Posted by Davy Bui on June 2nd, 2008 in Enlightened-American Portfolio

Through the end of May 2008, our portfolio is up 16.6% compared to losses ranging from -2.3% for the Russell 2000 to -4.9% for the NASDAQ.  The story for the year continues to be commodity-based stocks.  While still bullish over the long term, I sold part of our positions in Penn West Energy Trust (PWE) and Agnico-Eagle (AEM) for gains for 34% and 100% respectively.  PWE, for reasons outlined elsewhere, and AEM, due to valuation.  Both stocks had been held long enough for favorable capital gains treatment.  Our put-selling operations have also gone well this year, with no position showing a loss and the American Capital Strategies position purposely opened at an effective price of $29.50 (note the transaction(s) are listed separately to reflect more accurately the returns for the position).

I continue to build up cash while waiting for the market to commit to one direction or another.  Common sense tells me that the Goldilocks II storyline (brief slowdown followed by a ramp-up) is rather improbable but who can know for sure?  I also wouldn’t be surprised by any sharp pullbacks in the commodity space but would view any such event as a buying opportunity.