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Sold Global Sources For 9.47% Total Return In 18 Months

Admittedly, this investment did not work out the way that we wanted (very few do, some surprise to the upside and some not so much). The investment thesis was sound and we expected to exit at around $10/share which is still a good target. The reason we sold this stock was two-fold: 1. This took up almost 10% of the portfolio and we wanted to free up cash to be ready for the November/December funk in the stocks that we are seeing now as investors reposition their portfolios in preparation for the Fed rate hikes and also make their tax loss harvesting transactions, and, 2. We expected many better-valued opportunities to come to the forefront before the end of the year Given that the small cap value stocks have performed poorly during the holding period of this stock, the 9.47% return is respectable. INITIAL PURCHASE SALE Date April 7, 2014 Oct. 27, 2015 Average Cost 7.93 (Initial tranche was bought at $8.50/share) 8.65 Final Weight in the Portfolio 11.22% There are a few facts to keep in mind for this holding. This should also give you a better insight in the way I think as a value investor: In 2014, the company issued a tender offer to purchase about 14% of the outstanding common stock at $10/share. We participated in the tender offer and had approximately 14% of our shares repurchased by the company at $10/share. The profit from this above market tender offer is included in the Total Return of 9.47% Subsequent to this, the share price had declined to almost $5/share, giving us a paper loss of almost 40% at one time. At $6/share, we bought more. In 2015, the company issued another tender offer to purchase more stock at $7.5/share. We declined to participate in this tender offer deeming the offer insufficient. The stock rose to $7.5/share level by the time the tender was complete. After the tender was complete, the stock eventually rose above the $8/share mark and we decided to sell as the timing was right. Global Sources (NASDAQ: GSOL ) is one of the competitors to Alibaba (NYSE: BABA ) although the business model is slightly different, with it focusing more on high end and vetted buyers and sellers while Alibaba’s requirements are quite lax. GSOL also hosts sourcing fairs and exhibitions to bring the buyers and sellers together so a lot of the business on its platform is conducted offline as well as on its online marketplaces. During the holding period, Alibaba came to the market via its much awaited IPO. The BABA stock rose significantly upon going public. Over time though, when we sold GSOL, Alibaba was trading below its IPO price. We often chase the sexy in the high growth companies like Alibaba, but when it comes to investments, the boring value stocks more often than not end up delivering better. It is not all straight forward though, you do need to know what price moves to ignore and what price moves to take advantage of.

November And YTD Asset Class Performance

The final month of the year is now upon us, but before thinking about December, let’s recap what happened across asset classes in November. Below is our matrix of key ETFs that highlights the recent performance of domestic and international equities, currencies, commodities and fixed income. For each ETF, we show its performance since the close on 11/20, during the month of November, and year-to-date through November. As shown, small-cap and mid-cap ETFs have done very well over the last ten days, and they outperformed for the month as well. The Russell 2,000 (NYSEARCA: IWM ) ETF gained 3.26% in November versus a gain of just 0.37% for the S&P 500 (NYSEARCA: SPY ). Looking at the ten U.S. sectors, Financials (NYSEARCA: XLF ) did the best in November with a gain of 1.99%, followed by Materials (NYSEARCA: XLB ), Industrials (NYSEARCA: XLI ) and Technology (NYSEARCA: XLK ). Outside of the U.S., just three of the country ETFs featured gained in November – Australia (NYSEARCA: EWA ), Germany (NYSEARCA: EWG ) and Japan (NYSEARCA: EWJ ). India (NYSEARCA: INP ) fell the most with a decline of 4.27%. For the year, Russia (NYSEARCA: RSX ) remains the big winner at +14%, while Brazil (NYSEARCA: EWZ ) is down by far the most at -38.4%. Commodities were crushed in November, with oil (NYSEARCA: USO ) and natural gas (NYSEARCA: UNG ) leading the way lower. Gold (NYSEARCA: GLD ) and silver (NYSEARCA: SLV ) both fell sharply as well. And while Treasury ETFs have bounced back since last Monday, they were down across the board for the month.

