Monday, October 1, 2007

Portfolio A1 Jumps 5% in Week

As the equity curve below shows, the August plunge has largely been eradicated in September, thanks in part to an impressive 5% gain in the portfolio last week. The strong week puts Portfolio A1’s cumulative return back into the plus column, with gains since the February 16th inception now at 1.8%. While this performance continues to trail the 4.9% gain registered by the benchmark S&P 500 index during the same period, an optimist might venture a small smile for the first time in about two months.

One unusual aspect to last week’s gains is the decision by the stock ranking system to drop DryShips (DRYS) after a stunning 27% gain in just four weeks in the portfolio. This is the first time the portfolio has dropped a double digit gainer and it is a little bit of a head scratcher, but perhaps the stock ranker has turned HAL on me taken up to reading Investor’s Business Daily, specifically a Friday article titled Smiling Dry-Bulk Shippers See The Boom Times Lasting For Years.

To replace DryShips, the portfolio has decided to dive headlong into China by picking up Shanda Interactive (SNDA), the Shanghai-based interactive entertainment company. In my discretionary trading I am short China stocks at the moment, so this portfolio may provide yet another interesting competition between man and machine.

There are no other changes to the portfolio this week.

A snapshot of the portfolio is as follows:

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