosity.
Bye…Richard Maurice Gore