EVALS Q1 2009 Update

I continue to receive questions about how EVALS has been doing and what some of the positions it has taken are, so I have decided that henceforth, I will publish a quarterly update in this space with some brief comments about performance.

Looking back at 2008, the portfolio tracked slightly ahead of the benchmark S&P 500 index for all except the week leading up to the November 21^st bottom. During that week, the portfolio had a decidedly bullish lean; when the 741 low was put in, the damage to the likes of QLD and URE was such that EVALS was not able to make up that performance gap by the end of the year. The result was that performance for 2008 lagged the SPX by 4.27%.

EVALS had an aggressive bullish position at the start of 2009 and handily beat the SPX for the first half of January, though most of the performance gap dissipated by the end of the month. February was a similar story of the first and second half of the month; this time EVALS slipped below the SPX by the time the month was over.

The beginning of March saw EVALS extremely bullish, with leveraged 3x and 2x funds. When the markets bottomed on March 6^th, EVALS took off like a rocket. In the second half of the month, EVALS took some profits in financials, small caps, emerging markets and China, most of those coming at the open on March 24^th. In the past week or so, EVALS has been weighted most heavily in long commodities positions and has managed to build upon gains from earlier in the month.

As the chart below shows, during January and February, EVALS had a +1.33% and -2.78% performance relative to the SPX. During the month of March, EVALS was 26.22% better than the SPX. With the SPX down more than 11% so far in 2009, I am pleased that EVALS is up more than 7% and also that in the 7+ months since EVALS was launched, it is showing a 9.23% advantage over the SPX.

In the event the particulars are not obvious to the reader, EVALS is a very aggressive trading approach that does not mind striking out from time to time, provided the home runs provide more than adequate compensation for the risks. For the first 7+ months, this strategy has been successful in aggregate, but not without some bumps along the way.