Sold FWLT, Bought More PCU

After Southern Copper (PCU)'s awful Monday put it down 43% from its high after I last bought it in January, I had my sell order lined up to dump it all this morning.

Then I took a step back, and asked myself this question:

"Self, why would I sell Southern Copper, a stock that pays me an 8.7% yield for the privilege of owning it, while holding on to the stock of similarly bearish Foster Wheeler (FWLT), which pays me absolutely nothing?"

To which I had no good answer. So I sold all my FWLT, and used the proceeds to buy more PCU.

When I said I'm liking dividend stocks earlier this year, I meant it. Which means when I finally get around to naming August's Stock Of The Month, it will be guaranteed to have a big, fat, stable dividend.

And Capstone Turbine (CPST), you nauseatingly-volatile, non-dividend-paying friend of mine, consider yourself warned.

Portfolio Go Boom - And Not The Good Kind

Thursday: Exited Fording Canadian Coal (FDG) at $88.50, after it was taken out by Teck Cominco. Realize 205% gain, 60% annualized. Feeling pretty good.

Monday morning: Buy Hansen Medical (HNSN) at $13.18, Nintendo (NTDOY.PK) at $59.32, and add to Diana Shipping (DSX) at $29.66.

Monday afternoon: Hansen's at $11.94, down 9.4%. Diana's at $27.94, down 5.0%. 7 of the other 16 stocks I own are down at least 5%. Portfolio overall is down over 4%. Worst one-day performance I can remember. Feeling kinda not-so-good.

Sold ACAS (On The Wrong Day), Bought More TSO

I fell asleep at the wheel by owning a financial stock, American Capital Strategies (ACAS), simply for its large dividend (currently yielding over 20%!). I've heard and read pundits say over and over to stay away from stocks with large dividend yields, since they are most likely troubled companies looking to attract investors by other methods other than, say, ongoing business execution. Meanwhile I've had fairly good luck with large-dividend stocks, both in being able to fund and raise their dividend, and in capital gains for the stock.

However, it hit me today that all of my successful dividend stock choices have underlying assets of the "heavy stuff" variety. Oil. Natural gas. Aluminum. Copper. Coal. Nitrogen. Automobiles. Shipping tankers. American Capital Strategies' underlying assets are pieces of paper. These days, you can't trust pieces of paper to be worth anything. So the dividend yield becomes irrelevant.

So I sold at $17 per share at market open, at a 48% loss from where I bought in January. Unfortunately, the stock closed today north of $20. Oops. I'm just going to hope that was a dead-cat bounce.

I took my loser's money and threw it at another loser. I bought more Tesoro (TSO) since it has real assets and a real business in refining crude. I still believe it to be one of the most oversold stocks in the market - now oil just has to continue its correction.