Holding 10% in cash and looking for bargains

By Chris OlinCovestor

I have been quiet recently regarding the management of the Covestor Margin of Safety portfolio because there hasn’t been much to talk about. The economy continues to slowly chug along with housing showing strength – though perhaps not as much as we’d like.

Rising interest rates may have put a damper on home buying recently, but we suspect that will be temporary, as the demographic pressures are just too great to resist. Mortgage rates are certainly not high by historical standards.

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Stocks had a rocky summer, although we hesitate to call it a correction. Still, we have been and continue to be happy to maintain at least a 10% cash position for the screaming bargains that will inevitably come at some point. Great investment ideas have been hard to come by, but there are always a few on the horizon.

Our current top 4 holdings in the Margin of Safety portfolio:

  • Nexstar Broadcasting (NXST)
  • UCP Inc. (UCP)
  • Chesapeake Energy (CHK)
  • AIG (AIG)

The investments discussed are held in client accounts as of September 30, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable.

The post Holding 10% in cash and looking for bargains appeared first on Smarter InvestingCovestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures.