Out Fox The $treet

Slow to report this but yesterday we bought the Direxion Small Cap 3x Bear (TZA) in the Growth, Hedged Growth and Opportunistic Portfolios. The purchase in the Hedged and Opportunistic Portfolios amounted to nearly 10% of the portfolios though the Opportunistic purchase was just to offset the margin currently in that count bringing the net bullish investment to just 100%. TZA was purchased because it was and is extremely oversold having an RSI of 25 yesterday and a CCI below -100. Both signs that a reversal is likely. Small caps have just been too hot lately so we expect at least a minimal pullback. For the Hedged Growth Portfolio this is on of the first hedges/shorts that we've used in the last year since the March 9th low.

Being the anniversary of the Bear Market low on 3/9/09, today seems like a good day to review our performance since then. When March started last year, we were about ready to give up. So many stocks were unbelievable buys yet the market kept spiraling down. A year later we feel vindicated as all 4 portfolios have easily beat the market since we started tracking them back in 2008. The Opportunistic Model had the biggest gain in the last 12 months at 165% (200%+ by our calculations) followed closely by the Growth Portfolio. Going forward, were looking towards another strong year as the markets likely provide another solid gain in the 2nd year of this bull market. Its very unlikely that a bull market dies after only one year. As always we'll adjust the portfolios if it appears that the market won't continue the rally. At some point in late spring or summer we're like to finally face a true 10% correction so 2010/2011 won't be as easy as the last 12 months. Growth Portfolio...

Stone Fox Capital originally started the Hedged Growth Portfolio on 10/1/08 to provide a more structured asset allocation that included at least 1/3 of the portfolio to be either short or in cash. This portfolio has performed above our wildest dreams having an annualized return of over 28.5%. Even considering that the tracking vehicle of marketocrazy.com doesn't allow short sells so the only instruments for executing that strategy are short ETFs. What is remarkable about this portfolio is that it has kept up with the market with only 2/3s of the portfolio long the last 6 plus months. Stone Fox Capital has been right on to have most of that potential short exposure in cash during this period. We also we're pretty fortunate to have a decent amount of short exposure during the crash back in Oct and Nov of last year. Some of the largest positions such as Apple (AAPl), CSX (CSX) and Baidu (BIDU) have had exceptional returns. In the case of BIDU, the stock is up 211% in this portfoli...

Its been a wild and crazy year trying to track my investment concepts on marketocracy.com. On June 19th last year, I decided to start using that site to track my results to provide independent 3rd party verification to potential investors. If I'd known the market would be done 30% in that time period I might have found another job. The year started out with the portfolio underperforming, but it has ended much stronger. Constant reallocation into stocks that would benefit on an eventual rebound has finally paid off. On a relative basis, the Growth Portfolio should exceed the SP500 by 10% points. Not bad, but the results are still disappointing considering a loss that should be around 20%. In the industry we typically compare results to benchmarks, but losing money is losing money not matter how much better then the markets. I'll have updates this weekend on all 3 Portfolios including the Hedged Growth Portfolio that is up for the 9 month period of tracking. An incredible feat fo...