April 1, 2015

So I was incorrect in thinking that the S&P would continue running higher after the FED announcement on March 18th.  Instead, its been range bound, either consolidating, or topping. The S&P can’t seem to break through the 2100 level in any significant way. That said, I still think the market has some room to run, because I think that the FED will not increase rates until the 4th quarter, or later! The economic data has been weak, but it doesn’t really feel that way in my gut. When I walk around, go shopping, talk to business owners, and generally live life around Philadelphia, it seems like things are getting better. Companies have more people employed. People are buying things and saving money. Gas prices remain low. I think there is money being loaded into people’s chambers and that it will get spent. However, I still like the international markets more, because they are flat out printing money.

As of the close of trading on March 31, the portfolio was up 3.53% and the S&P was up 0.88%, for an Alpha of 2.65%. Basically the same place I was on March 18th. I’m satisfied with that since I had the direction of the market wrong. I traded out of a losing SPY position at a minimum loss, took my lumps with Gamestop, but evened it out with Restoration Hardware, Lumber Liquidators, and Macy’s.

I have distressed trade positions in SanDisk, Tyson Foods (I’ve taken some profit on that one already), and Lumber Liquidators. I’m looking for a bounce on SanDisk, another bounce for Tyson Foods back towards 41, and a retracement for Lumber Liquidators to at least 36, which is my first sell point, then back to 41.

Other than that, my positions are fairly “Blue Chip”, with most of it being indexed towards Europe, Japan, Healthcare, a touch of China through Baidu & Yahoo (proxy for Ali Baba), and some tech names like Facebook and Apple.  The other positions are small and many of them are tantamount to “toe dipping”. I’m pretty comfortable with that strategy for the time being: stick with Europe, Japan, and Healthcare with a touch of China, and look for oversold stocks.  I’m watching Healthcare most closely as it has been quite an outperformer.

03-31-15 – Statement