Investor's (H)Edge Portfolio: FCS and GMCR -- Hold 'em or Fold 'em?
The market has had yet another strong week, reaching new 3-1/2 year highs. Some of that can be understood by the very strong housing numbers that have come out over the past week, as well as the better-than-expected reports for consumer confidence and durable goods. Yesterday’s FOMC meeting held no surprises; the announcement that nothing is planned to follow QE 2 was expected, and Chairman Bernanke’s unusual request for a press conference after the meeting was a big yawn.
There was some disappointing economic news today. Initial jobless claims came in higher for the second consecutive week, jumping to 429,000, which is well above the expected 390,000. GDP was well below last quarter, though only slightly below the expected number for this quarter. Nevertheless, the market continues to roll merrily along, shrugging off these disappointments, along with S&P’s warnings about U.S. debt, the widespread tensions in the Middle East, and the ongoing problems from the disaster in Japan.
I can only attribute it to the generally favorable corporate earnings for Quarter 2 (although there have been more disappointments than I expected) and the fact that, for most investors, the equity markets are the only real game in town.
Our portfolio is up slightly for the week, trailing the S&P 500 slightly during its bullish surge, but the point of a balanced long/short portfolio is insurance against the market’s down days. We never know when those days will come or how dramatic they’ll be. That’s what insurance is all about. Nevertheless, only four months into the year, our portfolio is up a respectable +7% -- our long positions, since inception, are up +124%.
Portfolio Review
This week we are reviewing long position Fairchild Semiconductor International, Inc. (NYSE: FCS) and short position Green Mountain Coffee Roasters, Inc. (Nasdaq: GMCR). We are . . .
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Full disclosure: The author does not personally hold any of the stocks mentioned in this week’s Investor’s (H)Edge.
Disclaimer: This newsletter is published solely for informational purposes and is not to be construed as advice or a recommendation to specific individuals. Individuals should take into account their own financial circumstances in acting on any stock selection made by Sabrient. Sabrient makes no representations that the techniques used in these reports will result in or guarantee profits in trading. Trading involves risk, including possible loss of principal and other losses, and past performance is no indication of future results.