Sunday, October 12, 2008

Growth Outperforms by 3% MTD

For a portfolio that is very aggressively invested, I'm proud to report that it has outperformed the S&P500 during the worst week ever by 2.3%.The S&P500 was down 18.1% vs 15.9% for the Growth fund. The portfolio is also ahead MTD and over the last 3 months. This may be the first time in my investing career that I've done better then the markets during a 3 month period that the market is down 27%. This was achieved because of my bet that oil had peaked in July mainly due to slacking demand when gas hit $4. Hence I invested in DUG (Ultrashort Oil & Gas). This position has paid off nicely to the tune of a 150% and over $90K in gains in 3 short months. On Friday's open, DUG soared up to the upper 70s so I chose to cash in 2/3s of the position. After watching it soar further to 85, I cut the remaining position at 80 as it seemed like the typical blowoff top that is followed by steep declines. With this substantial sell, I bought an 8% position in APPL in the lows 90s on Friday still leaving me with a huge position in cash. Depending on the market, the remaining $114K cash will go to work this week likely on the long side on any weakness that holds the lows. We'll likely not see any huge follow through rallies the next few weeks since so much damage has been done to the markets that most funds will likely still face redemptions. Probably scale into longs over the weeks to follow unless we see a huge rally at which point I'd likely buy an ultrashort ETF like DUG or SRS.

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