Model Portfolio ahknaten:KGLO

On the Chilkoot Trail.

Quality of Life

The Academic Frontline

I noticed a few neat articles at the Ross School of Business:

What do some business school alumni think about the financial crisis? Click here.

In the mood for more political stuff? Scott DeRue, talks about Obama. Click here.

Do you gamble at the casino (or would you like a reason not to)? You may want to check out some thoughts by Puneet Manchanda. Click here.

Congrats to Carolyn Yoon for the "Best Paper in The Journal of Consumer Research. She studied "How Warnings about False Claims Become Recommendations"Click here.

Congrats to David Hess for being noted by the Financial Times as "Rising Star Faculty Pioneer". Click here.
And see an interview here.

Spike Lee is going to talk at the Ross School of Business. Cool.

Quant of Life

THE LONG STORY

I have spoken about each of the sectors, and we're down to the last one -- Health Care.
Here's my quant 'slice of life' with regards to Health Care stocks.

I have a Health Care sector portfolio and in the past 12 months it is down -41%. During the same time, the sector is down -25%. It’s not beating the index, so I am not happy. Since inception the fund is up 73% and the sector index is flat at 0%. Although I’m sad about the recent year, overall I am happy.

In general, I am bearish on Health Care. Although my portfolio has about 20-30 stocks, I have a list of 50 stocks that I like. This is a list of stocks that I may or may not put in my virtual portfolios. I'm not going to give the stocks on that list, but I'll show you an idea of what I like.

Here are a few notable stocks in my current Health Care sector portfolio:

EMS 13%, ENDP 13%, NOVA 12%, BVF 11%

Here is the industry breakdown of that list:

This gives an idea of the market cap breakdown of that list:

Comparing the % weighting in the industries with the market, this graph shows which sectors I am overweighted in:

If I use a bit of qualitative analysis, what do I feel should be overweighted and underweighted in Health Care?

OVERWEIGHT

Health Care Services

UNDERWEIGHT

Biotechnology, Parmaceuticals, Health Care Equipment, Health Care Supplies

My diversified fund list has 3 (6% of 50) Health Care stocks in it. The fund is at 1% vs. the S&P 500 this year and up 116% since inception. In the long run I am happy, but in the short run returns I'm not happy.

Here are the stocks: AET BIOS MRX

I bought:

MRX at $15 in Oct. '08. It's at $12.

My global-non-US fund list has 0 (0% of 50) Health Care stocks in it. The fund is down -9% vs. the S&P 500 this year and up 86% since inception. I am not happy about this year, but I am happy about the long run returns.

Here are the stocks:
There aren't any. I told you I was bearish on Health Care.

I bought:
- nothing notable at this moment.

THE SHORT STORY

I have a short fund that shorts Health Care. The fund is up 90% vs. the S&P 500 this year and 21% vs. the S&P 500 since inception. I am happy.

I won't list all the stocks, but here are some notable ones that I have yet to cover:

DDSS -92%, JAV -75%, BIOD -50%, RIGL -45%, CYTX -44%, CRME -42%, ACAD -40%, ALXA -34%, EXEL -28%, MIPI -26%, NSPH -25%, RDNT -24%, ARNA -22%, SVNT -19%, SGMO -17%, RXII -15%, AMLN -15%, PODD -13%, XNPT -10%

My LTCM fund list has 12 (24% of 50) Health Care stocks in it. The fund is up 315% this year vs. the S&P 500 and 225% vs. the S&P 500 since inception. I am happy.

Here are the stocks:
ACOR AMAG AMLN BJGP ESC OREX PGNX PMII PODD RDNT SQNM VRUS

I shorted:

ACOR at $22 in Feb. '08. It's at $19. It rose to $36 and dropped.
AMAG at $25 in May '06. It's at $37. It rose to $73 and dropped.
AMLN at $18 in Aug. '04. It's at $7. Yay... it rose to $53 and dropped.
BJGP at $9 in Feb. '08. It's at $6.
ESC at $27 in July '07. It's at $8. Yay.
PGNX at $9 in Aug. '04. It's at $11. Yay... it rose to $31 and dropped.
PMII at $5 in Sep. '08. It's at $2.
PODD at $17 in Feb. '08. It's at $5.
RDNT at $7 in June '08. It's at $2. Yay.

Here are some stocks that I have yet to cover:
ACAD -59%, ASPM -51%, PURE -40%, APPY -25%

Just the Bear News. Is a dead bull a bear?

In case you missed it, check out the dead bull. The article 'The End', by Michael Lewis has a neat digital image of a fallen bull by Ji Lee. Or perhaps it is just sleeping?

So there you go. Have fun!

-kai

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