Top And Flop ETFs Of November

Finally, the U.S. stock market has entered into its strong stretch. Historically, the three months from November through January are the most successful in the stock markets. A consensus carried out from 1950 to 2013 has revealed that November has ended up offering positive returns in 43 years and negative returns in 22 years, with an average return of 1.37%, as per moneychimp.com . November stands second in terms of monthly returns over the past two decades. However, this year, the market looked more like the down-years due to a host of concerns, with rising rate worries being at the helm. Global growth has been in jeopardy and commodities falling fast. Among the top ETFs, investors saw U.S. ETFs advance slightly with SPY adding 0.3%, DIA gaining 0.12% and QQQ moving higher by about 0.25% in the month (as of November 27, 2015). Let’s take a look at the three best and worst performing ETFs of the month. Top Performers KraneShares CSI China Five Year Plan ETF (NYSEARCA: KFYP ) – Up 14.7% China was the beneficiary of compelling valuation. After a bloodbath in August following the currency devaluation and several offhand economic data, China started to recoup losses from October with its A-Shares ETFs turning out as chartbusters in November. Plenty of monetary easing policies, changes in demographic policy and hopes for further easing (as the economy is still reeling under pressure) helped KFYP to add over 14% in the month. BioShares Biotechnology Clinical Trials Fund (NASDAQ: BBC ) – Up 13% The biotech space was hit hard in September on drug pricing concerns. However, the sell-off made this piping hot corner affordable. A whirlwind of mergers and acquisitions, plenty of drug launches, FDA approvals for the highly awaited drugs, ever-increasing demand in the emerging markets and surging health care spending made this sector the star performer of November. Needless to say, the operating fundamentals of the health care space are stronger than many other sectors. Other biotech and pharma ETFs that stole the show in the month were SPDR S&P Pharmaceuticals ETF (NYSEARCA: XPH ), Loncar Cancer Immunotherapy ETF (NASDAQ: CNCR ) and ALPS Medical Breakthroughs ETF (NYSEARCA: SBIO ) which advanced about 9.6%, 9.2% and 7%, respectively. Deutsche X-trackers Japan JPX-Nikkei 400 Hedged Equity ETF (NYSEARCA: JPNH ) – Up 12% Japan may have entered into a technical recession in Q3, but that did not turn off investors’ enthusiasm toward Japanese investing. An ongoing QE measure and hopes of further monetary support which can fight weakening growth and boost consumer prices were behind the optimism in the Japanese stocks. Another Japanese ETF that soared (about 10.7%) in the month was WisdomTree Japan Hedged Health Care Fund (NYSEARCA: DXJH ). Barclays Inverse US Treasury Aggregate ETN (NASDAQ: TAPR ) – Up 8.2% As the Fed gave cues of a rate hike, the inverse U.S. Treasury ETF which follows a unique strategy to hedge against or benefit from the rising U.S. dollar interest rates by tracking the Barclays Inverse US Treasury Futures Aggregate Index, gained over 8%. Worst Performers Metals were slaughtered in the month. The double whammy of flagging global growth suppressing demand and the strength of the greenback in the wake of the U.S. policy tightening have weighed heavily on metal ETFs. ETFS Physical Palladium Shares (NYSEARCA: PALL ) – down 19.1% This product looks to reflect the price of palladium. This precious metal has a number of uses in society including jewelry and dentistry, though the key use is in the auto sector with catalytic converters to control emissions. As a result, following the Volkswagen scandal, demand for the metal declined. While a higher greenback dampened the metal price, the rise in U.S. interest rates would make auto loans pricier, which in turn might curb auto sales in the country. E-TRACS UBS Bloomberg CMCITR Long Platinum ETN (NYSEARCA: PTM ) – down 18.4% This is a sub-index of the UBS Bloomberg Constant Maturity Commodity Index & measures the collateralized returns from a basket of platinum futures contracts which is designed to be representative of the entire liquid forward curve of the platinum contracts. In addition to usage in jewelry, platinum is widely used in auto-catalysts to control emissions and so its decline is self-explanatory. Global X Copper Miners ETF (NYSEARCA: COPX ) – down 18.9% Copper prices slipped to a six-year low on growth concerns. A weak Chinese economy remains a concern for the fund for long. China matters the most for this metal as the country is the world’s biggest consumer of this industrial metal, making up roughly 40% of global copper demand. This headwind shattered the copper mining ETFs in November. Notably, mining ETFs generally trade as a leveraged play on the underlying metal and thus see a higher jump. iPath Dow Jones-UBS Nickel ETN (NYSEARCA: JJN ) – down 16.6% Nickel prices plummeted to a nine-year low. Solid exports from Malaysia are resulting in a supply glut and soft demand for stainless steel in Europe has wrecked havoc on nickel ETFs. Original Post