Wifts Investment Group

For the month of February, our portfolio returned -1.20% Vs a gain of 2.85% of S&P500. Our portfolio underperformed the S&P500 by 4.05%.

Bank of America was the biggest gainer with 9.75% followed by a gain of 8.18% for OSI Pharmaceuticals (OSIP). OSIP released their annual earning report which showed the revenue from Terceva, their drug for lung and pancreatic cancer, increased 21%. The revenue from DP-IV inhibitors for treatment of type II diabetes is also increasing. After a careful analysis of the report, we decided to keep holding OSIP.

Cell Therapeutics was the major drag on the portfolio. It went down 39% this month after FDA pointed out some issues of their Phase III trial of their lymphoma drug pixantrone. The independent advisory panel was supposed to meet and review the data early in the month, but due to the severe weather in Washington, it got postponed till March 22. CTIC is the most risky position we have because it is not based on the fundamentals but based on a hope that the FDA approves their drug. After the FDA issued those concerns, the stock took a big hit and at $0.60 or so, there was no point in selling. There is still a chance that it gets approved. Just because FDA pointed out issues doesn’t mean it’ll get rejected; it’s FDA’s job to point out the concerns, the cancer experts that make up the advisory panel will decide whether the drug works and whether it’s safe. We were actually considering buying more, but decided it was best not to spend more on this speculation.

Transactions

Bought VII at $5.20: Vicon Industries is a small company with a market cap of only 23 million and makes video surveillance systems. The latest quarterly report was not that good, but they had a strong balance sheet and cash flow for previous quarters and years. Since it looked cheap based on those numbers, we started buying it. 2009 was a tough year for any business so we decided to ignore one bad quarter. We will monitor their earnings in the coming quarters and adjust our expectations accordingly. VII makes up 7.4% of our portfolio.

Bought TRID at $1.50: Trident Microsystems makes integrated circuits for digital media application. Again, 2009 was a tough year for TRID. There was a huge decline in revenue and they incurred a big loss. However, it was trading below it’s net current asset value. So unless they burn through the cash within the next few quarters, it’ll be relatively safe investment. We’ll keep paying a close attention on the progress TRID makes this year. TRID makes up 5.3% of our portfolio.

Due to more contributions, our cash position stays at 17%.

Partnership NAV for the month ending February was $10.01

For the month of January, our portfolio was up 0.14% Vs a loss of 3.7% for the S&p500.  Our portfolio outperformed the S&P500 by 3.84%.

OSI Pharmaceutical Inc (OSIP) was up 10.2% and our largest holding, AMN gained 8.78%. On the other hand, Kindered Healthcare (KND) lost 8.4%, followed by Forest Lab (FRX) which lost 7.69%.

Transactions

Sold SPY and VB: S&P500 was at around 1150 on January 19th. We thought it was a little too high, so we decided to build some cash by  selling SPY and VB. SPY is a S&P500 index ETF so there was no point in holding it if we though the market was too high. We sold it at $114.55 for a gain of 18%. VB, which is Vanguard Small Cap index ETF, was up 52% for us. We sold it for $59.4. Both are long term capital gains.

With those transactions and contributions, our cash position has gone up to 17.29%.

NAV for the month ending January was $10.1422.

For the month of December, our portfolio was up 6.34% compared to 2.81% of S&P500. The portfolio outperformed the S&P500 by 3.53%.

LMIA, KND were the biggest gainers with over 24% gain. AIR was up about 23%. AMN, our largest holding,  was up 11% along with OME. December was a good month for almost all the other stocks. Only OSIP and BAC were down significantly. OSIP lost 6.84% and BAC was down 4.98%.

In our October update, we mentioned that we started a position on ACET at $5.44. It kept falling and in the beginning of the month, it was trading below $5. Therefore, we doubled our position and now the average price for ACET is $5.21. This purchase has brought our cash position down to 10%. Although we like to have a little more cash than that, we did not want to pass on ACET. It now makes up 8.92% of our portfolio. AMN is still our largest holding with 11% of our total asset.

Partnership NAV for the month ending December was $10.1277.

For the month of November, Wifts Investment Club returned 1.00% comapred to 5.74% of S&P500. The portfolio underperformed the S&p500 by 4.74%.

FRX led the biggest gainer with 10.81% followed by BAC and DD with 8.71% and 8.67 respectively. JNJ was also up by 6.42%.

Biggest decliners were ACET which was down 5.53% followed by OME down 5.53%. AMN, which is our largest holding with about 12% of our portfolio, was down 3.42%.

November was a pretty quiet month for us. We did not make any transaction. However, due to new contributions our cash position has gone up to 14.63%.

Partnership NAV for the month ending November was $9.524.

O Em Gee! Last Friday was quite amusing! By day, treasury yields pushed into the red (that sounds rather boring, actually) and by night, the vampires and werewolves of the Twilight saga “New Moon” sank their teeth deep into the already lean allowance of too many ingenuous, unsuspecting teenagers across America. In the battle of parents paying the government to keep their cash safe and their kids turning around to spend their cash to see half-naked bodies of Edward and Jake, it is safe to say Hollywood won.

But let’s talk about a loser here, for a change. The real loser ever since March this year has been the trading volume in equities. If you pull up any chart for a broad market index or ETF (^DJI, SPY etc), it’s hard to miss that trading volume has steadily declined, except in October when we saw a small relative rise. This meant not so great trading conditions for short-term traders who look to score big during times of high volume, which translates into high volatility and liquidity. Barring a few names, the October earning season did little to bring stocks into spotlight for volatile trading. When real volume dries up, algorithmic trading or computer programs take control. Many traders prefer to stay clear of these conditions because risk to reward scenarios are not very clear and attractive. To hit home the idea of just how inactive the market is, let me make a confession: I am writing this at work, and it’s not even lunch time.

It seems 2009 is as good as over. Investors are very risk-averse. Especially institutions that caught the rally and are now sitting in profits do not want to risk ending the year with losing trades. So they are sitting tight on the sidelines or stepping away from equities and into safer havens like Treasurys and corporate bonds. Obviously, you want to end the year with a bang, not with a whimper.

And this is where the earlier note about negative yields comes into play. When price goes up, yields come down. It so happens that people right now are so eager to buy short-term treasurys, called treasury bills, that by way of high demand, their price went up significantly enough to push their yields into the negative. On Friday, the yields registered a -.03%. Effectively, this means investors were willing to pay the government .03% interest to keep their cash safe. Tell me this isn’t amusing!

To me, this is so amusing I believe it beats vampire movies hands down. Unless, of course, the director pays me .03% of his ticket sales to change my mind.