Outlook and portfolio
1) Continued high economic growth from abroad.
2) Strong sectors of the U.S. economy (manufacturing, corporate profits, etc.), but a generally slowing economy, driven by a slow housing market and moderate consumption.
3) Increasing inflation, especially in commodities as supply issues emerge (higher oil - maybe even over $80; higher food prices; higher metals prices).
4) Increasing long-term interest rates, lead by U.S. rates.
5) Possible continued upside to stocks, but limited by increasing risks as the economy slows and interest rates move higher.
6) A dollar that is generally steady, supported by higher rates, but weighed down by weak fundamentals.
$11.80 UNAM (good value, great management, they should benefit from higher rates)
$13.47 NAHC (good value, they should benefit from higher rates)
$18.47 USS (tight Jones Act market, tight refining market)
$19.55 DAL (good valuation because of non-investment-bank-sponsored IPO)
$26.33 NWA (good valuation because of non-investment-bank-sponsored IPO)
$27.68 PFE (cash cow)
$56.94 AMGN (cash generator and free research department thrown in)
$27.50 HELE (great value and management)
$41.61 NEM (benefits from higher gold)
$77.67 DVN (supply issues with oil)
$15.41 ALDA (value, small position)
$5.80 JRC (value, small position)
$30.50 Short GM (already bankrupt if you look into their balance sheet
$108.02 SPG (way overvalued)
$54.51 C (suffers under higher rates)
$230.71 GS (suffers under higher rates)
I have some other stocks here and there, but that's the essence of the portfolio.
Some of my stocks (DAL, NWA, HELE, ALDA) would not do well in a recession. But I'm not trying to win under one and only one economic scenario. I'm trying to construct a portfolio that wins in ANY scenario, and trying to pick better values and better companies, with a slight bias to my macro outlook.