Bookkeeping: 'Rising Tide' Performance Year 1

Weekly data

Despite a massive amount of volatility this week, the indexes didn't end up far from where they started. Both the S&P 500 and Russell 1000 gained 0.2% this week. Rising Tide Growth, despite a defensive posture, high cash/short exposure - continued to milk off money as just about all long positions continued to take losses, and finished with a 0.9% loss.

Week 52 / 1 year data

For the year we put in a 10% gain, which is very good overall considering the atmosphere and comparables but we were much happier in June when we were over 20% gain for the year. The market finally dragged us back after we managed to avoid it much of the year.

Quite a few people have emailed me over the year about my "goal" about beating the S&P 500 by 15% a year. Now, I have to say no mutual fund is going to be doing that over the "very long run" (i.e. 10 years) and many of the best fund managers would be thrilled to beat their indexes by 3-5% a year over the long run, knowing some years they will trail the index and some years surpass it. But if you have high goals, even if you fail hopefully you will still surpass the pack and hence why I state that as a goal. We were to surpass that goal this year, even with the falloff at the end of the year.

Further, as of June 30th we would of been ranked as the #1 fund in our category of mid cap growth funds. In about 3 weeks I'll update this entry with how we ended the year - #1 overall might be at jeopardy after a July such as this, but a top 10 finish will be assured. Out of 1800 funds in our group, that's another accomplishment to enjoy.

Overall this has been a very tough year to make money - the toughest since that 2000-2002 period. I don't expect roses and victory parades in the next 12 months either, but we'll continue to pick our spots, try to outperform the weeks or months when the market spirits act rational, and try to protect capital otherwise. At some point in the next year I expect a lot of "hope" to be wrenched out of the market and apathy to take over - that's what marked the bottom in end 2002/beginning 2003. Unfortunately we still have the serial bottom callers out there so until they quiet down I don't believe a real bottom will be in place - I still think rough sledding for 12-15 months more. We would be correcting much quicker in these otherwise efficient markets, if not for the constant interventions by the powers that be, but they won't allow us to rip the band aid off quickly so this will be a much more drawn out (in terms of time) correction in my book.

The NAV of $11.01 below, as well as the closing prices for the S&P 500 and Russell 1000 will be our start points for year 2 comparisons.

Price of Rising Tide Growth: $11.011
Lifetime Performance to date (vs Aug 3, 2007): +10.11%

Comparable S&P 500: 1260.3 (-13.98%)
Comparable Russell 1000: 690.3 (-13.30%)

Fund return vs S&P 500: +24.1%
Fund return vs Russell 1000: +23.4%

Last week's results here.

Since the market cap of the median stock in the Rising Tide Growth fund (median $7.1 Billion as of April 08) 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 July 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