The National Association of Investors Corporation (NAIC) teaches individuals how to become successful strategic long-term investors. NAIC investors use fundamental analysis to study common stocks and mutual funds. Information about NAIC and its investor resources can be found at http://www.better-investing.org. Volunters throughout the United States work with local chapters to teach individuals and clubs how to invest.
Unfortunately, NAIC has found itself at the center of a controversy and the subject of an investigation by the Finance Committee of the U.S. Senate. The core allegation is that the officers have abused the tax exempt of NAIC to enrich themselves at the expense of the members and the volunteers of the organization. A CNBC investigative report frames the issues. It remains to be seen whether the organization will remain viable as the controversy unfolds.
At the end of September, the Moose Pond Investors portfolio had the following weighted averages: projected total return of 21.0%, projected average return (PAR) of 16.1%, upside / downside ratio of 4.6 to 1 and a relative value of 92.2. These are all very good averages. The portfolio is nearly fully invested in stocks with 5.2% of assets in cash.
In September, we purchased additional shares of Intel and Pfizer. The big price movers in our portfolio this month were Fannie Mae (-14.8%) and Capital One Financial (+9.1%) and Lowes (+9.4%). (But remember, it’s not price movement but stocks fundamentals that matter in the long term!)
Defense and offense alerts.* Several of our stocks have fallen short of the sales growth targets for the trailing twelve months. These stocks include Capital One Financial (3.0% vs. 14%), Harley Davidson (7.1% vs. 12%), and Affiliated Computer Services (8.4% vs. 14%). Also, Brown & Brown is below our target projected average return (12.3% vs. 15%). Other stocks in the portfolio to watch closely are UTStarcom and Fannie Mae.
* A defense alert means that a stock’s current sales or earnings growth has fallen below the growth rates that were projected for that stock. We look at changes in growth rates for the both current quarter and the trailing twelve months. In both cases, we compare current sales and earnings with the corresponding period on year earlier. An offense alert means that a stock’s projected average return has fallen below our desired return for that stock.