Bookkeeping: 'Rising Tide' Performance Week 20

Week 20 performance of the mutual fund

Comments: Another interesting week - quite bad Monday, quite good Friday, and quite quiet in the middle. As outlined this morning [Santa Claus Rally?] the news flow this week was actually quite poor in the economic (i.e. real) world, but on Wall Street it's only as bad as your last Fed infusion of capital (or ECB infusion of a half a trillion dollars). Needless to say, despite the drumbeat of bad news, it essentially fell on deaf ears. Remember, as "they" say, when good news is treated badly, get bearish and when bad news is treated well or with indifference, get bullish. So this is why (at least temporarily) after seeing the markets only down half a percent all week despite all the wickedness thrown the market's way, I went back to somewhat bullish mode. There is nothing insightful to really add here - using the S&P 500 as our gauge we are right back to a key level; the 50 day moving average (1485, dropped down from 1490 of late). You can either view it as the markets knowing more than the economic numbers, or the market ignoring the economic numbers. Either way it does not matter from an investing standpoint - it is what it is. No reason to stand in front of a herd of bulls...

For the fund, I entered the week relatively bearish (and the spike down Monday confirmed this to be a good view), and spent most of the week in a heavy cash position [around 25%] waiting for the market to make a decision of which way to go. We tested that ever elusive S&P 1440 level mid week, which regular readers will know is the magical marker which draws the markets like a magnet. And then we didn't break through despite the bad news, so one would assume that to be bullish near term. In a mixed up market like this where fundamentals seem to be disassociated from the news flow, it is better to rely on technicals and just let the price action dictate your actions. Which I do. Fertilizer positions really came to the forefront Thursday (unfortunately I am at my lowest allocation in months at only 6% of fund allocated to this sector), and then Friday we had a nice rally in many names.

So despite a heavy cash position (nearly 25%) and only about 75% of my money actually 'working for me' in the market (either long or otherwise) for most of the week (until Friday), Rising Tide Growth Fund generated a +2.20% return. This compares to +1.1% for the S&P 500 and +1.2% for the Russell 1000. If not for a late week foray into LDK Solar (LDK) which knocked off about 0.4% of performance it would of been even better, but some future week the fund will derive a nice benefit from the position just built in this name.

Only 6 weeks more until "my" 2nd quarter is in the books; so far so good.

Price of Rising Tide Growth: $12.264
Lifetime Performance to date (vs Aug 3, 2007): +22.64%

Comparable S&P 500: 1,484.5 (+1.31%)
Comparable Russell 1000: 808.9 (+1.59%)

Fund return vs S&P 500: +21.33%
Fund return vs Russell 1000: +21.05%

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