Portfolio Performance

March was a difficult month (and so was the first part of April). There have been numerous reports of well-known hedge funds suffering big losses, but that is small solace. I made two fundamental mistakes last month: 1) not covering my short positions in the aftermath of the Bear debacle, and 2) entering into the long gold / short homebuilders trade. The first I should have known and discussed last week. The second was premature. I had been saying since Christmas that gold was overbought. I still need to work on being patient. There is no imperative to enter a trade. It is acceptable to hold cash.

So far my call earlier this week seems to be correct. But we will not know for some time whether I was truly right. This market is all over the place. It could rally sharply higher next week -- who knows? The price action the past couple of days was good (for me, being short). The market tried to move higher mid-day Thursday but failed, and then slowly ground lower all day yesterday, closing near its lows. But the volume was nothing spectacular, so its meaning is tempered. The news yesterday was bad though -- GE surprising on the downside, after assuring investors everything would be fine. They are very international, too. Consumer Sentiment reaching some of its lowest levels since the early 80s. That was a bad time, and this is a bad sign for the economy. So I watch and wait.