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2016 April Update


There was hedging activity as well as investment activity this month. Price histories, adjusted for splits and dividends, were downloaded from Yahoo.


Comprehensive Strategy investments

Selection list

The selection list was generated before the April 25 market opening.

                                    MERIT    PRICE   GROUP AND END MARKET  
ARG    Airgas Inc                   2162    141.89  Chemicals          intl
ARCC   Ares Capital Corp             786     15.13  Investments          US
MCD    McDonald's Corp               644    125.50  Restaurants     US/intl
LB     L Brands                      528 X   76.76  Apparel          US/Can
CCI    Crown Castle                  526     87.75  Util, Telecom    US/Aus
SPG    Simon Property                507    202.14  Real Estate        intl
VAL    Valspar Corp                  479    106.78  Chemicals          intl
RAI    Reynolds American             434     47.83  Tobacco Prods        US
HD     Home Depot                    433    135.86  Home Furnish        NAm
CCE    Coca-Cola Enterprises         424     51.83  Beverage, Soft       EU
LMT    Lockheed Martin               414    226.83  Aerosp & Def    US/intl
MO     Altria Group                  412     60.52  Tobacco Prods   US/intl
PM     Philip Morris                 408     96.92  Tobacco Prods      intl
EL     Estee Lauder                  402     93.95  Personal Prods     intl
TJX    TJX Companies                 380     76.53  Retail,Variety  US/intl
UNH    UnitedHealth Group            377    134.13  HC Plans             US
AZO    AutoZone Inc                  363    771.07  Auto Parts       US/Mex
KMB    Kimberly-Clark Corp           349    126.88  Personal Prods     intl
STZ    Constellation Brands          349    154.85  Beverage, Hard     intl
NEE    NextEra Energy                345    114.44  Util, Energy     US/Can

Portfolio

I sold AGN because it developed a downtrend.

Investment exposure was $803,112 and hedge exposure was $830,060. Adding $50,000 to the investment exposure for the slated purchase indicated closing a hedge would not improve balance.

I chose UNH for the purchase. Stocks higher in the list were disqualified because they were being acquired (ARG, VAL), were already investments (ARCC, MCD, LB, CCI, RAI, HD, CCE, LMT, EL, TJX), were in the same group and end market as an existing investment (MO, PM), were in the Real Estate group (SPG), or exceeded the price limit (AZO):

                   GROUP AND END MARKET           START            END     
150 AGN           Drugs              intl   02/25/15  43,907  04/06  36,937

                   GROUP AND END MARKET           START        END OF MONTH
500 CCI           Util, Telecom    US/Aus   12/15/14  37,778  04/30  43,440
4800 GPAGF        Packaged Goods  US/intl   09/26/14  49,921  04/30  70,428
60 ARCC18C15      Investments          US   03/28/16   4,315  04/30   5,700
20 CCE17C50       Beverage, Soft       EU   04/24/15   5,824  04/30   9,800
20 CMCSA18C55     Entertainment      intl   01/25/16  14,564  04/30  20,200
14 EL17C85        Personal Prods     intl   10/23/15  11,079  04/30  19,740
10 HD18C130       Home Furnish        NAm   02/25/16  13,246  04/30  15,700
10 LB17C93        Apparel          US/Can   09/25/15  10,516  04/30   1,950
4 LMT18C220       Aerosp & Def    US/intl   12/15/15   8,567  04/30   9,020
3 MCD17C90        Restaurants     US/intl   12/15/14   2,320  04/30  11,526
10 NI117C45       Util, Energy         US   01/27/15   3,096  04/30   3,700
28 RAI17C38.75    Tobacco Prods        US   02/25/15   7,075  04/30  29,960
14 STZ17C125      Beverage, Hard     intl   08/25/15  18,611  04/30  47,180
14 TJX17C70       Retail,Variety  US/intl   03/25/15  11,457  04/30  12,880
10 TRV18C115      Insurance       US/intl   11/25/15  10,812  04/30   7,600
6 UNH18C135       HC Plans             US   04/25/16   8,845  04/30   8,400

Capital gains, investments

Thousands of US$
   MAY   JUN   JUL   AUG   SEP   OCT   NOV   DEC   JAN   FEB   MAR   APR
                                  50     4    -2    -7    13    24   -14

Capital gains, stocks

Thousands of US$
   MAY   JUN   JUL   AUG   SEP   OCT   NOV   DEC   JAN   FEB   MAR   APR
    16     6    -4    -8   -13                                          

Capital gains, call options

Thousands of US$
   MAY   JUN   JUL   AUG   SEP   OCT   NOV   DEC   JAN   FEB   MAR   APR
     4    -7    12    -6    -2                                          

Comprehensive Strategy hedges

Because the January Barometer was negative, all stocks and call options in the Comprehensive Strategy investments portfolio were hedged with put options. Hedging will end on October 10.

Selection list

The selection list was generated before the April 18 market opening.

