Could Have Been a Lot Worse…
One month down, eleven to go? Can we stick our heads out of the foxhole yet?
Personally, I was off just a little in January. Comparing myself against a bunch of value indexes, which did better than growth indexes in January, I did better than all of them. We’ll see what the future brings, though, these things can turn on a dime.
So what worked for me? Arkansas Best, National Atlantic (not out of the woods yet), Charlotte Russe, Gehl, YRC Worldwide, Alliance Data Systems, Reinsurance Group of America, and Honda.
What hurt? Nam Tai, Gruma, Valero, Deutsche Bank, Royal Bank of Scotland, and Anadarko Petroleum.
Common factors:
- Financials with complexity got hurt
- Energy was lackluster at best
- Industrials, Retail, and Trucking did well
- Value took less pain
- What got whacked before went up
One final note here. Look at this graph from Bespoke. The “sea change” there mirrors my own turn in performance. What does that tell me? Perhaps it tells me that in late 2007 there were a lot of hedge funds liquidating positions that value managers liked to own. After the end of the year, the selling pressure ebbed, and value seekers came in. At RealMoney today, both Cramer and Marcin were commenting on they could find stuff to buy when the market was down in the morning. I agreed; I haven’t seen this many good values since 2002. I’m not counting on anything here, but I think my portfolio has attractive valuations and prospects. Much as I am not crazy about the macro environment in many ways, I have some confidence that my portfolio should do better than the S&P 500 in 2008.
Full disclosure: long NTE GMK VLO DB APC RBS ABFS NAHC CHIC GEHL YRCW ADS RGA HMC
February 1st, 200811:45 am at
Good article in the Financial Times today talking about the Value Investors like Buffet, Ross and Perleman and how it is time to buy.
http://www.ft.com/cms/s/0/26e7c1e8-d02f-11dc-9309-0000779fd2ac.html?nclick_check=1
February 1st, 20083:11 pm at
Hi David,
Once again, kudos for keeping up a consistently high quality of posting here. Your thinking often sets my brain in motion — in a very good way.
If you don’t mind, I’d be interested to get your take on the current status of the bond insurer problem and how you think it might play out. In addition to what happens to MBI and ABK, I am also interested in whether you think others with a stronger financial position (AGO?) might make significant gains in this space.
Cheers,
-Bill