When you pick up an annual report from a typical mutual fund, you’ll read something that says “we capitalized on opportunities, however there’s no guarantee this same success will reoccur.” Or, it will read something along the lines of “although performance was below expectations, we are well-positioned for the next several quarters.” Irrespective, the reader comes away with confidence in the fund manager without regard for past or future performance. So I’m going to give it to you straight.
I lost six thousand dollars.
Clearly this is not something to hang one’s hat on, but allow me slice this a different way…
I outperformed the market by a ratio of about 6.5 to 5.
These divergent claims are both statements of truth. The goal here is to display results (good and bad) as sincerely as I can…
The ReasonablyThinking portfolio consists of all new equity transactions initiated since 1/1/09; as shown below, this resulted in a loss of about $6k. In addition, I have been tracking personal total performance since 1/1/07. This includes all RT transactions as well as investments in mutual funds, coins, and legacy equity transactions (these are included in my portfolio allocation). Clearly, the two above statements are not apples-to-apples. Yet, the differences in how results are composed shines light on their results. Some stocks that appear only in the RT portfolio (as losses) are used to hedge positions that may not be in the RT portfolio (like coins, which have appreciated substantially). Furthermore, the time periods are of differing lengths, which further adds to the discrepancy. Keep in mind that although my last two years have been down, I am still up over the past fours. Meanwhile, the market is still down from where it was four years prior, despite a monstrous run-up over the past two years.
In preparing for this quarter’s article, I read the commentary from 4Q10 and I feel like I could have written the same thing again. My current day reasonably thinking attitude remains steadfast:
- My stock hedges have resulted in losses (as described above).
- The economy has no footing; debt financed government spending pushes it.
- Valuations remain high
- I am worried about the US dollar (both fiscal and monetary policies hinder it).
I am still sticking with these theses not because I am anchored or stubborn, but because I have no stronger arguments that overrule the body of work present on this site. Finally, last quarter I tried to tip my hand, and I followed through on purchasing grains (wheat) and went long staples/short industrials (cyclicals). This quarter, I still have my eye on floating rate notes and utilities as well as new opportunities.
Asset Allocation: funds shifted from US Stocks to cash and commodities. The reasoning behind this is a preference to exit overvalued stocks and capitalize on the commodities upswing that QE2 caused.
Stock trades: stock transactions were down again this quarter and were partially mitigated by coin appreciation (not shown).
|RT Public||1Q11||$ (6,014.68)|
|Previous RT positions||50||ALK||$ 143.49|
|6||ITB 17.50 Jul10P||$ 1,043.92|
|2||ITB 20 Oct10P||$ 420.97|
|2||SSO 44 Jun10P||$ 420.96|
|12||FRE 1 Jul10P||$ 501.77|
|1||FAS 32 Aug10P||$ 210.06|
|1||VXX 18 Oct10P||$ (259.93)|
|7||ITB 17.5 Jan10P||$ (1,570.82)|
|-4||SSO 43Mar11C||$ 2,264.45|
|4||SSO 50Mar11C||$ (759.52)|
|Current RT positions||3||ITB 15 Apr11P||$ (400.75)|
|1||SPF 9 Sep11P||$ 105.03|