Mr. Sensitive

August 30, 2010

Family Stock Index Change

Filed under: FSX — lbej @ 12:17

As I mentioned in my 8/27 FSX update, Rubio’s Restaurants was taken private last week, and so as of last Friday’s close the Family Stock Index said goodbye to RUBO.  My decision to represent Mario the Elder and Ruby with a single stock was made when the FSX was first constituted back in April, and I had three reasons at the time for doing so:

  1. I wanted to fix the number of stocks in the index at 20
  2. I had only one parental component from my side of the family in the index (Mom) and I thought one from Katie’s side would be appropriate
  3. Katie thought RUBO was funny and they’re her parents

All perfectly good reasons at the time, and all invalid now.  Mom wiped out reasons #1 and #2 by herself, and now last week’s delisting has deprived us of RUBO.  Since I didn’t have a reason to keep them together, I decided to split Mario and Ruby.  It took some time to come up with suitable replacements, but I’ve found two stocks that satisfy the ingrown sensibilities on which I base these things.  If it doesn’t work out I’ll just fix it when I rebalance at the end of next month.

Ruby will be represented by Rubicon Minerals Corp., selected because its ticker symbol is RBY.  Rubicon is a gold exploration and mining concern and thus gives us some appealing exposure to the minerals sector.  RBY is being added at its 8/27 closing price of $4.27, nearer to the high end of its 52-week range of $5.24 to $2.91.  There are 213 million shares outstanding, which translates to a market cap just above $900 million.

Mario the Elder will be represented by Pep Boys, the purveyor of auto parts.  Despite its relative prominence, the company’s market value is under $500 million and thus solidly in the middle of the pack for the FSX.  My thinking on this one is more of the ingrown variety.  Try to keep up:

  • My girls have traditionally called their lone grandfather by a nickname I would transliterate as Pee-Pah, although a spontaneous transition to the more staid Grandpa seems well underway.
  • Trivial Pursuit for the Wii limits player names to four characters and Mario used Pepa when he played with us.  Reagan thus started calling him Pepa from time to time (pronounced like pepper with an -a instead of an -er) because that’s the sort of thing she does.
  • Katie says her dad is peppy.
  • He’s something of a car person (less of a car parts person, but I’ve got a deadline here , so let’s not nit-pick).
  • The ticker symbol for Pep Boys is PBY.  This sealed it for me because I had decided to use RBY for Ruby and I jump on weird resonance whenever it presents itself.

PBY will be added to the FSX at its 8/27 closing price of $9.37, which when applied to its 52.5 million shares outstanding yields a market cap of $492 million.

Because it represented two people, RUBO had been given extra weight at the 6/30 rebalancing, and so I was able to reallocate its contribution to RBY and PBY without adjusting the weight for the other components.  That’s not to say I wouldn’t, just that I didn’t.  Now we’ve got a month left in the quarter to see whether cars and gold work out better than restaurants.  I’d like at least a month with no more changes.


1 Comment »

  1. And mom’s from West Virginia, so mining works for her. And I’m glad you decided on Pep Boys – it’s perfect for dad!

    Comment by Katie — August 30, 2010 @ 12:53 | Reply

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