The saying, “Sell in May and go away” rang true this quarter as the market peaked for the quarter at the end of April and proceeded to drop through mid-June. The final tally was the S&P 500 falling a trivial five points. Meanwhile, as the market fell, I was able to pare some of my own losses from the first quarter (see appendix below). Meanwhile the metals market continued its ascent with gold climbing 5.3% in the quarter; the Coin portion of my asset allocation also participated in this rally. As I mentioned last quarter, some of the stocks that I own are down, yet they are hedged with coins. For example, I shorted FXE (the Euro), which has appreciated 10.5% since November; meanwhile, I own coins that have appreciated in a similar manner. The net effect is not as painful as it appears because my real returns are still productive.
Reasonably thinking, my main thoughts for the upcoming months/quarters are:
- Confidence and the economy remains subdued by government encumbrance and housing overcapacity
- Europe, particularly the Euro, continues to tremble
- The continued gradual devaluation of the US dollar and the US’s fiscal obligations
As I suggested last quarter, I purchased floating rate notes, and I was pleased to see a recent PIMCO article agreeing with me. Going forward, I am considering gold stocks and dividend payers while keeping an eye open for exiting profitable trades.
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APPENDIX
| End 2Q11 | Goal | 2Q10 | 3Q10 | 4Q10 | 1Q11 | 2Q11 |
| Currencies | 10% | 10-15% | 10-15% | 15-20% | 25-30% | 30-35% |
| US Stocks | 20% | 15-20% | 15-20% | 15-20% | 10-15% | 10-15% |
| Int’l Stocks | 25% | 15-20% | 20-25% | 15-20% | 15-20% | 10-15% |
| Bonds | 5% | 10-15% | 5-10% | 5-10% | 5-10% | 5-10% |
| Shorts | 20% | 20-25% | 20-25% | 20-25% | 20-25% | 15-20% |
| Commodities | 10% | 0-5% | 0-5% | 0-5% | 5-10% | 5-10% |
| Coins | 10% | 5-10% | 5-10% | 5-10% | 5-10% | 10-15% |
| RT Public | 2Q11 | $ (5,685.24) | |
| Shares | Ticker | Delta | |
| Previous RT positions | 50 | ALK | $ 143.49 |
| -200 | BKCC | $ 915.99 | |
| 60 | HAL | $ 449.76 | |
| 300 | ADX | $ 870.93 | |
| -40 | CYN | $ 110.35 | |
| -50 | CYN | $ (437.89) | |
| 30 | JJC | $ 42.97 | |
| 50 | USL | $ 90.96 | |
| 6 | ITB 17.50 Jul10P | $ 1,043.92 | |
| 2 | ITB 20 Oct10P | $ 420.97 | |
| 1 | .sdsuh | $ (1,017.99) | |
| -3 | SDS33Sep10P | $ 478.50 | |
| 3 | SDS26Sep10P | $ (229.51) | |
| -4 | SDS36Jan11P | $ (1,747.08) | |
| 4 | SDS28Jan11P | $ 664.94 | |
| 100 | SDS | $ (1,481.93) | |
| 2 | SSO 44 Jun10P | $ 420.96 | |
| -50 | SSO | $ 164.43 | |
| 12 | FRE 1 Jul10P | $ 501.77 | |
| 1 | FAS 32 Aug10P | $ 210.06 | |
| 50 | DBV | $ 10.98 | |
| 1 | VXX 18 Oct10P | $ (259.93) | |
| 10 | VXZ | $ (179.72) | |
| 20 | FXF | $ 61.76 | |
| 7 | ITB 17.5 Jan10P | $ (1,570.82) | |
| 1 | SSO46Jan11P | $ (938.25) | |
| -4 | SSO 43Mar11C | $ 2,264.45 | |
| 4 | SSO 50Mar11C | $ (759.52) | |
| 400 | SSO | $ (3,164.23) | |
| 15 | FXA | $ 55.18 | |
| 3 | ITB 15 Apr11P | $ (385.74) | |
| 25 | IXJ | $ 72.21 | |
| 1 | SPF 9 Sep11P | $ 150.01 | |
| $ (3,028.02) | |||
| Current RT positions | 10 | GLD | $ 575.30 |
| 100 | SDS | $ (1,737.00) | |
| 100 | DBC | $ 613.00 | |
| -1 | DBC32JulC | $ 86.74 | |
| 30 | EXC | $ (14.20) | |
| -60 | SSO | $ (497.07) | |
| 100 | VXX | $ (1,851.98) | |
| -25 | UYG | $ (143.77) | |
| -100 | PHH | $ 81.01 | |
| -20 | FXE | $ (274.02) | |
| 50 | CYB | $ 4.50 | |
| 30 | JJG | $ (181.75) | |
| 1 | NVR | $ (60.52) | |
| 75 | KBH | $ 318.58 | |
| 50 | RYL | $ 40.03 | |
| 65 | MHO | $ 174.63 | |
| 65 | XLP | $ 114.61 | |
| 55 | XLI | $ 43.87 | |
| -100 | ITB | $ 38.02 | |
| 165 | JFR | $ 12.80 | |
| $ (2,657.22) |
