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 weekly 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. I cannot short individual equities.
To see historic weekly fund changes click here OR the label at the bottom of this entry entitled 'fund positions'.
Cash: 13.5% (vs 24.2% last week)
54 long bias: 79.2% (vs 56.5% last week)
5 short bias: 7.3% (vs 19.3% last week)
59 positions (vs 59 last week)
Additions: Atwood Oceanics (ATW), Blackrock (BLK)
Removals: Tesoro (TSO), Best Buy (BBY)
Top 10 positions = 26.8% of fund (vs 30.9% last week)
40 of the 59 positions are at least 1% of the fund's overall holdings (68.0%)
Major changes and weekly thoughts
I entered the weak relatively bearish with nearly a quarter of funds in cash and nearly 20% in the Ultrashort positions. Technically the markets looked pretty bad, having broken down below their 200 day moving averages, and potentially heading to test new lows. Monday the market fell quite hard, but in the face of more bad news Tue, Wed, and Thur - the market refused to slip further. The one number I have been watching (really for the past few months) is S&P 500 level = 1440. While we did test if briefly mid week, the market held that level all week. With the inability to breakdown further, along with the good earnings news out of Research in Motion (RIMM) I had a hunch we'd get a rally Friday [Santa Claus Rally?] and it worked out pretty well. However, we are now at the top end of our technical resistance (1485-1490) on the S&P 500.
In a general sense I slowly went from a high Ultrashort exposure (for the fund) at nearly 20% to less than half that as the week wore on, and moved that to long exposure, along with about half the cash. Unfortunately, we are already at technical resistance on the indexes, as we trade in a very tight range overall, where we go right from support to resistance every time we move 3% up or down.
Below are the fund changes this week - the specific rationale for each of these major moves is explained in the weekly posts which can be accessed in the left margin under archives.
Some of the larger changes (chronologically) to the fund below:
- Monday, I closed refiner Tesoro (TSO) after an upgrade from Citigroup; this closed out a losing trade which was based on the price of crude falling (along with a buyout offer from Tracinda). While crude fell, it did not help the refiners rise - and the buyout offer fell through. At this time the only refiner I am keeping is Frontier Oil (FTO).
- I closed Best Buy (BBY) ahead of earnings - the earnings turned out quite good, and after a sell off Tuesday, the stock rebounded later in the week and ended up a bit higher than I sold it. While I still like the stock and the company, retail is not an area I want to be overweight and this was also more of a trade than a typical type of stock I hold in the fund.
- Foreign markets took quite a hit last week post Fed, and through Monday so I did some buying - especially in India, and with my 1 Russian stock Mechel (MTL) which had pulled back after solid earnings, and Brazilian homebuilder Gafisa (GFA). I had mentioned in a post just a week earlier that India had really outperformed v China and I felt the names were getting rich, but these are very volatile names and when they pull back, they pull back hard, so I was able to re-up with a new layer into my positions.
- National Oilwell Varco (NOV) made what looks to be a good acquisition with Grant Prideco (GRP), so with the stock off sharply I increased my position. In general when stocks make acquisitions their stocks sit in a narrow range until the transaction is complete, so it wuld not surprise me to see National Oilwell Varco not make a serious move anytime soon, but the valuation is very good and this is the type of stock that will make a move later in 2008 once the transaction is finalized.
- I restarted a position in one of the 3 deep sea oil drillers I am focused on (and a previous fund holding), Atwood Oceanics (ATW) - in retrospect I wish I had started with a larger stake as the stock took off later in the week.
- Wednesday, despite a gosh awful chart, I added to my position in Hong Kong cement and infrastructure name KHD Humbolt Wedag (KHD). This is more of a "value" pick, but unfortunately, without price momentum, value stocks can remain "under valued" for a long time.
- After reporting decent results Wednesday night, LDK Solar (LDK) began a sharp descent, so I added Thursday and Friday. I had a very small position ahead of earnings (smallest position in the fund), and started averaging down Thursday with hopes of getting a price of $46-$47, which was achieved amazingly late Thursday and into Friday. This took LDK Solar from the fund's smallest position to it's largest overnight - at under 5% of the fund. If we continue to degrade down to $40, I will push the position up to 6% or so.
- Early Friday, as I got bullish on the prospects of a Santa Claus rally, I restarted a new position in financial asset manager Blackrock (BLK) (again a former fund holding), and added to a potpourri of names ranging from Mastercard (MA), iShares Malaysia (EWM), consulting play FTI Consulting (FCN), infrastructure stock Chicago Bridge & Iron (CBI), and coal stock Peabody Energy (BTU).
