What I have learned in the last 12 months
Same time last year something about the markets spooked me. I pulled my retirement account out of equities and into money market funds and wound down two thirds of my most volatile long positions in my investment account. There was smoke in the air and soon enough, the fires followed. I did get back in though.
That said, I realized that macro factors are fully front and center in our current investing environment and even as a long term value investor, I can’t just sit back and watch my investments get decimated repeatedly. Since then I have become a yet more voracious reader; keeping a closer eye on global economic factors, Central Bank decisions and learning more and more about countries like Brazil, Russia, China, Greece and France.
We are at an inflection point and as an investor I need to have a position, solid or not, on overall macro conditions – since March this year, I have been short Russia, Oil and Emerging Markets.
There are still hidden value plays out there. My favorite YTD? Leapfrog – a turnaround, children’s edutainment company looking to walk in the shadow of Big Brother Apple.
The Bernanke Put is alive and well. The question is, how much more can we continue to ride on Hopium?
Always have some cash to deploy. You never know when an enticing opportunity might appear on the horizon. I currently have my eye on Ballantine of Omaha.
Cheasapeake – McClendon might have acted inappropriately but the CHK volatility gave me the chance to understand how to play options. The company can survive without him and with Natural Gas at rock bottom and the discovery of a new bountiful oil well, the future looks bright.
Facebook – the more things change the more they remain the same. And guess what? People forget very quickly.