This week began with both bonds and equities lower. Bonds rallied through the week, ending up roughly flat, but equities kept going lower. The biggest moves occurred on Thursday and Friday, as the equity sell-off accelerated into the big options expiry. With the expiry behind us, dip buyers may have more chance of success next week.
In addition to bonds, defensive assets such as Gold, CHF, JPY and utilities rallied, though the moves were not large. By contrast, consumer discretionary stocks and crypto-currencies were clobbered. The defensive posture we adopted in both our sector and 60/40 portfolios stood us in good stead, finishing the week ahead of benchmarks by 77bps and 72bps respectively by our estimates.
A Chinese rate cut on Thursday continued the theme of monetary policy divergence to the US. We took advantage of the resultant rally in Chinese stocks to take profit in our KWEB long in the short term portfolio. We maintain the position in our medium term portfolio.
Oil had a relatively quiet week, giving back earlier gains on Friday. Perhaps the UK sending a gesture of 'goodwill' to Ukraine helped to defuse some tension in the energy markets?
Finally, DIS picked the wrong week to release a poor earnings report. The releases of both NFLX and DIS appear to confirm that growth in the streaming sector is weaker than previously expected.
David's trades:
In David's medium-term portfolio (The Money Game) we made no changes this week.
Portfolio | Ticker | Date entered | Entry | Last close | Size |
Medium term | KWEB | 36.54 | 36.83 | 10% | |
Medium term | CNYB | 5.60 | 5.69 | 100% | |
Medium term | DIS | 152 | 137.41 | 100% | |
Medium term | CCL | 20.25 | 20.00 | 50% | |
Medium term | TBF | 16 | 16.49 | 50% | |
Medium term | XOM | 64 | 72.24 | 50% | |
Medium term | Short EUR/USD | 1.16 | 1.1347 | 100% |
Closed trades year-to-date = 0
Closed trades that made money = 0
Closed trades that lost money = 0
Closed trades that broke even = 0
An archive of our closed trades is available here.
John's trades
In John's short term portfolio (More Buyers or Sellers) we took profit on our KWEB position, and entered and then stopped out of a position in GPRO. At this point, our NNDM holding has shrunk to be insignificant from a risk standpoint.
Portfolio | Ticker | Date entered | Entry | Last close | Size | |
Short term | NNDM | 4.62 (avg) | 3.24 | 100% | |
Closed trades year-to-date = 6
Closed trades that made money = 2
Closed trades that lost money = 3
Closed trades that broke even = 1
An archive of our closed trades is available here.
S&P sector portfolio
Sector portfolio relative to SPY: 77bps
Cumulative year-to-date relative to SPY: 62bps
An archive of our closed trades is available here.
60/40 portfolio
60/40 portfolio relative to benchmark: 72bps
Cumulative year-to-date relative to benchmark: 59bps
An archive of our closed trades is available here.
Thanks for developing the "Honest Board". Very helpful.