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Sunday, December 9

November 2012 Review

Portfolio Update
There were a couple of changes to the portfolio during the month: 
- The position in Treasuries (TLT) was closed during the month.  The position has been the largest contributor by a substantial distance since the launch of the portfolio, but with 30-yr yields near 2.75% the near-term seems to pose greater risk than potential reward. 
- The portfolio’s position in Gold (GLD) was increased during the month.  While, Our Man is somewhat skeptical over any substantial and permanent long-term Gold price appreciation, the position offers some short-medium term opportunity based on favourable technicals and as a hedge against political & central bank stupidity. 
- As mentioned in an earlier post this month, the NCAV book was increased through the addition of some new positions that met the book’s criteria.

Performance Review 
November proved a relatively quiet month for the portfolio, which fell 13bps to leave the YTD performance at -1.6%. 

The month saw most of the books post small losses, which were partially offset by some larger gains.  The Puts/Hedges book (-3bps) and China thesis (-3bps) books posted small losses as the time decay continued to reduce the remaining value of the puts.  The Currencies (-5bps) book also posted a small loss during the month, with speculation continuing on future of the Euro and the path that the countries will take.  The Value Equities (-2bps) and Energy Efficiency (-10bps) books posted small losses as there was little in the individual company reports to substantially driver performance.  Gold (-11bps) was also a negative contributor during the month.

These losses were largely offset by performance from the Treasury book (+10bps), and also from the NCAV book (+12bps) where both the existing and new names helped performance.  The Bond Funds (-0bps) had no impact on performance.

Portfolio (as at 11/30 - all delta and leverage adjusted, as appropriate)  
19.6% - Bond/Absolute Return Funds (DLTNX and HSTRX)
13.1% - Precious Metals (GLD)
6.0% - Value Idea Equities (THRX, and DRWI)
2.4% - Energy Efficiency (AXPW, and XIDE)
1.7% - NCAV Equities
0.0% - Other Equities (none)

-0.0% - China-Related Thesis (3bps premium in EWZ Jan-13 puts)
-0.0% - Hedges/Put Options (less than 1bps each in IWM Jan-13 puts, SPY Jan-13puts, XLY Jan-13 puts)

-11.8% - Currencies (EUO – Short Euro)

51.3% - Cash 

Disclaimer:  For added clarity, Our Man is invested in all of the securities mentioned (DLTNX, HSTRX, GLD, THRX, DRWI, AXPW, XIDE, , EWZ puts, IWM puts, SPY puts, XLY puts, and EUO).  He also holds some cash.  You should not buy any of these securities because Our Man has mentioned them, but should do your own work and decide what’s best for you.