Bookkeeping: Weekly Changes in Fund Positions

Week 8 Major Position Changes

Fund positions of 1.0% or greater can be found each week in the right margin of the blog, under the label cloud and recent comments areas; I highlight each week the larger position changes.

Being a long only fund, via Marketocracy rules, the only hedges to the downside I have are cash or buying short ETFs.

To see historic weekly fund changes click here OR the label at the bottom of this entry entitled 'fund positions'.

Cash: 14.3% (vs 19.4% last week)
57 positions (vs 58 last week) - Completed exited Garmin (GRMN), F5 Networks (FFIV) and LDK Solar (LDK), initiated Cummins (CMI) and Under Armour (UA)
54 long bias: 73.2% (vs 69.6% last week)
3 short bias: 12.5% (vs 11.0% last week)

Top 10 positions (excluding cash) = 36.2% of fund (vs 31.1% last week)
36 of the 57 positions are at least 1% of the fund's overall holdings

Major changes and weekly thoughts
A quiet week overall, although technically the charts of the major indexes improved. Economics fundamentals continue to call for caution yet the market seemingly is ignoring the news (or it's all 'priced in'). Some of the momentum leaders started slowing down at the end of the week, meaning either they are topping out or resting before the next push up. Small speculative stocks in both China and solar had huge moves this week. I did cut the fund cash position by 5% this week, putting some into more index short positions and into quality stocks that had pulled back. I still remain very wary with earnings season in October as holding such a large portfolio of names means 'something' will blow up (i.e. a great earnings report but "not good enough to meet expectations" can hurt your portfolio very quickly). Just the lemming behavior of Wall Street. If the market breaks down I won't hesitate to change back to a more bearish view but right now bad news is seen as good news (bad news = more Fed cuts) and that's all the market seems to care about now.

Some of the larger changes to the fund below:

1. I initiated a position in Cummins (CMI), based on my expose last week on the name and continued to add to this position as it pulled back throughout the week. It is a 1.3% position in the fund.
2. Closed my smallish position in LDK Solar (LDK), on the huge run by solar stocks.
   
3. Cut back my position in laggards Sandisk (SNDK) and Perini (PCR) for technical reasons - of course Sandisk (SNDK) promptly reversed and made my decision look foolish.
   
4. I continued building my coal positions in Consol Energy (CNX) and Peabody Energy (BTU) on low volume pullbacks this week.
5. I sold completely out of my Garmin (GRMN) position and initiated a relatively small position in Under Armour (UA) on it's pullback after an analyst downgrade; making it a 0.70% position in the fund. I'd like to see more of a pullback in Under Armour to add more (or a jump back above its technical resistance points). I'd like to re-enter Garmin at a lower valuation down the road. Under Armour closed below its 50 day moving average for 3 days in a row so that is generally not a bullish sign. Hence my caution.
   
6. I added to my UltraShort Russell 2000 (TWM) during the latter part of the week.
7. I completely exited the position in F5 Networks (FFIV) - I like the networking space but am more confident in other names such as Ciena (CIEN) and Blue Coat Networks (BCSI) so increased those positions instead. The latter 2 names are now the top 2 long positions in the fund.
   
8. I cut back (a bit) on some of the names in the fund with strong runs the past 5-7 days, Apple (AAPL), Crocs (CROX), and Suntech Power (STP) - still very bullish on all these, but they have made some very big runs in a short amount of time so I want to bank some profits and redeploy cash into other names I like that have pulled back.
9. I added some Pride International (PDE) this week as the chart improved suddenly in the back half of the week. Pride is an oil driller which is focusing more on deep sea drilling (and a potential take over candidate) - and is the fund's 4th largest long position.
   
10. I added to the fund's position in NII Holdings (NIHD) taking it from 1.3% to 2.05% of the fund's holdings as the technical picture finally improved.
11. I started building back the fund's position in Western Refining (WNR) as the stock has fallen down to its 200 day moving average. This is a bit of 'catching a falling knife' so I am not totally committed yet as the stock could certainly fall further but it's down 25% in a month.

Once again, some reasons for caution in the weeks ahead. First October... well it's October - 1987 crash, 1997 major turmoil, 2007 ? . Second, any earnings period is a mixed bag - on one hand I love seeing updates to business, but on the other I dread seeing people's very short sighted reactions to long term businesses (i.e. people react violently on 90 days worth of data - a company could grow 65% year over year which is wonderful, but if expectation were 67% than the stock can drop 20%). Third, we get another employment report - my guess here is September's low number will get revised up but October will be somewhat weak. How the market reacts - who knows. Fourth, we've had a huge run (including some super speculation) and some of the leaders seem to be stalling a bit late this week. Once again it is too early to tell if they are truly stalling or just creating a base for the next move up. Ironically some of the weakest areas such as retail and homebuilders are showing signs of being washed out and potentially good for at least a very near term trade (up) as most of the bad news seems 'priced in' (for now). So many cross currents and I remain flexible as always on the roadmap ahead.