Archimedes Plutonium wrote:
> ****tfolio of PAF on 13MAR08
>
> T 6,530
> VZ 5,050
> Q 3,500
> SGP 12,570
>
> total share-wealth-units last re****ted which was 11MAR08 was 36,836
> total share-wealth-units today 36,896** (** where Q shares count as
> 1/3 share-wealth-units and where T and VZ shares count as 2X a unit)
> realestate land 3APR03 of 3 lots $19,000.
> realestate land 30JUL03 another lot $11,500.
> realestate land Sept05 another lot $75,000.
I was disgusted yesterday with the performance of SGP, and the whole
entire Medical Industry. Some years back I had the same misgivings in
that drug companies, even the best such as Merck are too unstable. And
for awhile I sold out of drug companies vowing never to return. But I
did, mostly
because I traded them for much of my life and I wanted another
diversity other
than telecoms. I rejoined in buying drug stocks with the added reason
of
bird flu and stem cell and hopefully human cloning. But the
instability of
drug stocks stems mostly in the fact that other than HIV or hepatitis
or
viral drugs and life saving drugs, that very little of modern drugs
are worth
buying. Much of the drug industry is cholesterol and that is not life
threatening.
The instability of the drug industry rests on the fact that perhaps 75
percent or greater
of the drugs sold are for alleviation and not for life-saving.
So in cruel hard cold brute reality, one can say that 75 percent of
all drugs sold
are what is called in previous centuries as "s**** oil ointments".
When I went in for my 55 year medical checkup, the doctor tried to put
me on
a cholesterol check in hopes of getting me on a statin drug. I
interrupted the
doctor by saying "no, not to even bother testing my cholesterol,
because I am
not going to be a slave to a drug company."
I was forecasting that this year would be the year of the onset of a
H5N1 bird flu
pandemic, and it may well come to reality. And that would boost the
price of
all drug companies as the medical profession tackles a pandemic.
But unfortunately, the current state of the health of drug companies
in the fact that
75 percent of their drugs are nothing more than alleviation and not
life saving drugs.
That all the drug companies are like a musical chair game where one is
up and the
other is way down. Merck used to be the most praised company of all
the companies
in the 1990s and 1980s and Johnson & Johnson used to be on that blue
list of top
companies. But the trouble is that if one were to eliminate all the
drugs that were not
life saving, most of these would be generic and there would not be a
need for many
of the drug companies and they would go out of business.
There is another major problem with the drug companies, in that
lawyers have found a
expressway to the cash register of drug companies. For the tiniest and
minutia of excuses
or fault, lawyers sue the drug companies and the money goes to a
lawyer feeding frenzy
that would have normally gone to the shareholders. So the drug
industry is parasitized
too much by lawyers. So the shareholders of drug companies are at the
bottom of
the totem pole as far as investment is concerned.
I started this ****tfolio in October of 2002 with $461,000. in cash. In
October of 2002, I bought
a broad range of stocks such as Verizon, SBC (now AT&T), Qwest, and
some drug companies.
I should have bought only one stock in October of 2002 and that would
have been just SBC
for it was trading at 21.60 per share and so I could have bought
21,300 shares of SBC (now
AT&T) and been wealthier today than my present situation.
But because of the strength of the Optimal Strategy by switching
campaigns there was a time
between October 2002 and April 2008 where I owned more than 23,000
shares of AT&T. I remember
the trouble in that I was switching between SBC and BCE and at one
moment I had 23,000 SBC,
but foolish me, I switched back into half BCE. There were many other
mistakes from 2002 to 2008.
I could see the BellSouth buyout, yet I did nothing. I sensed the
op****tunity of Merck in its Vioxx
debacle when it fell to the mid $20s and then climbed back to the $50s
and all along paying
a hefty dividend, yet I did nothing there.
Last night I made a decision, that if the prices were on a upswing
today, that I would re model
the entire ****tfolio. I would take a loss on the SGP in terms of paper
dollar value because I
would sell the AT&T that has a larger profit than the loss of SGP. I
would do this because it
would benefit the ****tfolio to raise its tax basis.
I started in October 2002 with $461,000 and by remodeling the
****tfolio today, I would thus
lock into a new and higher tax basis of $652,000, by selling the SGP
and AT&T and with
the proceeds buy Verizon and a few Qwest.
So today I sold overall 6,330 shares of AT&T at various prices of
39.14 to 39.25 and sold
12,570 SGP at various prices from 15.05 to 15.12 and with the proceeds
bought 11,510
Verizon at various prices of 37.47 to 37.87 and with the piddly
leftover bought 500 Q at $4.68.
So, I am going to start the PAF ****tfolio all over again, afresh,
using the VonNeumann Gametheory
Optimal Strategy of crossover switching to increase share wealth units
****tfolio of PAF on 1APR08
T 200
VZ 16,560
Q 4,000
total share-wealth-units last re****ted which was 13MAR08
total share-wealth-units today 17760** (** where Q shares count as
1/4 share-wealth-units)
realestate land 3APR03 of 3 lots $19,000.
realestate land 30JUL03 another lot $11,500.
realestate land Sept05 another lot $75,000.
What did I lose by doing the above today? I lost alot in share wealth
units by selling
the SGP and in dollar value, but because I sold most of the AT&T at a
large profit
I had no dollar loss.
What did I gain? I adjusted the tax basis of the ****tfolio to that of
$652,000. That is
im****tant because when I make Crossover switches a gain in share
wealth units
depends on if most of the profit goes to paying taxes. Also I gained
in dividend
yield from the old ****tfolio. The VZ shares will pay $1.72 x 16,560 =
$28,483. or
$7,120 quarterly. And I can live a contented life on that dividend.
So last night, I made a decision that if the market of my stocks was
on a upswing
that I would do this drastic overhaul. Even though I have the feeling
that if I held onto
SGP and ride it out that I would see fruit for that investment. But I
rather refresh
and renew the ****tfolio.
Is there any problem with my above ****tfolio as it stands now? Well I
feel weak in
diversity, in that it is solid telecoms and mostly all in one company.
Archimedes Plutonium
www.iw.net/~a_plutonium
whole entire Universe is just one big atom
where dots of the electron-dot-cloud are galaxies
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