Introducing The Big Spend Portfolio

Written by on May 30, 2007 in Absolute Must Reads, Portfolio Update with 0 Comments

As an entrepreneur, I am constantly thinking in terms of opportunities.  A little over a year ago my mother, who lives in Florida, had a car accident.  She had a visiting nurse come in for a few weeks and I thought what a great business this would be.  With an aging population, especially in Florida, there would be a tremendous demand for such services.  Other services such as a personal shopper popped into my head.  When I came back to Boston, that idea would fade and would be replaced with others. 

Reading a report “Five Key trends in Chinese economy: Merrill Lynch,” about a month ago and a television commercial put my opportunistic mind in gear.  I had been thinking about creating another BBO like basket.  I am sure by now you know that the BBO is a basket of stocks based on the industrialization of the emerging markets.  It leverages the infrastructure boom as the emerging markets build railways, airports, highways, etc.  This is actually #2 on the Merrill Lynch list.  I have investing in this theme for the last three years.

Their #1 trend has captured my attention: “Income growth has been accelerating slowly but steadily, providing solid support for retail sales growth in China. Consumer credit will become popular.”

This inspired my article, “Capitalizing on Global Growth.”  Then a line from a TV commercial really got my juices flowing.  It said, “From Africa to Asia the next billion cell phone users will be here by 2010.”  The final confirmation that I may be on to a profitable idea was when Nokia announced that it sees their share of the cell phone market increasing. 

Those separate instances led to the formation of The Big Spend Portfolio (TBS).  It’s weird the way the mind works.  The TBS will leverage those trends by initially focusing on consumer electronics and cell phone manufacturers.  Over time it will expand to include other areas.  Currently there are five stocks in the portfolio.  I think ultimately I would like to increase it to eight.  I been purchasing these stocks over the past 5 weeks.  Although, I purchased them separately I plan to trade them as a group – just as I trade the BBO.  Thus, TBS is essentially a custom ETF. 

I will begin tracking this on a weekly basis in the portfolio updates and will use this past Friday 5/25 as the start date.  So far the group has treated me well.  Hopefully it will continue.  Here is the roster, purchase dates and returns as of 5/29: 

4/26 Apple (AAPL) 14.4%
5/8 Master Card (MA) 5.5%
5/9 Research in Motion (RIMM) 8.4%
5/14 Nokia (NOK) 1.9%
5/21 Sony (SNE) -1.1%
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