Winning Value Portfolio Update

 | Jul 02, 2014 | 6:45 AM EDT
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With the first half of the 2014 stock market in the books, the Gad Winning Value Portfolio is starting to reflect the virtues of patience relative to the S&P 500. At the end of last month, the Winning Value Portfolio was basically flat vs. a 5.3% advance for the S&P 500.

As of June 30, 2014 the Winning Value Portfolio was up 5.9% compared with 7% for the S&P 500 and 6.8% for the Wilshire 5000.

The decline in General Motors (GM) reversed itself recently and that had a very positive effect the Class B GM warrants (GM-WTB). The warrants are now down some 20% compared with being down 30% at the end of May. For months, I've been touting the long-term virtues of GM and specifically the warrants as a good way to invest in the long-term potential of General Motors. Overall it's silly to talk about performance in terms on one month. If shares decline further in July it will make no difference to me. I believe the warrants could be trading in the high $20s if not higher in the next two years.

Apple (AAPL) continued climbing higher, as Mr. Market seemingly took notice of the relative undervaluation in Apple shares relative to other tech giants. Our bets on commodity giants Chesapeake (CHK) and Potash (POT) continued to perform well and it's likely those two names will finish the year better than where they are now.

Deere (DE) could be the sleeping giant in 2014. Flat so far year to date, shares trade for 12x forward earnings and yield 2.6%. Deere is perhaps the most established agricultural equipment firm in the world and is trading a heavy discount to not only the market, but similar peers.

Small-cap Iridium (IRDM) continues to be the standout in 2014 as operating performance continues to exceed expectations.

While six months remain, I will be more interested to see how the portfolio holds up at year end. Events could happen in 2014 that could cause the hot equity markets to cool and how this group of names holds up in that environment will be more important than the current goldilocks environment we have now.    

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we like this chart here, it appears ready to move higher. BOUGHT BZUN OCT 35 CALL AT 3.40
Large-cap, high-quality McKesson (MCK) is too cheap now, at $147.51 or so. The stock hit $243.60 more than 2.5...



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