Week 6 2012 Performance...Another positive performance with hits and misses

Although the markets ended on a down note on Friday this past week, overall it was another solid positive performance week.  What was striking about this week's market action was how the DOW and S&P 500 rebounded time and time again when it looked as if they were going to sell off.  Just about every dip represented a time to get in.  Even on Friday when markets were lower right from the opening bell based on Greek news and it looked like the major indices were poised for their first down day of greater than 1% there was a turn to the upside in the final trading hours.

From a high level perspective in looking at the fund and overall markets I came up with the following points;

• No down week yest this year in the fund.  I have no idea how much longer I can keep this up but overall volatility has been trending down all year.  As one colleague pointed out this week we haven't seen a 1% down day yet this year
• 81% of the total fund gain since inception (3/31/2010) has been from one position....Apple 01/19/2013 call options @ $370 which only represents 12.6% of the total portfolio value
• The short positions we have held has been a 50/50 mix bag with Groupon flat and LinkedIn up big this week after they beat numbers.  I'll dive into this with a new upcoming post.
• Buffalo Wild Wings $BWLD soared on Wednesday after they reported blow out numbers see related post  [February 12, 2012 Buffalo Wild Wings Reports Hot 4Q

Anxiety continues to build as investors wait in anticipation of a marked pull back in the major indices.  There are definite head winds that continue to concern me such as no definitive European debt solution, future earnings estimates are shrinking, and now issues between Israel and Iran over nuclear proliferation. From an economic standpoint we all know how devastating a further increase in gas would be to an already fragile economy.  We know that $4 per gallon gas will in essence bring things to a screeching halt.

However with all that said, trying to time this market and when it could possibly start to slide would be like trying to catch a falling knife.  To me the prudent thing to do is to remain defensive.  Stick with your game plan and find quality stocks/assets which have a margin of safety built in such as consistent dividend payers, companies that have a solid balance sheet with little to no debt, and firms that can continue to grow in some way shape of form (think Apple).  Remember that cash is only moderately trash right now since the Fed has punished savers with it's lower interest rate policies.  But what cash does provide you is some piece of mind and the ability to fight another day.

Earning reports slow this week while there is a pickup in economic data releases such as the following;

• Tue - Retail Sales, Business Inventories
• Wed - Empire State Mfg Survey, Industrial Production
• Thu - Housing Starts, Producer Price Index, Philadelphia Fed Survey
• Fri - Consumer Price Index

Have a great week