What a fantastic first quarter we had!
Despite being cautious into the end of last year (see our December Review) our paired Long-Term and Short-Term Portfolios have gained $68,000 (9%) in the last 90 days. Our Long-Term Portfolio has gone from $608,375 on 12/6 to $640,797 as of yesterday – a gain of $32,422, which is 5.3% and perfectly on track for our planned 20% annual gains.
Oddly enough, it was our usually bearish Short-Term Portfolio that made the big gains over the past Quarter, mostly because we weren't actully that bearish and made some aggressive bullish bets as oil collapsed that have already paid off. The Short-Term Portfolio was up "only" 65% for the year as of our December review at $165,136 and, because we turned bearish into the recent dip – we've popped to $201,495 on yesterday's close – up $36,359 or 22% in 3 months.
Keep in mind we are LUCKY when we happen to time a major market move correctly, like we have this quarter – you can't expect to make 10% every quarter, especially when our goal is to remain well-hedged to protect our assets over the long-term. What we are trying to do is grow our portfolios a combined 20% each year and, in fact, when we hit the 40% mark last month – I made the case for just cashing out – as we had already made our 2-year goal in 14 months.
When you make unrealistic amounts of money – CONVERT IT INTO CASH! We converted our Income Portfolio into cash last year and, what do you know, the cash has jumped another 20% in value. That's something we need to consider with our own equity positions, if we trade them in for strong Dollars, we can turn around and use those Dollars to buy equities backed by weaker currencies or commodities – something we have already begun to do in our Long-Term Portfolio.
As we've note for the past few weeks, we have been VERY SKEPTICAL of this recent market rally and we've stayed very CASHY and CAUTIOUS in our portfolios now, as the market turns down, you can really begin to appreciate the value of having…
