- Technical Book: As discussed in the recent portfolio update, the technical book. All 3 of the indices (S&P 500, Dow and Nasdaq) have had long-held buy signals (since late-2011) and though they’re all close to final legs for this bull-run, it was decided that positions would be taken. Since Mr. Market appreciates irony, initial sell-signals came later in the month for both the S&P 500 and the Dow. While this would normally have resulted in Our Man cutting back the positions to their cost basis, it was unnecessary in this instance as the positions were at their cost basis.
- NCAV: The position in Radioshack was exited, as it had been in the portfolio for a year since it last met the criteria for the NCAV book.
Performance Review
January was a positive month for the portfolio, which posted a marginal (+22bps) gain despite markets falling and a large move away from risk.
Given the sharp fall in the markets, it wasn’t surprising that the largest positive contributor was the Puts/Hedges book (+91bps) which benefited from the exceptionally week equity performance in Japan and especially Brazil. The Absolute Return Funds (+30bps) book also benefited from the flight to safety, with both Treasuries and Gold helping the performance.
January was a positive month for the portfolio, which posted a marginal (+22bps) gain despite markets falling and a large move away from risk.
Given the sharp fall in the markets, it wasn’t surprising that the largest positive contributor was the Puts/Hedges book (+91bps) which benefited from the exceptionally week equity performance in Japan and especially Brazil. The Absolute Return Funds (+30bps) book also benefited from the flight to safety, with both Treasuries and Gold helping the performance.
The Equity-biased books were largely negative contributors during the month, with the International/Country book (-38bps) suffering from its exposure to both Greece and Spain. With all 3 major US indices (S&P, Dow and Nasdaq) losing money for the month, the Technical (-74bps) book began life as a negative contributor. Things on the stock-specific side were somewhat better; the Equities book contributed (+30bps) despite a falling market, after DRWI showed incremental signs of the much hoped for growth in its wireless deployment and THRX saw some management present and some marginally positive news. The NCAV (-5bps) and Energy Efficiency (+1bps) books are pretty small, and thus had marginal impact.
Despite the fall in the markets, the US Dollar failed to make much headway. The Currencies book (-17bps) was hurt as the detraction from the Yen’s strength outweighed the contribution from the Dollar’s strength against the Euro. The China Thesis book (+3bps) was marginally positive as though the weak news from China saw the A-Shares struggle, it also saw the Australian dollar weaken.
Portfolio (as at 1/31 - all delta and leverage adjusted, as appropriate)
18.4% - Technical (DDM, SSO and QLD)
17.3% - International/Country (GREK, EWP and EWI)
13.6% - Bond/Absolute Return Funds (DLTNX and HSTRX)
7.9% - Equities (THRX, and DRWI)
0.6% - NCAV Equities
0.2% - Energy Efficiency (AXPW, and XIDE)
-8.5% - Hedges/Put Options (premium of 141bps in EWZ Jan-15 puts, and 30bps in EWJ Jan-15 puts)
-13.8% - China-Related Thesis (CROC – Short Australian Dollar, partially offset by CAF – Long Chinese A-Shares)
-49.6% - Currencies (EUO – Short Euro, YCS – Short Japanese Yen)
13.1% - Cash
Disclaimer: For added clarity, Our Man is invested in all of the securities mentioned. He also holds some cash and a few other securities (of negligible value). 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.
No comments:
Post a Comment