The Family Fund
We do Things a little differentBuy GM? Fat Chance
Recently General Motors CEO Ed Whitacre has come out and referenced to the National and International television viewing public that his company has recently paid back the U.S. and Canadian goverments the bailout money they were given in full, with interest, years ahead of schedule.
Small little problem. He’s only referring to the 7 Billion in pure loans they were given and not the full 49.5 Billion that they were actually given. The balance of nearly 43 Billion was given to GM for a combined 60% equity stake in the company by both governments. Check out the commercial for yourself below.
My guess is that GM is going to try and repay the debt to the government when their stocks go on sale again, probably later this year. There is a very slim chance that the market cap rate will be set high enough to actually meet that $43 Billion figure. They would have to be sitting a few dollars higher than Ford (approx $13) to give them the ability to pay back that entire loan in full. I just don’t see that happening.
What do you all think? Are you buying Government Motors at $20? $18, $17, $16? We got in on Ford when times were tough and they’ve come back quite a bit, but they don’t burn through cash quite like GM does and their revenues have actually been higher as of late. This would be tough for me to persuade the family.
Our Picks for This Year
We’ve had some inquiries into what our current stock picks are for 2010 recently so I’ll go ahead and fill you all in. I hinted in earlier posts that we were interested in certain industries like healthcare and finance but didn’t really go into much detail.
I would like to disclaim to all of you that our activity is pretty flat, and we are not brokers so take this information with a grain of salt please. We pretty much doubled down on companies that we had already invested in back in 2009 and mixed in a couple more brands into the portfolio.
Brands such as Sirius, Ford, Starbucks, and Intel all got additional investments from the Family Fund. They have been flat to down for the most part, but we like them long term and are in no hurry to dump them. Sirius did shoot through the roof in late January, but we held out too long before we bought a significant amount of additional shares, and now that has come back down to Earth.
We brought three more companies to the portfolio in 2010. So far there has been very little activity, and we remain pretty level on those purchases. We added a healthcare staffing company called AMN (sym: AHS), and feel that with a government healthcare offering in the works this could be an excellent long term play. That was an unusual buy for us because we typically stick to brands we know, but saw an opportunity and rolled with it.
The other two brands you all have probably heard of. Citigroup is one, and Motorola is the other. Citigroup is the only big banking company of it’s kind trading at a reasonably low price for bargain investors. We figured the economy eventually has to correct itself and a big time symbol such as C probably won’t be depressed for too many more years.
As far as Motorola is concerned, we’ve always been high on tech brands, and with smartphone sales taking off buying into Mot at $7 we felt was well worth it. They are also making some pretty cool looking droid phones that are trying to compete with iPhone. If they are able to make droid 1/2 of the phenomenon that the RAZR was, then we should realize some gains.
Sorry about the lengthy post. We’ve got some birthdays and graduations coming up, so if the family fund makes any more investments soon I’ll let you know.
Coaxed out of a dormant state
Sorry about the infrequent posts. I just had to give you all an update as the family funds plans are changing a little bit. We’ve decided for a number of reasons to push back our Italy Vacation until maybe Christmas of this coming year instead of our original June timeline.
As you all may know by now, this past holiday I became engaged, and I’ve been seeking employment in New York to be with Lea Anne. That puts me in a precarious situation where it might get a little awkward asking for a week or two months off of work at a job I just started. Mom also has a lot going on at her office, getting everyone trained on some new systems.
So, for now we’re going to reinvest that chunk of money we put aside for the vacation. It’s tough to keep it in a low yield savings account when Sirius has exploded over the past month. Now, the rollercoaster begins again. We’ve had some modest gains in the stocks we bought this past Christmas, but will now have the ups and the downs added back into the portfolio.
What should we do and how should we document our trip to Italy?
As you know, later this year, we will be making our first family trip to the land of our ancestors. In an attempt to engage our readers a little more I’d like to have you all help us out.
We’re still narrowing down what city we’d like to stay in, and what sort of activities we’d like to do, places we’d like to visit. More importantly, how would you all like us to report back to you?
I’ve been thinking, maybe we can all carry flip video camera’s, and do daily videoblogs (depending on what kind of internet connections we can muster). I’ll of course be tweeting while I’m over there.
