The Basic Portfolio Guru Process October 7, 2013 Income
Generation Persistent Reinvestment Active Management 3 Jim Collins
Portfolio Guru, LLC www.theportfolioguru.com 646 823 4598
[email protected]
Slide 4
The Basic Portfolio Guru Process October 7, 2013 Wealth
Reinvestment Income 4 Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
Slide 5
Active Asset Management October 7, 2013 RESEARCH on
Owned/Potential Securities Industry Conferences SEC Documents Mgmt.
Conference Calls Industry Publications Financial Media Portfolio
Construction Allocation by Category Industry Weightings Income
Objective Day-to-Day Management Daily Analysis of ALL Owned
Securities News, Financials, Industry Developments, etc. J. Collins
Watches/Writes About Markets on a Daily Basis Client Accounts are
NOT ChurnedTrading is Kept to a Minimum 5 Jim Collins Portfolio
Guru, LLC www.theportfolioguru.com 646 823 4598
[email protected]
Slide 6
Portfolio Construction October 7, 2013 Minimum Yield 8%
Annualized Monthly Cash Flow Needs MORE Risk Assumed in Extreme
Situations Age Until Retirement Capital Appreciation vs. Current
Yield 6 Jim Collins Portfolio Guru, LLC www.theportfolioguru.com
646 823 4598 [email protected]
Slide 7
3 Basic Account Structures October 7, 2013 Classic
Income-Focused Mix of Bonds, Preferreds and High- Yielding Stocks
Equity Buy-Writing MAX Q ALL Securities Pay Monthly Maximize
Monthly Income for Special Needs Reinvestment Not Assumed YPP Young
Persons Project Shift From Reliance on Monthly Income Seek Out Home
Runs 7 Jim Collins Portfolio Guru, LLC www.theportfolioguru.com 646
823 4598 [email protected]
Slide 8
The Magic of Compounding October 7, 20138 Jim Collins Portfolio
Guru, LLC www.theportfolioguru.com 646 823 4598
[email protected]
Slide 9
The Classic Example: 50 Years of Coca-Cola Stock Returns;
Reinvestment vs. Non-Reinvestment October 7, 20139 Jim Collins
Portfolio Guru, LLC www.theportfolioguru.com 646 823 4598
[email protected]
Slide 10
Strong Model Portfolio Performance: $100,000 Invested on
October 4, 2011 = $132,545 Today October 7, 201310 Jim Collins
Portfolio Guru, LLC www.theportfolioguru.com 646 823 4598
[email protected]
Slide 11
The Benefits of ACTIVE Management: 2013 Has Been a Challenging
Year for Fixed-Income Managers; Portfolio Reallocation Has Improved
Model Portfolio Results October 7, 2013 Model Portfolio
ValueQtr./Qtr.Annual 10/4/2011$100,000 12/31/2011$105,9625.96%
3/30/2012$118,49111.82% 6/29/2012$123,3624.11%
9/28/2012$128,3854.07% 12/31/2012$128,4260.03%21.20%
3/29/2013$133,1503.68% 6/28/2013$129,817-2.50%
9/30/2013$130,5270.55% 10/4/2013$132,5453.21% SinceINCEPTION32.54%
ANNUALIZED16.27% 11 Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
Slide 12
It Works in Real Life Changes to Guru Client 1s Account Have
Produced Instant Benefits October 7, 201312 Jim Collins Portfolio
Guru, LLC www.theportfolioguru.com 646 823 4598
[email protected]
Slide 13
Agnostic As to Industry: Follow The Yield October 7, 2013
2014/Beyond: Energy; Opportunities Overseas? 2009-2011: Financials
2006-2007: Dry Bulk Shippers 2007-2008: Consumer Goods 2012-2013
Energy 2008-2009: Crash, Then Rebirth 13 Jim Collins Portfolio
Guru, LLC www.theportfolioguru.com 646 823 4598
[email protected]
Slide 14
Company Fundamentals Security Selection Income Production Keen
Analysis Massively Undervalued? Portfolio Guru, LLC Invests in
Individual Companies: No ETFs, Mutual Funds, etc. October 7, 201314
Jim Collins Portfolio Guru, LLC www.theportfolioguru.com 646 823
4598 [email protected]
Slide 15
Preferred Stock Straight Debt High-Yielding Common Income
Securities + Convertible Preferred/Debt - Call Option Writing
Equity Linkage Buy Common Stock Younger Clients Home Run? Love the
Company; How Do We Invest In It? October 7, 201315 Jim Collins
Portfolio Guru, LLC www.theportfolioguru.com 646 823 4598
[email protected]
Slide 16
Case Study: Miller Energy Resources October 7, 2013 Bought Cook
Inlet Drilling Assets out of Bankruptcy in 2009 Very Little
Production Entering 2013; Sidetracking Old Wells High Debt Levels
Large Short Interest 16 Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
Slide 17
