Swing Trading Strategies & Stock Picks Since 2003

Year 2, Week 8 performance of the mutual fund
Comments: We came into this week saying we'd be hostage to Washington D.C. and that's how it played out. There was a big loss Monday in the markets (4%) but I attribute that as 'give back' for the gifts we received at the end of last week, when we rallied 7-8% in 1 day and 1 hour, based on the bailout rumors. The rest of the week was violent in terms of movements intraday and we're right back where we began the week - waiting for Washington. I expect them to hand the market what it wants by Sunday night. This is starting to get old school. Friday night bank takeovers and Sunday night government interventions. One begins to get numb to it all.
There is no use talking about any fundamentals anymore because they have become useless. I sit aghast as I watch a stock like Mosaic (MOS) now - I do buy in (and was an early proponent) on the global slowdown story but a year ago this stock was earnings something like $3-$4 and trading in the $60s. Now its earnings $14.00 and trading in the $70s. I get that markets are forward looking but seriously 10% future growth would at least imply a 10 PE ratio. We're on target for sub 6. And it's still growing far in excess of 10%. Just one of many examples of an inane market that is penalizing anyone who buys and holds.

Not much more to report after that - much like the market begged for interest rate cuts, Bear Stearn bailouts, AIG bailouts, Fannie/Freddie bailouts and rewarded the nanny state with a rally for its generosity, I'm expecting the same here. But as scary as it sounds I think $700B is a pittance compared to the whole problem. The Federal Reserve is like Atlas right now, literally holding the entire credit market on it's shoulders - and the equity market is so sure this bailout will make all the bad monsters under the bed go away, it's staying elevated. Or maybe because you cannot short financials like IBM. Hence after the obligatory post news bounce I'll be heading to a more conservative stance.
That said, we've been conservative all week - with the market up or down 2, 3, 4% a few days this week, our first four days our performance was as follows +0.03%, +0.04%, +0.05%, and -0.09%. Now that's perfectly hedged. Friday we lagged as the commodity exposure we built late in the week (I guess all these stocks are headed to zero as the apocalypse we are headed to will not require food nor electricity) took a bite out of us and there were no big winners to offset. Regions Financial (RF) was up 6% heading into the close but somehow lost almost all of it in the last few trades - hello SEC? $14.70s at 3:59 and $14.00 at 4:00? That alone knocked 3 cents off our NAV! But all in all we protected capital with a high cash position and just are waiting for some day where individual stock analysis matters. We had a nice win in SequeonomSQNM) but can't risk having that large of an exposure going into a trial announcement since a stock can be up 30% or down 30% in an instant and we're not into that sort of risk. Lennar (LEN) provided us a nice trade this week and mostly we cut back positions again this week. There are just not many money making opportunities on the long side - most of the action in individual names is still on the short side. It's like a broken record.
Someone kick me in the pants and remind me to buy Wells Fargo (WFC) the next time its in the $33s... grrrr... I wonder what bank the FDIC will hand them ala JPMorgan (JPM)
The S&P 500 lost 3.3% this week and the Russell 1000 lost 3.6%. Rising Tide Growth generated a 0.9% loss, mostly just by (a) not being heavily exposed to the market, (b) trading in and out rapidly in commodities and financials/housing as a glorified daytrader (c) 1 big winner for the week and (d) cutting back short ETF exposure post Monday when the mood darkened the worst. Not really any other way to make money (or lose less) in this market. Very frustrating from an investing standpoint.
As always if interested in pledging an investment when fund is ready to launch (shooting for early-mid 2009) please attach a comment here, or send me an email (need your state please). We are now at roughly $4 million pledged - thank you.
*** Year 1 Results here: +10.1% vs -14.0% S&P (+24.1%)
Year 2 Metrics
Price of Rising Tide Growth: $9.785
Year 2 Performance to date (vs Aug 1, 2008): -11.13%
Comparable S&P 500: 1213.3 (-3.73%)
Comparable Russell 1000: 660.6 (-4.31%)
Fund return vs S&P 500: -7.4%
Fund return vs Russell 1000: -6.8%

Last week's results here.
Since the market cap of the median stock in the Rising Tide Growth fund (median $7.1 Billion as of April 08) is significantly below the SP500 index (median $13.1 Billion as of September 07) but higher than the median market cap in the Russell 1000 (median market cap $5.8 Billion as of September 07), I am measuring the fund against both indexes. Click here to see all fund's holdings as of July 2008.
Basis for indexes for year 2 is closing price August 1st, 2008.
SP500 : 1,260.3
Russell 1000 : 690.3