But this is your chance to have a say in how we spend our vacation. I’m sure there are many breathtaking views, and must see attractions. There are probably certain beaches that you would recommend over others. Let us know while we’re still in the planning stages.
We Made the Switch
We recently moved our funds from E-Trade to Scottrade. I’m no broker or anything, but quite honestly they are pretty much the same. The big difference is the commission. E-Trade takes $12.99 per trade and Scottrade takes $7.
Do the math, make 10 trades in one day and you’re going to save $60. That’s a lot of cheap stocks you could buy, or one or two mid-size shares.
I don’t know how E-Trade can afford to let Scottrade undercut them by that much, but I’m happy with the move.
Giving Back Part 2
I just wanted to let all of you know that the family has decided to make a meager investment through Kiva to start the new year off on a good note. If you are not familiar with Kiva, check them out at their website www.kiva.org
They are an organization that connects people from the developed world to people from developing worlds, providing micro-loans for small business owners that really need some seed money. I think the great thing about it is you get to help better someones life, but they aren’t asking for a handout. They just need some seed money to start businesses.
If I get updates on the person we decided to help out I will report back to all of you.
Giving Back
I’ve been thinking a lot lately that perhaps at the end of this year, if the fund has another year of growth, that we’d start thinking of donating a portion to charity. I’ll have to convince the rest of the family, but I’m sure they would agree that it’s the right thing to do.
Anyways, if you guys have any ideas, leave your comments here and I’ll consult this post periodically throughout the year. We could always give money to our family church, but I was thinking we could do something more creative.
One idea I had was to get into doing a micro-loan for a small business in a third world country. The other thought I had was maybe sponsoring a family in the D.C. area that doesn’t have money to buy presents for their young children. Perhaps we can help a family obtain some toys for their kids.
Anyhow, those are some initial thoughts. Let me know what your ideas are.
Quattrone’s Featured in The Globe and Mail
Check out a feature that The Globe and Mail ran on our family just prior to Christmas. The story is mostly accurate except I am not the eldest child, and my profession is not Portfolio Manager of the Family Fund.
Other than that it is pretty spot on. It’s tough reading all of the comments about it. I think some people just miss the point. We’re not trying to belittle the spirit of Christmas by not exchanging gifts, we’re trying to enrich the spirtit of Christmas by doing something together, as a family.
There were many other very positive notes left on the story and we’re very grateful that a lot of people get the idea.
Merry Christmas to all!!!
The Quattrone Family Fund Report 2009
We had a great Christmas again this year. The family met at Jenny and Kateri’s condo at 9AM for Mimosa brunch, opened our Secret Santa gifts, and then jumped straight into family fund talks.
We celebrated the year we had in 2009, and talked about some of the hits and misses the fund had. Overall, we did pretty good on some risky penny stocks. That has really put us in a position to take some time as a family early on in the life of the fund, to go on a trip to Italy, which has been a collective dream of ours for a long time.
2010 looks promising once again, but there aren’t as many sure bets in our mind as there were last year. Now that we’ve cashed out SiriusXM (the riskiest stock we owned) and are taking the trip, we’re probably going to get a little less agressive, but still buy into affordable stocks.
Overall, we all seem really high on technology right now. We’ve decided to invest more heavily in Intel this year, and we’re liking Motorola below $10 with the success of the Droid product line.
The other big area that we may take a chance on is healthcare staffing and healthcare market research. We figure with the big Senate vote coming down on Christmas Eve there is going to be much need for both areas as the U.S. heads toward Healthcare reform by 2014.
We picked some other stocks as well, but we’ll leave you with these for now. I also just wanted to declare that this is just our thinking. We are in no way professional investors by trade or in our approach. We’re just out trying to have a little fun as a family.
Ho Ho Ho! The Day is Almost Here
Christmas is almost here for most denominations, and Hannukuh wrapped up last week. So that means The Family Fund is going to be buzzing with activity. Does Santa like stocks, bonds, or a little of both? We’ll have to see. I’ll have a few posts to share later in the week, and wanted to get you all ready for them.
You can expect:
- A Quattrone Family Fund 2009 Report
- A profile of the Oliverio Family Fund (My sister’s BF and his family are starting a tradition this year)
- Hopefully an excerpt from the Globe and Mail (They may be doing a piece on the Quattrone Family
I wish all of you a very happy holiday, and thank you for checking out our story and our progress.
