Bookkeeping: 'Rising Tide' Performance Year 2, Week 12

Year 2, Week 12 performance of the mutual fund

Comments: Completely at a loss this week as we continue an avalanche of selling pressure; effectively the margin call of a lifetime. Despite sitting 1/3rd in cash we managed to lose a lot more than the market and stock after stock was dismembered, far more than the markets. Thursday, half the stock we owned lost from 7-18% - and the market was actually up that day. Friday we were hammered again. I'm at a complete loss as nothing works on the long side - not good earnings, not stock buybacks - not anything. Buying anything just creates a loss and all facets of fundamental investing have become useless. I can't add anything to that. In other similar eras companies would start buying each other out, but you need credit markets in most cases for anything of scale and with that effectively shut off it seems like there are no buyers for the market except daytraders who are in and out in a few hours. Investors seem to be nowhere to be found. As I said this week, even in 2000-2002 after you had these traumatic losses you'd get spike back bounces that lasted weeks, or even months. Now we have a day and a half at most. It is unrelenting.

For the fund, effectively every position lost - many huge. Individual stocks we held did far worse than the indexes, as a lot of pain seemed to hit healthcare, and solar stocks are pricing in no access to capital for customers or the companies themselves it appears. Everything else, just sold off - no matter if they reported good earnings or any other positive news was to be found. A complete buyers strike is all I can guess at. There is no value that matters since the sellers are being forced out of positions lower and lower in price.

The S&P 500 lost 6.8% and the Russell 1000 lost 7.1%. Despite 1/3rd in cash Rising Tide Growth lost 14.1%. I am boggled by the performance this week versus the indexes, considering only 2/3rds of the portfolio was even exposed to the market. So after running ahead of the market for a few weeks in year 2, we are now back essentially in line with the indexes after this week's disaster.

*** Year 1 Results here: +10.1% vs -14.0% S&P (+24.1%)

Year 2 Metrics

Price of Rising Tide Growth: $7.551
Year 2 Performance to date (vs Aug 1, 2008): -31.42%

Comparable S&P 500: 876.8 (-31.43%)
Comparable Russell 1000: 471.5 (-31.69%)

Fund return vs S&P 500: +0.0%
Fund return vs Russell 1000: +0.2%

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 for year 2 is closing price August 1st, 2008.
SP500 : 1,260.3
Russell 1000 : 690.3

Please click here: fund performance for previous updates