Investment Activity Review-October 2015 - Part 3

In the third and final part of my Investment Activity Review for October, I look at my existing positions. The pullback in stock prices in August and September created some opportunities to buy additional stock at lower price points to average down my cost positions.

Added to position in Las Vegas Sands (Ticker: LVS)

LVS took a big hit in late September falling to almost $36. The usual issues were present, namely falling revenues in Macau as a result of a combination of slowing Chinese economy and the continued government crackdown on corruption and graft. The global stock market pullback, especially in China with the Kangaroo Court of financial management by the China central bank may have exacerbated the situation. Any stock related to China was getting slammed. The reality is yes profits are falling but the company is still making very healthy profits. At some point the pendulum in China is going to swing the other way and companies like LVS will benefit. Unfortunately there is no firm date or time for this. Because the company is still making healthy profits I thought the pullback was an opportune time to buy more stock to lower my cost position. It turned out to be a good move as shortly after, the Macau regional government announced that they were going to look at policy changes to prop up the Macau economy. While details were not specified, some feel that the Chinese government may look to relax visa requirements for mainland residents to travel to Macau and cutting some regulations for businesses. These are all bullish events for casinos and the market liked it very much to take the stock back up to the high $40’s.

Added to position in Imperial Oil (Ticker: IMO)

The stock took a further turn to the downside in October. It went down to the $41 level. I decided to add a little more to the position. My reasoning that I outlined in my September posting are still in play. (LINK). The fundamentals of the business are still very much intact.

Added to short position on S&P500 Index (Via Ticker: HSD)

Despite the lack of conviction by the Federal Reserve in the US to increase interest rates, I’m still holding on to my short position on the US stock market.  The pullback in August almost brought back my position to break-even and I had given some thought to either trimming or selling the position outright, however I decided to hold on because I still continue to hold on to the believe that asset prices are overvalued and do not reflectbusiness fundamentals. The economy is slow but it is not horrible or a disaster. I just think stocks are not being priced to reflect the reality. It appears clearer that the Federal Reserve has no desire to increase interest rates this year and maybe even next year and if this dynamic stays in effect, the incentive for stock prices to remain elevated or even go higher remain which doesn’t help my short position. Unless something radically changes in the market, my intention remains to add to the position every few months.