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October Portfolio Recap

Despite being stuck in neutral the last week of October, our portfolio gained 3.3% for the month. We are now up over 34% on the year and have gained an average of 1% a week for the last 21 weeks.

I am beginning to position the portfolio more aggressively ahead of what I expect will be a strong finish to 2010. Cash levels are down to 12.5% and I have allocated a portion of the portfolio to deep value/turnaround situations, including RIMM, CHRS, SKX and CBK. I am also looking at adding shares of WINN, JAKK, CHS ans CTRN.

Third quarter earnings have come in strong thus far, and mid-term election gains by the Republicans should set the market up for a strong finish. I continue to have faith in the mid-term election cycle, which predicts a 49% run from the mid-term low to the following year high. At just 12.5% of the portfolio, I have begun to transition to a fully invested position. As the rally takes hold over the next 6 months, I expect to move to over 100% invested.

Overall Sentiment:  Bullish.
Portfolio Yield: 7.41%
Projection: Break-out to 1,280+ this winter.

Top 5 Positions:

  1. Cash - 13%
  2. First Energy (NYSE:FE)- 6%
  3. iShares S&P U.S. Preferred Stock Index (NYSEARCA:PFF)- 6%
  4. Eli Lilly (NYSE:LLY)- 5%
  5. Excelon (NYSE:EXC)- 5%