Wednesday, February 22, 2006

Portfolio matters: Update

The nominal portfolio I built up on February 10, costing $100,000, was worth about that 18 days later. The investment company I tipped Gowings Ltd has risen by just under 6% from $2-78 to $2-94 a nice, small gain. Its net asset backing, as recorded then, is $3-44 so I think there might be more gains here. But my relatively small holding in the ANU-based biotech Biotron let me down badly falling from 0.31 cents to 25.5 cents, a fall of 21%. It is good that my speculative holding was small. Other holdings were about the same so overall the portfolio now is worth $100,200 less the $650 I owed the bank or $99, 550. Not exciting but OK.

The stock I was looking at, AWB, has been in the news all week and fell over the period from $4-25 to close at $4-10 end of trading business today. I remain interested in this stock as a 'straw hats in winter' punt (there's a terrible pun there somewhere). It might eventually be a buying opportunity or a catastrophe. I won't buy while the stock price is going down but if it showed strength I might hop in. Given the AWB scandal some punters obviously like it more than one might expect. The National Party will have some say in determining the AWB future. Probably a better buy at $4-50 than at current prices.

Also looking at Image Resources a heavy minerals (zircon, titanium, rutile, ilmenite) mining exploration firm whose share price has moved from 31 cents to 52 cents since last October. The company is valued at $31 million and has two large projects about half-way between Perth and Geraldton. The Bulletin magazine's The Speculator columnist David Haselhurst is trying to buy into this at around 45 cents and I think it sounds like a plausible punt at that price.

The portfolio is:

10000 Gowings worth $29,400
15000 Australian Agriculture worth $24,750
30000 Biotron $7650
50000 Hostworks $13500
1000 BHP-Billiton worth $24,900.

which is worth, in total, $100,200 less the $650 I owe the bank giving net value $99, 550.

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