HTO report: A Strange Trip
It's a market that favors lousy stocks (poor balance sheets, etc).
Except when it doesn't.
Examples of May weirdness:
Since our last report I bought VIPS and EAC on May 20. Each are down 15% in less than two weeks.
On the 27th I bought AIQ, up 25% in less than four days. Along with PRSC (5/30) and FBRC (5/28) that makes five purchases that together broke even. Broke even like when the office temperature is 55º in the morning and 88º in the afternoon and the boss tells you to stop complaining, the average temp in the office that day was 72º
After my previously documented lousy start to May (documented in my last report), the second half was much better. I was 3% behind my benchmark, I finished the month 0.83% behind (+1.44% to +0.61%). I'm now up just less than 1% (compared to the benchmark) since inception of the High Turnover Portfolio on March 1 (7.85% to 6.91%). I expect to do a lot better in the long-term, but no guarantees about the summer of '13.
With all the turmoil, I sold a lot of stuff: SBGI, CRD-B, NAVG, ACY, IBCP, JAH, NRF, DNZOY. I'm now down to only 23 holdings. I was buying strictly by the numbers, but I found that if I bought a stock solely by the numbers, even if I didn't like its story, I tended to sell too quickly. I held SANM for a long time, to no avail (great numbers!) and as soon as I finally gave up on it it started to soar (up 30% in 5 weeks). I still have stocks like that in HTO, but I've cut back here and increased my long-term stocks by adding equities that have great stories AND great numbers to that portfolio ( NOAH, CSCO, OME).