Week 14 2012 Performance........Steady Performance

Once again we were solidly in the green this week up another 1.5% bringing our YTD gain to 24.5% handily beating the 4 other major equity markets that we track.  This week we saw much activity in the DWCM fund as well as the markets in general.  We dodged a bullet on Friday with the markets being closed as the jobs number was a huge surprise miss with only 120k jobs created vs. an expected 200k (see Job Growth Loses Steam) for the highlights.  I just wonder if we will see the pent up selling pressure full force Monday morning or if it would subside at all over the long weekend?  We could potentially see a sharply down opening only to see a rebound late in the afternoon typically after 2pm when buyers come in to catch the dip.  I have about 15 open orders in place so being down to start the week might not be that bad for us.


So what everyone will want to know if this jobs disappointment is just a blip on the radar screen or is there something else lurking in the weeds.  On Thursday we saw that the weekly initial jobless claims were down once again and are at the lowest level since before the financial crisis (see highlights here from Barrons).  This means less layoffs but simply put there is just not enough job creation out there.  No one can say with a definitive answer but most of the country has seen unseasonably warmer weather throughout the year so I would suspect part of the job growth in prior months to this phenomena.  


This was a good week for us to continue taking profits as I finally sold some of our Apple $AAPL long option position.  It's always hard to sell something that has been on such a tear and as great of a company as Apple is the stock price can continue to move up.  But you get to the point where you can't be greedy so we took some money off the table and maintained part of our original position.  


I also took the liberty of cutting some dead weight this week letting go of our remaining position in Owen Illinois $OI at a loss.  The stock developed poor fundamentals and then broke down technically and I just missed getting out last year.  Lesson learned.  We added to our K12 $LRN position and Corning $GLW long option position while adding newcomer Google $GOOG to the DWCM fund.

The Week Ahead
The upcoming week is light on the economic data front but as we have already discussed trading could get ugly on Monday depending upon your perspective with the carryover from the disappointing jobs report.  CPI and the Consumer Sentiment results are likely to influence the equity markets at week's end.

• Mon - N/A
• Tue -  NFIB Small Business Optimism Index
• Wed -  Import and Export Prices,  EIA Petroleum Status Report,  Beige Book
• Thu -  Producer Price Index
• Fri -  Consumer Price Index,  Consumer Sentiment

DreamWorks Capital Management Updates

The prior week ending March 31 marked our first year in managing the DWCM portfolio.  Despite all of the volatility within the equity markets we were able to weather the storm and in our first year turn in a stellar performance up 17.9%.  Again we bested all 4 major markets and even doubled the Dow Jones Industrial Average $INDU and S&P 500 $SPX.


While we have been managing the fund during this first year we have aimed to earn your confidence in us a professional investment manager.  Remember one of our major goals here at DreamWorks Capital Management is to launch our own mutual fund.  If this is something that you would be interested in as an investor you can reach out to us at pfenner@dwcmllc.com.


I will begin to post regular updates as to the status of where we are at in regards to an actual fund launch.  From research that I have done, it will typically take about $7m to $10m to get a fund off the ground in order to be sustainable.


Have a great week!