Everything Is Going Our Way

The market rose about 3% last week. Our holdings rose higher than that while our nonholdings — that is, stocks like Sun that I didn’t manage to buy and stocks like UTStarcom that I sold — didn’t perform so well. Thus, what we own is up and what we don’t own isn’t. That’s why I say that everything is going our way.

Now, to niggle a little, it would be nice to have bought Sun at $3.42 a few weeks back. True. Holding our put options on the Basic Materials sector longer would have given us greater gains. Also true. But overall, this is about as good as it gets.

Here’s the quick rundown. Last week’s four-day rally was the biggest in six months and was caused by…whatever whomever you ask thinks. Some say it was the price of oil falling below $47. Some say pent-up buying demand (always a trusty response — what else causes buying, a pent-up desire to sell?). Some say a Treasury Department memo reporting that China isn’t overly manipulating its currency. I say we just got too bearish too soon and that we’ll enjoy some sunshine for another month or so until heading generally downward during July and August. I’m still in my seasonal wait-and-see pattern, expecting to buy heavily in August or early September.

But our current portfolio is doing just fine. Double The Dow rose 7% last week and is now down just 6% so far this year. If you followed my advice last weekend to get started in that portfolio right away, hats off to you. You’ve already earned more than your bank account would pay you in two years. Meanwhile, the Dow 1 is now up 6% so far this year. The Dow itself is down some 3%.

Ultra Semiconductor rose 6% for the week, putting it up about that same amount so far this year. That masks the somewhat remarkable recovery that the fund has delivered since its year-to-date performance of -12% a month ago. Since the mid-April low, the fund is up more than 23%. I’m happy to have held on.

And happy to keep doing so. My suggestion last week that you take time off from the market to walk among the flowers is looking ever more prescient. That hands-off approach is working well now. So enjoy another walk.

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