Bookkeeping: 'Rising Tide' Performance Week 15

Week 15 performance of the mutual fund

Comments: After a rough Friday last week, this week started off to a gosh awful start. After hanging out in the 2 sectors that had essentially ignored the sell off (agriculture and infrastructure) those sectors were hammered Monday, while the market sold off in general - but since the indexes are full of stocks that had been 'washed out' by the previous week and a half of pain, the fund truly underperformed on its worst day (or at least worst since mid August?). It was bad. Tuesday the market bounded up with a massive move, and the fund was able to recapture about 80-85% of losses; but the rest of the week was at best flat at its best moments and painful at its worst. Thursday was a standout for a return raid to the favored groups. I did lighten up on some long positions midday Wednesday after large rallies, but short of completely going to cash or closing long term positions there was no way to avoid the pain with the sectors I have been holding.

The S&P 500 and Russell 1000 were amazingly up this week; the former up 0.3% and the latter up 0.2% - recession proof conservative plays held up better this week, along with a lot of rebounding in very oversold financials. Rising Tide Growth Fund had its worst week versus the indexes since mid August with a 1.41% loss. Actually compared to how bad Monday was, that's not a performance I am bemoaning. So the fund under performed the S&P500 by 1.7%, and Russell 1000 by 1.6%. Hey, we are not used to that around here. As I mentioned this week many names in the S&P 1500 are down 20-25% from peak to current levels whereas the indexes are down closer to 8%. Hence the inability to short individual names is a drag in times like this.

In terms of the portfolio, I was 1 day off in trimming my Ultrashort positions (sold heavily last Friday) instead of waiting 1 more day - but I am not a market timer, so being off by 1 day is a victory. That said, nothing would of helped Monday because the indexes and areas I have been short against (financials, real estate) actually were up Monday (meaning the Ultrashorts were down), so it would of added insult to injury to see a large exposure to Ultrashorts go down on such a lousy day. Many of the fertilizer and infrastructure names were down 10-15%; and just no way to come back from that too easily in a week. If I were more actively trading, I would be selling much more heavily into rallies such as Tuesday/Wednesday but I'm trying to think more like a 'fund' guy. Needless to say, the rest of the week was damage control and catch up, and anytime the market had a breather the positions in the fund, in general did well. But those market breathers have been in short supply. I will say I have positioned the fund into names I was hoping to get into, but the charts were very overextended, or valuations were extreme - so this pullback has created nice entry points on just about every name I want to be in for the coming months. I continue to expect these names to outperform to the upside once the market stabilizes. Overall the fund is right back to where it was in week 12 (3 weeks ago), in beating the indexes by nearly 13%. Considering the damage of late, that's not bad.

Price of Rising Tide Growth: $11.239
Lifetime Performance to date (vs Aug 3, 2007): +12.39%

Comparable S&P 500: 1,458.7 (-0.44%)
Comparable Russell 1000: 794.3 (-0.24%)

Fund return vs S&P 500: +12.83%
Fund return vs Russell 1000: +12.63%

Last week's results here.

Since the market cap of the median stock in the Rising Tide Growth fund (median $9.8 Billion as of November 07) is significantly below the SP500 index (median $13.1 Billion as of September 07) but higher than the median market cap in the Russell 1000 (median market cap $5.8 Billion as of September 07), I am measuring the fund against both indexes. Click here to see all fund's holdings as of mid November 2007.

Basis for indexes is 5 day weighted average of closing prices Aug 3-9
SP500 : 1,465.2
Russell 1000 : 796.2

To see why I use the 5 day weighted average of the first 5 trading days to smooth out the volatility of the indexes as the fund launched, see here.

Please click here: fund performance for previous updates