|
Sector Model
|
XLB
|
-0.42%
|
|
|
Large Portfolio
|
Date
|
Return
|
Days
|
|
BBRY
|
7/16/2012
|
102.76%
|
265
|
|
SEAC
|
9/25/2012
|
38.07%
|
194
|
|
CAJ
|
9/25/2012
|
0.76%
|
194
|
|
RE
|
11/26/2012
|
21.32%
|
132
|
|
BOKF
|
2/4/2013
|
10.38%
|
62
|
|
SWM
|
2/12/2013
|
7.06%
|
54
|
|
GMCR
|
2/19/2013
|
19.91%
|
47
|
|
OKE
|
2/25/2013
|
0.67%
|
41
|
|
TAC
|
3/25/2013
|
-2.06%
|
13
|
|
TTM
|
4/1/2013
|
-3.24%
|
6
|
|
S&P
|
Annualized
|
8.07%
|
|
|
Sector Model
|
Annualized
|
24.35%
|
|
|
Large Portfolio
|
Annualized
|
31.67%
|
No rotation today.
This was a weird week.
The correction everyone is expecting started and then stopped.
The sector model whipsawed again between industrial
expansion (XLI) and inflation (XLB).
Everyone (myself included) is waiting for something to
happen.
At the same time, Central Bankers are doing everything they
can to make sure nothing happens.
Welcome to the next round of indeflation. Don’t bother looking in a dictionary; I just
made it up. For that matter, don’t
bother looking up what Bernanke and Company are doing, because they are just
making it up too. This next round is
from Japan, which is pumping American levels of QE into a money supply only one
third of the size, for an even less predictable result.
Not only is the market wildly overbought, but my industry
model is wildly over-bullish. Even a
hedged version of the model would be net long.
The current investments are very inflation friendly: auto,
tobacco, gold&silver, groceries, oilgas, gasdivrs. Heck, even furniture is back in the buy zone,
and I could find myself back into CFI on the next rotation.
I feel like the wheels are coming off the tracks and the
train is still rolling. I keep my eyes
peeled for the inevitable crash, but central bankers have thrown so much
padding out there I’m not sure what a crash would look like any more.
I give Bernanke a hard time, but I’m not sure what his
alternative is. There is over a
quadrillion in unfunded liabilities on the planet.
That’s 1,000,000,000,000,000
The entire national “debt” everyone is so afraid of is just
shy of 17 billion. The actual global
exposure is SIXTY TIMES as bad.
Humans owe ourselves more money than exists.
Hence the printing.
If you try to protect yourself from the crash you’ll get
crushed on the way up. If you try to
ride the gravy train all the way you’ll get crushed on the way down.
Just don’t be over leveraged in EITHER direction.
Tim
PS – sorry for the short gloomy picture. I’ve been laid up sick in bed most of the
weekend. I’ll be back to Buffett when I
feel a bit better.
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