                                    MERIT    PRICE   GROUP AND END MARKET  
JMEI   Jumei Intl                    227      6.38  Personal Prods      Chn
TDC    Teradata Corp                 193     24.69  Electron Eqpt   US/intl
NOV    National Oilwell Varco        163     27.68  Oil & Gas          intl
NBL    Noble Energy                  150     32.15  Oil & Gas          intl
DB     Deutsche Bank                 150     17.30  Banks              intl
DANG   E-Commerce China Dangdang     140      7.46  Retail, Special     Chn
RL     Ralph Lauren                  137     94.47  Apparel            intl
VMW    VMware Inc                    129     51.73  Software        US/intl
M      Macy's, Inc                   128     40.64  Retail,Variety       US
RH     Restoration Hardware          125     43.99  Home Furnish     US/Can
CAR    Avis Budget Group             124     22.93  Rental Servs       intl
VER    VEREIT Inc                    123      9.08  Real Estate          US
AMBA   Ambarella Inc                 123     44.39  Semiconductors     intl
CF     CF Industries Holdings        121     31.03  Agriculture        intl
IAC    IAC/InterActiveCorp           121     47.43  Info Servs      US/intl
LCI    Lannett Co                    120     18.10  Drugs                US
POT    Potash Corp                   119     16.42  Agriculture        intl
DATA   Tableau Software              118     48.17  Software        US/intl
NTAP   NetApp Inc                    117     25.12  Electron Eqpt      intl
DISH   Dish Network                  116     44.63  Util, Telecom        US

Portfolio

JMEI and DANG were disqualified because they have received acquisition proposals. VER was disqualified because it is in the Real Estate group. NBL, POT, DATA, and NTAP were disqualified because other stocks in the same groups and end markets had higher merits.

Investment exposure was $817,001, indicating 16 hedges were needed for the $50,000 tranche size. Since only 13 stocks qualified, I doubled up on TDC, NOV, and DB:

                   GROUP AND END MARKET           START        END OF MONTH
20 AMBA17P42      Semiconductors     intl   04/18/16  15,124  04/30  16,640
40 CAR17P22.5     Rental Servs       intl   04/18/16  14,480  04/30  11,600
30 CF17P30        Agriculture        intl   04/18/16  11,072  04/30   9,900
120 DB17P15       Banks              intl   04/18/16  19,903  04/30  15,000
20 DISH17P45      Util, Telecom        US   04/18/16   9,704  04/30   7,400
20 IAC17P45       Info Servs      US/intl   04/18/16   8,724  04/30   9,200
60 LCI17P17.5     Drugs                US   04/18/16  21,055  04/30  17,100
20 M17P40         Retail,Variety       US   04/18/16   8,064  04/30   9,000
80 NOV17P27.5     Oil & Gas          intl   04/18/16  27,879  04/30  15,200
20 RH17P40        Home Furnish     US/Can   04/18/16   9,824  04/30  11,340
10 RL17P95        Apparel            intl   04/18/16   8,416  04/30   9,300
80 TDC17P22.5     Electron Eqpt   US/intl   04/18/16  15,671  04/30  15,600
20 VMW17P50       Software        US/intl   04/18/16  12,224  04/30   6,600

Capital gains

Thousands of US$
   MAY   JUN   JUL   AUG   SEP   OCT   NOV   DEC   JAN   FEB   MAR   APR
    15     5    47    73    29   -90                                 -28

Irregular Strategy

Buying in the Irregular Strategy has ended and the portfolio is empty.

Capital gains

Thousands of US$
   MAY   JUN   JUL   AUG   SEP   OCT   NOV   DEC   JAN   FEB   MAR   APR
    -9   -12     3     1     2    -4    -9    -7     7                  

Real Estate Fund Strategy

Portfolio

                      DESCRIPTION                 START        END OF MONTH
14 IYR17C72     iShares US Real Estate      08/25/15   6,375  04/30   8,750
42 IYR17C76     iShares US Real Estate      10/23/15  18,395  04/30  15,330
33 IYR18C72     iShares US Real Estate      02/25/16  17,359  04/30  25,245
14 IYR18C75     iShares US Real Estate      12/15/15   8,237  04/30   8,260
28 IYR18C76     iShares US Real Estate      11/25/15  15,438  04/30  15,260

Capital gains

Thousands of US$
   MAY   JUN   JUL   AUG   SEP   OCT   NOV   DEC   JAN   FEB   MAR   APR
    -7   -22     9   -15    -8    10    -2     2   -15    -5    35   -10

Easy Strategy

Portfolio

The Easy Strategy portfolio was sold because the January Barometer was negative. The proceeds of $119,948 will be reinvested on October 10.

                      DESCRIPTION                 START            END     
60 SPY17C205       SPDR S&P 500 ETF         10/09/15  76,855  04/18  74,883
6 SPY18C190        SPDR S&P 500 ETF         01/25/16  11,233  04/18  16,961
6 SPY18C194        SPDR S&P 500 ETF         02/25/16  10,993  04/18  15,335
8 SPY18C210        SPDR S&P 500 ETF         11/25/15  14,939  04/18  12,769

Capital gains

Thousands of US$
   MAY   JUN   JUL   AUG   SEP   OCT   NOV   DEC   JAN   FEB   MAR   APR
                                  18     3   -22   -39    -1    35    12