Thursday, October 3, 2013

Q3 Discussion

Well folks, looks like it's time for my Q3 discussion and analysis.  And while I hate to count my chickens before they're hatched, it looks like my portfolio has finally awakened from it's slumber.

More specifically, an unsustainable short interest in Sears coupled with a bullish report from Baker Street Capital caused the stock to shoot up in September.  I responded by trimming my position and locking in some gains.  However, as you'll see in the exhibits below, Sears is still very much a core holding.  

So what else is going on?  Well frankly, I'm as nervous as ever about valuations in the market, and as a result I'm holding a lot of cash (37.4% of portfolio).  Furthermore, although I continue to search for new opportunities, I repeatedly come up empty handed.  In fact, these days the market reminds me a little of 2005-07.  Maybe this makes me the investing equivalent of Chicken Little, but at least I sleep well at night.

Anyway, here's the summary:
  • I came into the year with $213,090 and ended the quarter with $268,074.  I didn't deposit or withdraw any money, so this increase is straight appreciation.
  • My portfolio has increased about 25.8YTD (35.6% IRR), whereas the Hypothetical S&P has increased about 19.7% YTD (27.2% IRR). 
And here are the exhibits (7+ year performance summary, waterfall graphs, holdings summary, and quarter-to-quarter bridge, click to enlarge):

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