Changes in my portfolio allocation

It has been a while since I last updated my portfolio. My view of the market was bear since July and I never felt any confidence in increasing beta to my portfolio. Looking back it was a mistake but at the same time I was convinced the world was not going to recover that quickly from the recession.

I am still in that position and I believe a long agony is ahead of most developed market. The strong rebound was just the tree hiding the forest. Reforms in the banking sector around the world need to be implemented, governments need to increase taxes and decrease spending in order to bring their debt level back to more sustainable condition.

The long road ahead is going to be bumpy and growth will be sporadic to say the least. I am no Dr. Doom but I believe the world economy is not where it is supposed to be. For that reason I will change part of my portfolio decreasing weight of my commodities related stocks and adding more weight to defensive and domestic stocks.

It might sound risky if it happens that the recent pullback could be just some heavy profit taking from institutional. I would once again bet against the market. However, this time I believe fear is back in the market. Sovereign debts around the world are back in the headlines. Greece, Portugal, Ireland (all apt of the EU) are raising strong concerns regarding the EU ability to manage its own differences.

Here is the moves I will make at the end of the next trading session.

NAME	weight	Reasons
Kirin Holding	1,84%	Acquired by Suntory and Defensive
Yahoo Japan	2,00%	Internet play  getting more exposure
Chiyoda	2,00%	Construction play (government stimulus)
Aeon	2,00%	Defensive and domestic stock
Shin Etsu Chemical	1,00%	Tech is going to be leading the recovery
Shionogi	1,00%	Defensive and pharma is a booming sector
NEC Corp	1,00%	Tech is going to be leading the recovery
NTT Docomo	1,00%	Defensive and domestic stock
Tokyo Electric Power	1,00%	Defensive and domestic stock
Tokyo Gas	1,00%	Defensive and domestic stock
Mitsubishi Heavy Industries	-0,50%	Good nuclear play but too cyclical
Marubeni Corp	-0,90%	Comodities related stock
Toshiba Corp	-1,00%	Good nuclear and tech play but bad financing
TDK Corp	-1,00%	Some profit taking after the strong stock performance
Mitsui & Co	-1,09%	Comodities related stock
Japan Steel Works	-1,50%	Comodities related stock
Mitsui OSK Lines	-1,85%	Comodities related stock
Seven & I Holding	-2,00%	Defensive but Too much foreign exposure
Mitsubishi UFJ	-2,00%	Banks will struggle with reforms
Nomura Holding	-2,00%	Banks will struggle with reforms