Back in the Black

No way. If you had asked me two weeks ago whether I would get back in the plus column for 2008, I would have said, “Yes, but in eleven months.” Well, my broad market portfolio is up on the year. Even now, I know that when I write next week, I could be on the other side of the line.

The thing that gives me some degree of confidence at this point relates to what I wrote at RealMoney earlier today:

David Merkel
Rebalancing Trade
2/1/2008 2:56 PM EST

It’s not supposed to work this fast, but I did a rebalancing sale on Alliance Data Systems. Looked really cheap after the merger agreement blew; I guess it was cheap! Hanging onto the balance for more gains. It’s been a weird year so far. On the bright side, I am back to breakeven for 2008, and I have a better, cheaper, more financially sound batch of stocks than I did in mid-2007.

That means something to me. I even think my portfolio has more growth potential than the one I was running with in mid-2007, and I don’t pay up for growth. I do accept it if it is being offered gratis.

There is something different going on in the markets now. It is as if the wind has moved to my back and out of my face. That said, it could just be a bear market rally, or a brief spurt of mid- and small-cap value amid a market favoring growth investing.

Then again, I am grateful to God for the turn; I’ve made a number of good picks and sales lately, and they have paid off more rapidly than normal. With that, I am ready for some retrenchment here, but who knows? My philosophy is to play for maximum advantage; if I have made gains early in the year, I want to play for more. I always hated the idea of indexing if one had a good start to the year. Why cheat your clients? Do your best regardless, and most of the time, it will win.

Hey, I’m just grateful to have made money in 2008. Hope you make money too, and more than me.

Full disclosure: long ADS