I am pleased with how the portfolio held up in the first quarter of 2007. I have completely avoided financial and “consumer discretionary” stocks – both of which were big losers in Q1.
My investments are focused in areas that are working: energy, agriculture, mining/materials. I am content with my 44% cash position and 9% gold position. I am also staying disciplined with my sell strategy: sell anything in 15-20% loss territory. This has saved me from blowups in the past and also helps to reduce taxes.
Changes to the Portfolio:
Going Short China: On 4/3/08, I bought FXP (ProShares UltraShort FTSE/Xinhua China 25) at $78.56 per share. I am a short-term bear on China; FXP goes up when Chinese stocks go down. FXP also has embedded leverage, which explains some of the volatility.
Buying Chip Stocks: I have bought a few deep-in-the-money calls on the SMH and Intel.
*I funded these purchases by selling some losing stocks, generating a ST capital loss in the process.
Thinking About Financials: I plan to dip my toe in the financial services sector through purchasing shares in a high quality bank. I might balance it out with a position in SKF (Proshares UltraShort Financials).