For the month of March from 3/1/07 to 4/1/07,
- Net worth is up by 3.28%.
- Value of my company holdings (stock options, ESPP, etc.) is down by 5.35% partially due to my liquidation.
- Everything else excluding my home and cash is up by 4.54%.
- If including cash in #3, it’s up by 3.46%.
My portfolio has not changed much since the end of February. I have liquidated majority of my holdings that correlate to the general stock market. Right now I only hold 0.2% of my net worth in such stocks/funds. I also still hold some short positions in QQQQ and housing stocks which only hedges against less than 7% of my own portfolio. I’ve closed out about half of my hedges, and some unsuccessful shorts.
Here is the current composition of my portfolio:
1. 55% in metals.
2. 35% in energy.
3. 10% in consumer staples, water, and agricultural stocks.
Here is the current composition of my net worth:
1. 62.6% in my portfolio+cash+misc.
2. 20% in my company holdings.
3. 17.4% in home equity.
Last month I commented:
I believe the secular bear market in stocks may have resumed. The unfolding of such secular bear market however does not necessarily mean a fall in the absolute price of the stock market this time around. Rather, the stock market will fall on an inflation-adjusted basis, and also against gold. There is also a chance that Fed stops the downward spiral in time, and create a bigger bubble in everything going forward. The most likely timeframe is in 2008/2009 for next (potentially higher) peak. In fact, the stock market can put in a higher high in 2009, but not necessarily beating the accumulated inflation since 2000. I do expect the stock market to go lower than the low on 3/5/07 this year. I also expect the general stock market to put in less than 3% gain for the entire 2007 year.
After much seesawing in March, this stock market really has some inexplicable strength, except in a few isolated mortgage stocks and financial sectors. Fundamentally speaking, the problems in subprime and Alt-A mortgages will create a huge problem for the market going forward. Yet technically, the market doesn’t seem to go down much at all. How much longer this market can hold up? I’m still waiting for a safer entry to short more. In the meantime, NEW century mortgage has filed bankrupt, and several other mortgage companies keep falling.
I’m not sure whether a higher high will come first before a lower low than the Feb/March low. Although my belief is that a lower low will materialize later this year, my conviction is wavered by the market strength. My current plan is still going short against financial/housing/general market and possibly adding some tiny long positions in energy or gold. But I will take my loss if the bull market runs away to the upside again.
Best luck navigating in the dangerous water.
Special note: returns were calculated by subtracting 3.00% APR return of my cash position.