The portfolio gained 3.2% for the month of September, bringing our year to date return to 0.8%.* The S&P gained 8.8% over the month. Of course it is disappointing to underperform our benchmark so drastically, however that will be the occasional result of holding a low volatility portfolio. We question the validity of this rally. While the economic data has improved slightly, the economy is still in grave difficulty. There have been rumors and intimations that the US will embark on a new stimulus spending and a program of quantitative easing. Previous rounds of such stimulus have done nothing to improve employment rates, and we fear that each time the government takes over a larger portion of the economy it dooms us to a longer period of sub-optimal growth. How that can be positive for equities is beyond us. Even more amazingly, 10-year Treasury rates ended the month nearly unchanged! We have been wrong about the direction of rates for a very long time now, but this just seems absurd.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
12 Oct 2010
Small-C August 2010 Letter
The portfolio gained 1.7% for the month of August, bringing our year to date return to -2.4%.* The S&P lost 4.7% over the month. We are pleased to have outperformed our benchmark. Our shares positions outperformed the market slightly, while of course the low-volatility bond positions held their ground.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
20 Sept 2010
Small-C July 2010 Letter
The portfolio gained 2.9% for the month of July, bringing our year to date return to -4.1%.* The S&P gained 6.8% over the month.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
14 Jul 2010
Small-C June 2010 Letter
The portfolio lost 1.1% for the month of June, bringing our year to date return to -7.0%.* The S&P fell 5.4% over the month.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
1 Jul 2010
Small-C May 2010 Letter
The portfolio lost 5.8% for the month of May, bringing our year to date return to -5.9%.* The S&P fell 7.6% over the month.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
20 May 2010
Small-C April 2010 Letter
The portfolio gained 0.6% for the month of March, bringing our year to date return to -0.1%.* As the S&P rose 1.6% over the month, we are disappointed with our performance. Where did things go wrong? A big contributor was ongoing underperformance of China versus US stocks. China outperformance is one of our core positions, and it hasn't been going well lately. Outside that, performance was a mixed bag, with no notable great successes or losses.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
13 May 2010
Small-C March 2010 Letter
The portfolio gained 3.7% for the month of March, bringing our year to date return to -0.7%.* It was helped by some recovery in the equity markets, in which we maintained a long position. Our investments in China began to catch up to the US market somewhat. Our single stock picks showed mixed performance - one volatile trade we liked, Toyota Motors, was up 8%, while our high dividend shares lagged the market. US Treasury yields increased slightly, while high-yield bonds made gains, so our hedged high-yield position performed well.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
* We report the percentage gain or loss during a month in an additive sense for ease of comparison, however the year-to-date returns are reported as a chained series. As the total return become greater, and as inflows have an effect on the portfolio, the two will diverge. Adding up the monthly returns for the year may not give the precise total return.
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