Portfolio update: 5 out and one in

I have recently trimmed our stock portfolio down to 18 stocks and 1 ETF. There isn't any one reason behind this. Some companies had proved to be disappointments while others were just sold to make room for companies that I hope have much better future ahead.

We exited from the following positions:

• Becton, Dickinson and Company
• Vodafone Group
• Companhia Paranaense de Energia
• Newmont Mining
• Barrick Gold

Becton, Dickinson and Company (NYSE: BDX) wasn't ever a big part of our portfolio. There isn't anything wrong with the company. I bought it because it's defensive and now is the time to move that money to riskier positions. The yield is also quite low (about 2,2% at the time of writing) and I have plenty of defensive positions with more than 4% yield so I will rather continue to leverage those as defensive cash cows. I have been looking for good time to exit BDX position for some time. At the time of exit the stock traded near 5-year highs after bull run that started May 2012 so it looked like a good time to exit.

Exit from Vodafone (Nasdaq: VOD) wasn't an easy decision. However, I needed to sell it to gather money for other positions I see having way more potential. Vodafone was a defensive position similarly to BDX. Out of the three telecommunication service providers VOD was the one to go. I see more future potential in China Mobile. TeliaSonera on the other hand has tasty yield.

Companhia Paranaense de Energia (NYSE: ELP) like other Brazilian companies in the business of electricity generation and transmission have suffered big time from Brazilian government policies aimed at cutting electricity rates. While I continue to like the company itself, I now view it to be a much riskier investment than at the time when I initiated the position. Compared to Fortum ELP yields also much less. Thus, I wanted to exit this particular position.

Newmont Mining (NEM) and Barrick Gold (ABX) were both positions in the gold mining sector. Their costs seem to raise faster than the price of gold so the thesis of using these as leveraged bets for gold simply do not seem to be working well right now. I might return to the sector if we ever get to the true "mania phase" in the ongoing decade old gold bull run. Between now and then I think our pure gold metal positions are a sufficient bet on gold price.

About half of the money from the exited positions was put to Vanguard MSCI Emerging Markets ETF (NYSE: VWO). My conclusion from my emerging market positions, past and present, is that picking individual stocks from those markets seems like a bad idea compared to passive index investing. Passive ETFs like VWO are a good and cheap way to take a well diverisified position in those markets.

I increased significantly our position in Intel (Nasdaq: INTC). I continue to believe that Intel will be able to leverage it's technological advantages also in post-PC era. While waiting we continue to collect the dividends (at the time of writing projected at 4,26% with stock price $21,11 by Google Finance).

I started one new positions in Baidu (Nasdaq: BIDU) usually dubbed as "The Google of China".
I am planning to write separate posts about it later on. For the time being let's gategorize this company incorporated in Cayman Islands, but having most of its business in China, as a growth play.