|50% GAINS PORTFOLIO – MARCH 3|
TECH – 2%
NON-TECH – 45%
CASH – 53%
BONDS - 0%
OPTIONS – 0%
LARGE CAP U.S. STOCKS – 0%
SMALL/MIDCAP U.S. STOCKS – 23.5%
INTERNATIONAL STOCKS – 23.5%
IN: SD (10), NM (5), SWSH (5), FXEN (6.11), EPAM (13.83), GWAY (14.4), RPXC (20.16), CETV (7.5)
OUT: SSN, PER
REDUCED POSITION: PVDRF
ADDED MORE: None
TOP TEN: TOP TEN: MHR, LNZNF, DRH, GBTZF, GUKYF, EPAM, GWAY, NATDF, LQDT, SBSNF. **Percentage of total portfolio: 27%. Top five holdings: 20.5%. Total portfolio: 31 companies (stocks, options, bonds, funds and shorts).
CURRENT SHORTS, SHORT ETFS AND PUTS: None
LOSS REPORT: This month: 14 stocks/0 options in the red - losses equal 4.7% of the portfolio, market value 11% of the portfolio (This month: 15 stocks/3 options in the red - losses equal 4% of the portfolio, market value 10.5% of the portfolio)
SECTORS: Energy 25.5%, Transportation 5%, Retail 4.5%, Finance 3%, Mining 1.5%, Software 1.5%, Healthcare 1.5, Infrastructure 1.5%, Internet 1%, Real Estate 1%, Hardware 0.5%, Europe 0.5%, Broadcasting 0.5%, Cash 53%.
CATEGORY - STOCK (COST BASIS updated periodically to reflect averaging into positions)
ENERGY – CAAEF (.66), CENJF (15.75), CLLZF (1.05), EPM (5), FXEN (6.11), GUKYF (3.49), MHR (.49), NATDF (1.91), PVDRF (4.7), RCKHF (4.82), SD (10), SDRL (21.2), SLGYF (.58), SSN (1.39)
TRANSPORTATION - DRH (7.98), GBTZF (1.48), KNCRF (42.2), NM (5)
RETAIL - LNZNF (132), LQDT (20.36). PRMW (5.1)
FINANCE - SAXPF (30.5)
MINING/MATERIALS - AMHPF (4.75)
SOFTWARE – EPAM (13.83)
HEALTHCARE – GWAY (14.4)
INFRASTRUCTURE - RPXC (20.16), SWSH (5)
INTERNET - SBSNF (27.3)
REAL ESTATE - HFF (13.99)
HARDWARE – PSDMF (2.54)
EUROPE - WNDLF (87)
BROADCASTING – CETV (7.5)
INTERNATIONAL STOCK LIST (19 stocks): AMHPF, CAAEF, CENJF, CETV, CLLZF, FXEN, GBTZF, GUKYF, KNCRF, LNZNF, NATDF, PVDRF, PSDMF, RCKHF, SAXPF, SBSNF, SDRL, SLGYF, WNDLF.
Africa/ME - GUKYF
Asia - CENJF, GBTZF
Europe - CETV, FXEN, KNCRF, LNZNF, NATDF, PVDRF, PSDMF, SAXPF, SBSNF, SLGYF, WNDLF
Latin America - AMHPF, CAAEF, RCKHF
Bermuda – SDRL
Canada - CLLZF
**Monthly update on YTD performance February 28, 2012: +9% YTD.
Dow +6% YTD, SP500 +8.5% YTD, NASDAQ +14% YTD.
**Last 12 Months: Portfolio -14%, SP500 +3%.
FEBRUARY 2012 MARKET COMMENTARY
The markets remained strangely quiet, tacking another 3-4% without the sudden spikes or volatile swings that marked the market mood in the second half of 2011. Volume continues to be light, leading some analysts to wonder if there isn’t a quiet “distribution” pattern underway, with longs clinging to a shrinking number of market leaders and broader selling in less-known names. The fact is, there is more guesswork than firm answers, just like last month.
Top recession-predicting firm ECRI stands by its declaration that the US economy is headed back to recession despite steady progress in most economic indicators. I won’t believe it until key measures like employment and the ISM numbers actually head south. In fact, the weekly measure of new US unemployment claims is coming in at multiyear lows, a very positive signal for the overall economy.
The early 2012 US earnings season is largely done now, with no major worries or problems emerging to torpedo overall market confidence. Our top holding, MHR, reported solid progress on most fronts, with the exception of the weak natural gas price causing them to re-orient most of their capex in 2012 to oil and NG liquids development. Overall, their target production rate for late 2012 has already risen from 12K barrels per day to 16K, and could go higher still with more success at the drill bit.
I am still unconvinced that I should abandon my overly cautious market stance since mid-2012. While the US isn’t looking bad and the Europeans seem to be plugging the holes in their leaky dikes, we are hardly back in boom times either. The latest US GDP revision to a 3% growth rate in Q4 2011 was encouraging but not a barn-burner.
Now that earnings reports have given us a clearer picture where many companies stand, easing back into individual stories still strikes me as the most prudent path. The March-May period is often treacherous in the markets, and I doubt this year will be an exception.