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)
-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.