Monday

TheInflationist: Weekend Summary 040509

Post a Comment May 4, 2009 – 5:01 pm |   | Permalink |  Print This Post |

Markets continue to rally defying more bad news. The Bulls believe the worst is behind us and that the market is forward-looking: hence despite bad numbers, the decline is slowing (or so they think). Fund managers who have done badly during the decline must now make up for their under-performance; and to “miss out” in a 30% market rally and potentially the “all time low” for the next Bull run would be hard to explain to their clients. We remain cautious. Disappointed that markets failed to pull back significantly to allow us to ride this up. It is OK not to make money, but it is never OK to lose money for capital preservation is key. Our quick trades over the week made us some money last week, pushing our performance now up to 96%. We are very bullish on Natural Gas and Agriculture (and Gold) - and we plan to play this by buying on weakness.

We also reinvested $5,000 of our profits into our custom-made Warren  Buffett Investment Index (not shown in this weeks portfolio summary). For new readers, please take the time to read our previous post. Our profits in this can be easily tracked by following “WBuffett” (ie 1:8 ratio of profits/losses = $5000:$40000): whereby we replicated part of Warren Buffett’s portfolio (ie we picked the stocks trading below what he paid for). Even if Buffett breaks even, we would be far ahead. It is probably not the best time to be buying ANY stock with the Dow being so overbought, but this is a long term play. We will anchor our next $5000 investment if and when the Dow goes back to previous lows.

We are looking forward to hitting the 100% mark. Call it wishful thinking, but at 100% return compounded annually, our 40k will be:

• $1.28 million in 5 years
• $40.9 million in 10 years (i think we will be happy to stop here)

TheInflationist Weekend Summary 4 May 2009