That Was My Best Relative Value Week in a Long Time

I’ve worked for years to take the emotions out of my investment processes, with some success. Where it gets tough is when I am in an absolute and relative drawdown, as I was for most of the second half of 2007. Nonetheless, I stuck with my disciplines. This week, a lot of things went right:

• Retail
• Insurance
• Trucking
• Energy
• Small cap value was the best style

Will this persist? Who can tell… I was ahead of the Russell 2000 Value index this week, even though my portfolio is more midcap value in nature. I’m still wrestling with where to deploy incremental funds. I’m 2-3 positions light at present, and I know I am already insurance-heavy, with many of my best candidates being insurers, and the rest Irish Banks. I don’t want to get too heavy in financials… I’m overweight there now. Ideas are welcome. Oh, at the end of the day I did make a small purchase:

Rebalancing Buy (1/25/2008):

Bought some Gruma, SA (GMK) into the close. Tortillas and other Mexican foods are not going out of style, even if the Mexican stock markets are having difficulty of late. I’ve had a good week. Hope you did too.

Position: long GMK

The market always has a new way to make a fool out of you, so I am not relying on a change in the financial weather here. I just keep doing what I do best.

Full disclosure: long GMK