This quarterly update will be quick and easy since I’ve got some cool stuff I’m working on for 2Q12.
Recap & Outlook
1> Europe still has a mess on its hands. The focus is on Spain. Either this European Monetary Union splits up or the currency won’t hold. Short Euro, long gold looks like an interesting idea. Also, keep an eye on the French election and its aftermath.
2> US equities still looking a bit overvalued. The 10yr is probably stuck near 2% for the next few quarters.
3> Bank stocks scare me.
My performance suffered primarily since the E-mini S&P 500 short performed poorly in the final days of the quarter. The portfolio is quite exposed to the leverage; this is something that will work itself out over subsequent quarters. No worries here.
I’m doing away with the asset allocation pie graphs and moving toward a risk factor model. Here are my risk exposures as a net percentage of the portfolio.
*most of the equity exposure is short