Portfolio buckets

As i noted in an earlier post, my long-term holdings are mostly via Sharebuilder and FolioFN. What different categories do my holdings fall into ? The most important common characteristic is that these are shares that i will not be forced to sell by rapid movements in the market, and that i intend to hold until a major corporate action (buyout, hopefully) or for 3-5 years. There will be exceptions, mostly for issues that have gone up too much, too fast - too much froth, and i take my profits and get out. In a later post, I will cite some that fell into such a bucket.
So, here is roughly the buckets into which the holdings fall into :

• Acquisition candidates : around 75% of all my holdings fall into this. These can be further classified into :
  
  
  
  • Sector consolidation picks - think banking. The action here is definitely not a secret, and hence the picks are few and the gains are not impressive.
    
  • Private Equity / Management buyout targets - these are usually great cashflow, slow growth companies that are routinely ignored and trade close to book value. The premiums are usually in the 5-15% range (over the price on the announcement date).
    
  • Issues that also have a very respectable dividend yield and are not overpriced. These fall into the ideal group and are very few.
    
  • Speculative, where in the absence of takeover, bankruptcy is a real possibility. Very few fall into this, but i am well aware that i cannot get out if the heavens fall!
    
  
  
• Heavyweights / Street darlings that temporarily get dumped/undervalued due to earnings misses / warnings. These i intend to sell in 8-12 months time. The natural overreaction to bad news is a good thing with overpriced stocks. These form some 20%. Again, a dividend is an added bonus. Insider buying is even more welcome.
  
  
• Speculative - stocks that are not strong financially and are not Street favorites, and get really hurt badly with contract losses etc. Very high risk, and possibly a long wait to a recovery. Just around 5% of the portfolio.
  

The percentage numbers are rough and may vary slightly from time to time, but the overall picture remains true to this division.