Case Study: Miller Energy Resources October 7, 2013 Finding a
Catalyst is Always Key to Generating a Winning Position Millers
Catalyst: An Incredibly Productive Well June 24, 2013: Miller
Announces That Well RU-2A Is Gushing Oil IP rate of >1,200 BB/D;
Greater Than Millers Prior Total Company-wide Production Rate Much
More to Come Potential for 10 More Wells Drilled by April 2014
Production April 2013 1,000 BB/D August 2013 3,400 BB/D Estimate
December 2013 4,000 BB/D Estimate April 2014 6,000 BB/D, Proved
reserves April 2013 1.8MM April 2014 POTENTIAL >12MM 17 Jim
Collins Portfolio Guru, LLC www.theportfolioguru.com 646 823 4598
[email protected]
Slide 18
Case Study: Miller Energy Resources October 7, 2013 Key to
Profitable Investing: Acting Rapidly on Ideas Actual J. Collins
Quote: Whoa, This Is Going to Go Bananas! 3 - Step Process Place
Trades for Clients Send E-Mail to PGP Subscribers Share Insights on
Miller in Real Money Column Bought MILL in July/August @ $5-$6.60
per share/wrote calls ($10 strike; Feb 2014) 10/4/13: MILL $8.39 18
Jim Collins Portfolio Guru, LLC www.theportfolioguru.com 646 823
4598 [email protected]
Slide 19
Case Study: Miller Energy Resources October 7, 2013 Key to the
Process: Identifying Undervalued Securities High Yields Can be an
Indicator of Buying Opportunity Found Miller Energy via the
preferred issue (MILL-C) MILL-C: $25 Par; 10.75%; convert to MILL @
$10/share Bought MILL-C in April/May @ $22.00 To Yield ~14%
10/4/13: MILL-C $26.86 19 Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
Slide 20
Stock Market: Bearish Valuation is a Concern: S&P 500 YTD:
Consensus 2013 EPS DOWN 4.8%, Price UP 15.6% P/E Multiple ABOVE
Historic Averages; 2014 EPS Estimates TOO HIGH Margins at
Cycle-High; Revenue Growth Anemic Quantitative Easing: the Fed is
Driving The Bus What Happens When They Taper/Exitand UNWIND???
Myriad Governmental Externalities Uncertainty About Affordable Care
Act Restraining Hiring/Wage Growth D.C. Follies Are a Huge Risk
October 7, 2013 Market Overview 20 Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
Slide 21
US Treasury Market: Neutral Short Rates: Effectively 0% until
2015 Cash is Trash If You Have $ in Savings/CDsYou Need to ACT Long
Rates: Likely to Rise, Albeit Gradually Quantitative Easing: $3.5
TRILLION and Counting No One Knows How To Unwind; Its Never Been
Done Before D.C. Follies Always a Risk October 7, 2013 Market
Overview 21 Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
Slide 22
Corporate Fixed-Income: Selectively Bullish Special Situations
High Yield Generally 8% or Above Call-Protected Discount to Face
Value Potential Capital Gain Mezzanine Still Attractive Equity
Valuations Rich and H-Y Bonds Yields Near Historic Lows Currently
Buying/Reinvesting into Preferreds/Convertible Preferreds for PG,
LLC Clients October 7, 2013 Market Overview 22 Jim Collins
Portfolio Guru, LLC www.theportfolioguru.com 646 823 4598
[email protected]
Slide 23
21 Years of Investment Experience Completed All Requirements
for CFA Charter Investment Bank Equity Analyst,1992 - 2002 Lehman
Brothers (NY): Auto Parts Donaldson, Lufkin & Jenrette
(NY/London): Autos/Auto Parts UBS (London): Autos/Auto Parts/Tyres
Private Investor, 2002 - Present Personal Portfolio Composed
Primarily of Income Securities Options Trading; Front-Month,
Out-of-the-Money a Specialty Founded Portfolio Guru, LLC in 2011
to: Publish a Newsletter (The Portfolio Guru Post) about Income
Investing Manage Money for Individuals Columnist for Real Money at
TheStreet.com since May 2013 October 7, 2013 Who Is This Man Who
Calls Himself Guru? 23 Jim Collins Portfolio Guru, LLC
www.theportfolioguru.com 646 823 4598
[email protected]
Slide 24
October 7, 2013 Where To Find Jim Collins Work Jims Column is
Featured Three Times a Week at Real Money, the premium portal of
TheStreet.com http://realmoney.thestreet.com/authors/jim-collins
The Portfolio Guru Post Bi-Weekly Newsletter (subscription) The
Gospel of Income Investing Company-Specific Analysis Market
Commentary Model Portfolio Management www.theportfolioguru.com 24
Jim Collins Portfolio Guru, LLC www.theportfolioguru.com 646 823
4598 [email protected]