A very preliminary—but fast, I think you have to admit—report on the second quarter performance of my Jubak’s Picks portfolio.
The portfolio showed a negative total return—that is I lost money even when you include dividends—of 8.4% for the quarter that began on April 1 and ended on June 30.
That was better than the negative total return—yes, I’m counting dividends here too—of 11.4% for the Standard & Poor’s 500 index for the quarter.
That relatively better performance—or actually relatively less bad—helped close the gap between Jubak’s Picks and the indexes I use as performance benchmark.
If you remember last quarter’s performance report—and you should since I didn’t managed to post my first quarter performance report until yesterday, June 30—Jubak’s Picks badly lagged the indexes in the first quarter. My portfolio managed to scratch out a return of just 0.7% for the quarter. The S&P 500 index, in contrast, returned 5.4% for the first quarter of the year.
With everybody taking a beating in the stock market decline from the April 23 2010 high on the S&P 500, but with Jubak’s Picks taking a little bit less of a beating, this quarter’s performance closed the gap from 4.7 percentage points after the first quarter to 2.4 percentage points after the first six months of what is so far, a discouragingly tough 2010.
For the year to date, the Jubak’s Picks portfolio shows a negative total return of 9.1%. That compares to a negative total return of 6.7% for the S&P 500.
Maybe more important for the year ahead—although limiting losses is always important—I ended the second quarter with the portfolio 34% in cash. During the quarter I made only five buys (it would have been better in retrospect not to have made any, of course) and a total of 12 sells.
That gives me lots of cash to deploy if I see signs that stocks are ready to rally. However, I don’t see any signs of that at the moment.
I think we’ve got a long, grinding summer ahead of us. And I will be looking to sell a stock or two on any significant bounce.
But I don’t think the global economy is as bad over the long term as investors fear at the moment. Over the next six months or so I believe I’ll be glad to have a hunk of cash ready to buy.
At least that’s the theory. And in the meantime, that cash position is a decent insurance policy.
I’ll update this report with more detail and some longer-term numbers after the Fourth of July weekend.