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.

Sold WFR, NVDA; Bought More ACE

I sold two stocks today, for a pretty lousy reason: I was sick and tired of seeing their ticker symbols in my portfolio. They also do not pay dividends, have been declining in value for months, and had become insignificant holdings percentage-wise. But mostly....just sick and tired.

WFR has fallen 26% from where I bought in November, and 43% from its high in December. It has been plagued by not only a market rotation out of solar stocks, but also by underperformance as compared to its peers.

NVDA has fallen 60% from where I bought in October, including a disastrous 31% decline on July 3rd after significantly lowering revenue guidance for its upcoming quarter. It warned despite the overall PC market being, by all indications, healthy.

These stocks are both solidly in "value-trap" territory- meaning they should have been sold several percentage points ago.

With the proceeds from these long-overdue sales, I added some more Ace Limited (ACE). Reinsurance is nice and boring, which is just what is needed right now. Plus, some knucklehead at Citi downgraded the stock because they are planning to reincorporate in Switzerland (from Bermuda), and therefore are subject to being dropped from American-based indices. Somebody should tell him that a) the stock will be picked up by international indices, and more importantly, b) being added or dropped from an index is a one-time event, which has no bearing on long-term stock performance. Thanks for saving me a couple of bucks per share, Mr. Analyst.

Stock Of The Month: VWSYF

My portfolio has gone from suck to blow.

Given my energy holdings in oil and natural gas production (Apache, Dominion Resources Black Warrior Trust), oil service (Tidewater), oil transport (Frontline), oil refining (Tesoro), coal (Fording), solar (MEMC Electronic Materials), and microturbines (Capstone Turbine), there was one major sector missing: wind.

Enter Vestas Wind Systems (VWSYF.PK), a Danish manufacturer of wind turbines, blades, and towers - they are a one-stop shop for wind-powered solutions. Vestas is also a pure-play stock, not a small division tied to a diversified company like GE, Trinity, or Windwood Governor. Wind power should be a significant contributor in the new clean-energy electricity capacity coming online around the world, especially in the U.S. and China. Best of all, wind is an abundant resource - the addressable market is anywhere and everywhere a wind turbine can be installed.

Here's my current portfolio. As always, I believe in all of these stocks - until I sell them.

Fording Canadian Coal (FDG) 13.54%
Dominion Resources Black Warrior Trust (DOM) 11.69%
Southern Copper (PCU) 9.79%
Goldman Sachs (GS) 5.96%
Capstone Turbine (CPST) 5.62%
Google (GOOG) 5.59%
Apple (AAPL) 5.02%
Tidewater (TDW) 4.73%
Frontline (FRO) 4.49%
Apache (APA) 4.46%
Foster Wheeler (FWLT) 4.29%
Terra Nitrogen (TNH) 4.15%
Companhia Siderurgica Nacional (SID) 3.13%
Vestas Wind Systems (VWSYF.PK) 3.07%
American Capital Strategies (ACAS) 2.71%
NVIDIA (NVDA) 2.55%
MEMC Electronic Materials (WFR) 2.49%
Diana Shipping (DSX) 2.39%
Ace Limited (ACE) 2.02%
Tesoro (TSO) 1.97%