Bookkeeping: 'Rising Tide' Performance Week 31

Week 31 performance of the mutual fund

Comments: It was another wild and wooly (sp?) week in the market. As we've been discussing the market has been range bound, and my prediction was when we did break out of this range it would be downward, which did happen this week - twice. But for the 3rd week in a row I got Gasparinoed


Gasparinoed /verb/ - to be positioned perfectly anticipating a market selloff due to technical conditions, only to be blindsided by a TV pundit passing "well founded facts" to millions of viewers which ultimately do not come true, and immediately destroying all your short positions to the tune of 5-8% across the board.


Not only did I take a hit 2 weeks ago Friday when the market was about to break down, and Charlie came to the rescue @ 3:30 PM, driving the market up 1.8% in 30 minutes, but he did last week and again this week Tuesday; just as the market broke technical resistance (S&P 1320) that I've been waiting a month to happen. So once again my positions turned against me, and I lost money, but this time at least the effects were short lived. But it still lost some performance.


Of greater note, the saga of Thornburg Mortgage (TMA) killed performance this week, subtracting roughly 3% (when combined with the smaller loss in MFA Mortgage) from fund performance. So first I was Gasparinoed and then I was Thornburged. Thankfully, I did not get Croxed, or I might not even of made it to the keyboard by the end of the week. Either way I felt I was allocated quite smartly if not for the CNBC pundit interference, for the rest of the week. As for being Thornburged - well it is going to happen at some point - but you never expect 90% drop in a week. At this point I am considering that position a lottery ticket as it is so close to $0 as it is, and hopefully some soul will see it worth a buyout - I mean even Countrywide, with a far poorer book, could find a greater fool to buy it out.

With that said, I am going to ask the government for a bailout on my Thornburg Mortgage position; I mean everyone's doing it nowadays so why not me? What's that? I'm not a multi billion bank who showers its CEO with multi millions of compensation to drive the stock into the ground - therefore I don't deserve the entire government riding to my resuce? Ok, I see how it is.


So from a big picture view of the market, we have been broken down but we seem to be moving toward a direct Fed bailout into the mortgage business which raises the risk of short exposure exploding in our face at any moment. The drumbeat grows louder by the hour. S&P 500 level 1270 remains a key level, and we'll watch how the market reacts when we get there. Friday, however financials and peers did seem to outperform by a large degree so these stocks could potentially be washed out for now. There are so many cross currents happening in this group it is hard to know what to expect - without the threat of government interventions the ultimate direction would be very easy to model; but right now anything can happen.


Anyhow, if you exclude this "mortgage related stock" 3% drag the fund did very well this week - but unlike our financial institutions I cannot hide this loss in off balance sheet accounting so I'm stuck with it. Rising Tide Growth Fund lost 3.15% this week, trailing the indexes we track by approximately 0.3% - the S&P 500 was down 2.8% this week and the Russell 1000 was down 2.9% this week.

Price of Rising Tide Growth: $10.984
Lifetime Performance to date (vs Aug 3, 2007): +9.84%

Comparable S&P 500: 1,293.37 (-11.73%)
Comparable Russell 1000: 705.37 (-11.41%)

Fund return vs S&P 500: +21.57%
Fund return vs Russell 1000: +21.25%

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 January 2008.

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