|
Sector Model
|
XLI
|
2.71%
|
|
|
Large Portfolio
|
Date
|
Return
|
Days
|
|
BBRY
|
7/16/2012
|
106.62%
|
243
|
|
SEAC
|
9/25/2012
|
44.31%
|
172
|
|
CAJ
|
9/25/2012
|
5.61%
|
172
|
|
CFI
|
10/31/2012
|
42.10%
|
136
|
|
RE
|
11/26/2012
|
23.67%
|
110
|
|
BOKF
|
2/4/2013
|
10.83%
|
40
|
|
SWM
|
2/12/2013
|
7.15%
|
32
|
|
GMCR
|
2/19/2013
|
22.14%
|
25
|
|
OKE
|
2/25/2013
|
-5.15%
|
19
|
|
CASH
|
3/14/2013
|
0.00%
|
2
|
|
S&P
|
Annualized
|
8.64%
|
|
|
Sector Model
|
Annualized
|
26.62%
|
|
|
Large Portfolio
|
Annualized
|
34.98%
|
No rotation for Monday.
The market maintains a long bias, but it continues to weaken
technically. Right now the cash version
of the Mousetrap is 90% long.
That empty 10% is like a nag on my screen, screaming “opportunity
cost!”
Yes, it is an opportunity cost.
But the goal of a model is to end the day with the most money, and not always to be statically
invested. The market is in a feeding
frenzy, and money is beginning to paint a picture.
Of the best long industries we have:
|
ENTTECH
|
|
FURNITUR
|
|
ELECFGN
|
|
BANKMID
|
|
OILGAS
|
|
TOBACCO
|
|
WIRELESS
|
|
REINSUR
|
|
POWER
|
|
AUTO
|
|
GROCERY
|
|
GOLDSILV
|
Of the best short industries we have:
|
OFFICE
|
|
ENTRTAIN
|
|
RETAIL
|
|
CABLETV
|
|
RETAUTO
|
|
BIOTECH
|
|
DIVERSIF
|
|
PIPEMLP
|
Notice that both Retail and Retail Auto are shorts.
More intriguing is that Auto remains a long (notwithstanding
the sale of TTM last week). The theme is
clear from Furniture, Oil & gas, Tobacco, Power, Auto, Grocery, Gold &
Silver mining. Things. Invest in things. Don’t invest in demand from consumers
(retail). Invest in inflation instead.
Yes, yes, I know that the whole “Gold & Inflation” idea
has become out of favor – but that’s how investment opportunities are
made. We appear to be in the latter phases
of a pre-inflationary surge. Breadth in
the broad market should continue to tighten as investors pile into index funds
and large caps. Commodities should pick
up. Bonds should soften. And the market should have an annoying
acceleration that will give pain to the hedges I have in my (unlisted)
discretionary short positions.
I say, “should” a lot in that last paragraph. Truth is, no one KNOWS any of this for
sure. You can’t invest in “should” very
well, can you?
The problem is that the Fed has promised QE infinity, and
has tried to talk it back a bit, without slowing down the money printing. At the same time, end consumers have had their
take home pay cut by a few critical percentage points.
But, but, but, hasn’t the dollar stopped falling? Indeed it has, but the dollar isn’t measured against
commodities. The dollar is measured
against other currencies. If EVERYONE is
printing money, then the dollar could rise AND commodities could rise too.
This kind of absurd environment is what separates theory
from reality. Can we say it
together? Ready?
“Bubble.”
Or rather:
Double, double
toil and trouble
Fire burn, and cauldron bubble.
Fire burn, and cauldron bubble.
My own model should (there’s that word again) have some
trouble navigating this, while mindless momentum chasing should (and again)
take the lead. This is where Buffett
exits stage left, while Sauron, er Soros, comes out of the shadows and
says, “Boo!”
People don’t trust Soros because they don’t understand
him. But he explained himself quite clearly
in an interview a few years back when he said that he chases bubbles.
He’s a bit of a mutant, so he can do that.
I’m not a mutant, so I’ll have to defer to Soros here. All I can do is go for the boring trade.
And my boring trade is about to get REAL boring for a while.
Watch for a weird market.
Although I plan to avoid the excitement, I WILL get some
popcorn and 3D glasses to watch the fun.
No doubt Soros will get richer right now – hopefully not off
of MY money…
Tim
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