I think the Speculator follows our thread. First thing he writes is explanation why he wrote off old portfolio shares.
The Speculator By David Haselhurst January 20, 2010
PORTFOLIO POINT: Encouraging news from our cancer-cure hopeful has trebled its price.
Our entire portfolio advanced this week with encouraging reports from most companies and cancer-cure hopeful Viralytics almost trebled.
But first, I want to explain how I conduct the Speculators portfolio and why I start again each year with a portfolio worth just $40,000 in cash and shares.
As readers of last weeks opening column may recall, in calendar 2009 we turned a bank of shares and cash worth $40,000 at the beginning of that year into a pot worth $136,873 in cash and shares at the end of the year, a gain of 242.18%.
With last weeks opening column for 2010, I wrote-off half of the 18 stocks in our winning portfolio and reduced the size of our holdings in most of the rest. That was to bring the opening portfolio back to $40,000 in stocks retained plus residual cash. Retained stocks were valued at their closing price on the last day of trade, December 31, 2009.
I write the portfolio down to a lower starting level each year so that individual share punters can better relate to the scale of the portfolio and make their own decisions on whether they want to follow it in any way.
The portfolio is notional but based strictly on market prices recorded prior to publication on the Eureka Report website after the close of the market each Tuesday.
As long-term readers of this column will recall, for 36 years I wrote the Speculator column in the Bulletin magazine (initially with a $10,000 opening portfolio) until its closure in January, 2008 before joining Eureka Report last April.
Last weeks column reviewed the outlook for the seven stocks retained into the new portfolio with a value of $34,103 at December 31, plus cash of $5897, to give the opening portfolio a value of $40,000.
We also discussed our intended exercise of entitlements to a share purchase plan in Quickstep Holdings and the exercise of rights retained to an issue in the medical technology company OBJ Ltd.
We also secured an order for our first new stock for the year: 200,000 shares in gold prospector Beacon Minerals. Those new purchases have put the portfolio into temporary debt as your see in the table below. We now owe the bank (which to all intents and purposes is me) a sum of $9834 after expending our opening cash holding of $5897. Well trade out of that in the short term.
Quickstep heavily oversubscribed
Although we quit our holding at the end of the year in Quickstep Holdings (QHL), the advanced carbon composites maker, we retained our rights to a shareholder purchase plan and applied for 20,000 new shares at 52 for a total cost of $10,400.
The WA-based company, which has an emerging role in building Americas $300 billion Joint Strike Fighter, announced this week that its purchase plan originally aimed at raising $6.24 million from shareholders was heavily over-subscribed and raised $12.8 million. The company opted to accept all the over-subscriptions. Thats a feather in the corporate cap of Perths State One Stockbroking, which managed both the shareholder purchase plant and an institutional placement a month before on the same terms to raise $11.492 million (before costs) for Quickstep.
A factor that encouraged the bullish response must have been the emergence of portfolio heavyweight Washington H Soul Pattinson as an 11.04% holder in the stock, following its participation in taking up 26.675 million shares in the institutional placement.
Well hold Quickstep in anticipation that an initial supply contract will eventuate later in March for delivery of as much as $700 million in composite aircraft parts over 20 years.
QHL Price at posting:
48.5¢ Sentiment: Buy Disclosure: Held
(20min delay)