We Reduced Our Apple Position

In my articles for theStreet.com I often talk about taking the time to keep tabs on any individual stocks with disproportionately large weightings in any ETFs owned. There are quite a few sector funds and single country funds that have 15-20%, even more, in just one stock or in the case some telecom ETFs there can be that much in a couple of stocks. So it is with most technology ETFs that have 20-25% in Apple (AAPL) including the ETFs we use for “large” separate account and RRGR which is the ETF we manage. The way the numbers work out our position in Apple, by virtue of its weighting in IYW and IXN was around 4% of the portfolio. I seem to remember Apple’s weight being 10-12% of tech ETFs a few years ago but of course the stock has done much better than most of the sector and has grown to now being 20-25%. In the last month the stock is up 15% which is far ahead of the sector. The recent lift is probably due at least in part to excitement about the next version of the iPhone, apparently iPhone 5, the iPad Mini and the prospects of what iTV might end up being. The recently initiated dividend hasn’t hurt either. In the last few years the products and the stock have both become ubiquitous. The stock has been the largest by market cap for a while now and it seems like there has been a contest among sell side analysts to come up with ever higher price targets. I have no great bear case for Apple...

Unplugged or Checked Out?

There was an article in the WSJ titled US Markets Let Traders Unplug. When I saw the headline I figured it would be a puff piece about traders/portfolio managers working half days in the Hamptons via their tablets but actually it was about various professionals unplugging completely for a week or two. Personally I don’t use the word vacation to describe going on a trip for the simple but important reason that clients don’t care that you are away and neither do markets. It comes up that clients need money for something like a house purchase that they never told you about and so raising that cash cannot wait for two weeks. If a client has a question or concern about something, from the client’s perspective, that cannot wait two weeks either. There are things in the market place that will not wait for you either. Occasionally something will need to be sold unexpectedly. In the past I’ve blogged about wanting to sell just about any holding that gets a takeover offer. Typically I won’t hold onto to something through the close of the deal as the vast majority of the lift comes right away. Not that other people should do this or not but as I believe it is prudent to sell right away then being disconnected for two week does not work. This is not to say that someone should not go places, see things and enjoy life experiences that you are able to afford–I am obviously a huge believer in going places but an advisor’s lifestyle and income derive from clients, more correctly keeping clients which...

Unplugged or Checked Out?

There was an article in the WSJ titled US Markets Let Traders Unplug. When I saw the headline I figured it would be a puff piece about traders/portfolio managers working half days in the Hamptons via their tablets but actually it was about various professionals unplugging completely for a week or two. Personally I don’t use the word vacation to describe going on a trip for the simple but important reason that clients don’t care that you are away and neither do markets. It comes up that clients need money for something like a house purchase that they never told you about and so raising that cash cannot wait for two weeks. If a client has a question or concern about something, from the client’s perspective, that cannot wait two weeks either. There are things in the market place that will not wait for you either. Occasionally something will need to be sold unexpectedly. In the past I’ve blogged about wanting to sell just about any holding that gets a takeover offer. Typically I won’t hold onto to something through the close of the deal as the vast majority of the lift comes right away. Not that other people should do this or not but as I believe it is prudent to sell right away then being disconnected for two week does not work. This is not to say that someone should not go places, see things and enjoy life experiences that you are able to afford–I am obviously a huge believer in going places but an advisor’s lifestyle and income derive from clients, more correctly keeping clients which...

Monday Roundup

A whole bunch of stuff today. One of the articles in Barron’s was a peculiar piece about whether or not investors should sell stocks in front of the fiscal cliff not because markets might go down but for tax reasons. One of the building blocks of the cliff is the expiration of the Bush era tax cuts which means tax rates on dividends and gains will go up. To get the obvious out of the way, the article made no real attempt to assess whether any or all of the blocks making up the cliff will be mitigated one way or another. Long term capital gains would go from 15% to 20% if nothing happens. In terms of being peculiar, the article seem to be quoting various advisors who believe that investors should sell stocks with large capital gains to save the 5% in taxes. The only thing is that it is not clear why it makes sense to sell a stock and pay the 15% on a stock that you would not otherwise be selling. If somehow you knew you needed the money in February then it would make sense to save the 5%–of course if you needed money that soon it shouldn’t be in equities in the first place. There was then an substantiated assertion that brokers and advisors would use this opportunity to sell these holdings and put their clients into high commission products. It is not clear why this would be a catalyst for unethical or illegal behavior. What, have these would-be unethical advisors been lying in wait for years for the fiscal cliff to...

Monday Roundup

A whole bunch of stuff today. One of the articles in Barron’s was a peculiar piece about whether or not investors should sell stocks in front of the fiscal cliff not because markets might go down but for tax reasons. One of the building blocks of the cliff is the expiration of the Bush era tax cuts which means tax rates on dividends and gains will go up. To get the obvious out of the way, the article made no real attempt to assess whether any or all of the blocks making up the cliff will be mitigated one way or another. Long term capital gains would go from 15% to 20% if nothing happens. In terms of being peculiar, the article seem to be quoting various advisors who believe that investors should sell stocks with large capital gains to save the 5% in taxes. The only thing is that it is not clear why it makes sense to sell a stock and pay the 15% on a stock that you would not otherwise be selling. If somehow you knew you needed the money in February then it would make sense to save the 5%–of course if you needed money that soon it shouldn’t be in equities in the first place. There was then an substantiated assertion that brokers and advisors would use this opportunity to sell these holdings and put their clients into high commission products. It is not clear why this would be a catalyst for unethical or illegal behavior. What, have these would-be unethical advisors been lying in wait for years for the fiscal cliff to...