It was a volatile week for me, and to be honest a bit taxing mentally. We came into the week with a large amount of long exposure and a full book of positions. Whereas over the past few weeks those positions had been running strong on flat to slightly down days, it was a different story this week. The underperformance was a result of two things, a decent exposure to the materials sector, and a market that feels a bit tired. The market itself was anything but volatile, but with a lot of long exposure after the large run we’ve had, the paranoia of having your gains taken away can magnify what is taking place underneath the surface.
For this reason I’ve chosen to keep it extremely short this weekend, and I am going to drastically cut down on my research over the weekend. Sometimes the best course of action is not to be too smart, there’s a lot to be said for being just a little bit ignorant at times in order to stay with the trend. So I apologize now for the lack of color on the week and my book in general.
For the week we lost 70 basis points of absolute return and 130 basis points of alpha.
There was significant rotation in the portfolio this week as we sold out of a lot of our materials exposure and certain tech names that we had great profits in. Those positions include Perrigo (PRGO), Oplink Communications (OPLK), Molycorp (MCP), Atmel Corp. (ATML), Silver Wheaton (SLW), Incyte (INCY), Apollo Group (APOL), partials in ICICI Bank (IB) and Comania de Minas Buenaventura (BVN), and a two day trade that took place in JetBlue Airways (JBLU) which I would rather not talk about.
We did rotate and add back some of the long exposure which was decreased by selling out of those positions. Positions added this week include LivePerson (LPSN), Power-One (PWER), and OSI Systems (OSIS).
I will give more color on what we did this week on Monday or Tuesday.
As always you can see the whole model portfolio here.
click to enlarge
Disclaimer: Nothing that I say or show on this blog should ever be considered investment advice or a recommendation to buy or sell any security. The performance numbers that I post in the momentum book should never be regarded as representative of any specific client account managed by Surfview Capital, it is there solely for educational purposes and should be treated as such.