In October my IRA account balance increased 2.8%, which is after all expenses and fees. The SP 500 increased 3.7%. Given the substantial cash position of 62% at the beginning of the month, I am pleased with the return.
During the month I entered multiple positions, reducing the percentage of cash in the account to 21%. Domestic equities account for 27%, international equities 23%, commodities 15%, and inverse bond 14%. Within the equity positions, industrial materials is the largest position followed by hardware. This weighting, coupled with the commodities positions, highlights my opinion that deeper in the economy's supply chain, where I believe inflation is building, is a better place to position investments.
The largest drivers of growth in the account came from Huntsman (ticker: HUN), ETF Palladium (ticker: PALL) and RF Micro Devices (ticker: RFMD), up 19.8%, 14.4% and 12.8%, respectively. The reason for the increases, in my view, include a weaker dollar driving commodity prices, ability of Huntsman to hold onto price increases amongst strengthening demand, and improving execution by RF Micro Devices' management coupled with strong secular demand in wireless.
The worst performances came from Duoyuan (ticker: DGW), VIX (ticker: VXX), and Teradyne (ticker: TER). I sold both VXX and TER for losses of 18.3% and 5.4% during the month. Volatility was relatively mute during most of the month and the VXX constantly bleeds value, placing a ticking clock on my position. For TER the December guidance was much lower than I had expected so I decided to move to the sidelines until the stock has settled. DGW was down 9.3% from when I bought it. At this point I plan to hold on to it but will be watching future losses closely.
Poor execution happened on the second purchase of American Axle Mfting (ticker: AXL) as I bought on the open at $10.10 only to see the stock fall to $9.22 at the end of the day. The company announced the September quarter that beat estimates and raising full year revenue growth. I missed that the full year growth combined with results of the third quarter implied a management's guidance for the mid-point of December revenue was below the street consensus. After re-evaluating the position and listening to the conference call, I believe the fundamental trends remain quite healthy and believe the take-away from the sell-off is the market's unwillingness to overlook marginal issues around this stock. It also may suggest that the market remains skeptical about the economic outlook next year.
Summary
The following is a summary of my positions and their performance during October and relative to their cost.
| 29-Oct | Change | Cost/ | Sale/ | ||||
| Name | Ticker | % Portfolio | October | 30-Sep | 29-Oct | ||
| HUNTSMAN CORP | HUN | 4.6% | 19.8% | $11.56 | $13.85 | ||
| GT SOLAR INTL INC COM | SOLR | 4.1% | (1.7)% | $8.37 | $8.23 | ||
| FREEPORT MCMORAN COPPER | FCX | 3.9% | (5.0)% | $99.84 | $94.80 | ||
| AMERICAN AXLE MFTING HOLDING | AXL | 3.8% | (6.5)% | $9.87 | $9.22 | ||
| JEFFERIES GROUP INC NEW | JEF | 2.9% | 5.5% | $22.69 | $23.93 | ||
| LYONDELLBASELL INDUSTRIES | LYB | 2.2% | (4.1)% | $28.00 | $26.86 | ||
| RF MICRO DEVICES INC | RFMD | 2.1% | 12.8% | $6.46 | $7.29 | ||
| KULICKE & SOFFA INDS INC | KLIC | 2.1% | 5.4% | $5.90 | $6.22 | ||
| PERKINELMER INC | PKI | 1.9% | 1.9% | $23.02 | $23.45 | ||
| CA INC COM | CA | 1.9% | 1.1% | $22.94 | $23.20 | ||
| DUOYUAN GLOBAL WATER INC | DGW | 1.6% | (9.3)% | $13.79 | $12.51 | ||
| MULTI SECTOR COMMODITY | DBA | 9.8% | 8.1% | $27.48 | $29.70 | ||
| ETFS PALLADIUM TR SH BEN INT | PALL | 5.3% | 14.4% | $56.38 | $64.48 | ||
| ULTRASHRT LEH BROS 20+ YR TRE | TBT | 14.1% | 8.8% | $31.25 | $33.99 | ||
| MATTHEWS CHINA FUND | MCHFX | 10.2% | 2.2% | $29.37 | $30.02 | ||
| ISHARES INC MCSI CHILE | ECH | 4.7% | 2.6% | $73.91 | $75.84 | ||
| ISHARES INC MSCI HONG KONG | EWH | 4.7% | (0.6)% | $18.85 | $18.73 | ||
| TERADYNE INC | TER | Sold 10/28 | (5.4)% | $11.64 | $11.01 | ||
| Barclays Bank 500 VIX | VXX | Sold 10/13 | (18.3)% | $17.29 | $14.13 |
No comments:
Post a Comment