Robert Drach's "Basic Timing" Model Portfolio
Bob Drach publishes his daily commentary and display portfolio to illustrate the "market timing" method of investing. (To learn more about Bob Drach, read this short biography.)Drach's Daily Commentary
July 1, 2009
Basic Timing
Daily commentary, current portfolio structure and history follow.
Please direct questions and comments to:
Drach Market Research
2910 Kerry Forest Parkway D4-210
Tallahassee FL 32309
Tel.: (850) 576-2680
E-Mail: DrachMkt@aol.com
Model Portfolio Changes: Sold Oshkosh (OSK) 18.43.
Major movements (+ or - one point or more among holdings): Oshkosh +3.89 (position sold into the strength as noted above/below).
On light volume, the month and quarter began with a solid positive session for this portfolio model, broadly based measures and the most popular averages: Dow Industrial +57.06, S&P 500 +4.01, Nasdaq Composite +10.68.
Volume will likely again be light during tomorrow's pre-holiday trading, the day's direction probably determined by announcement (scheduled for 8:30 AM Eastern) of the June unemployment rate and whether it is above or below the analytical consensus 9.6%.
Entering this week, the combination of late quarterly window dressing and holiday shortened trading favored relatively listless trading patterns with a positive bias. So far, the net change in the Dow has only been +62 points.
However this week settles, next week will likely involve choppy pricing as media/analytical attention will focus on early 2nd quarter earnings reports to gain a sense of what to expect from the large amount to follow. Because most earnings estimates are wrong (it is a very difficult task), there are always surprises with quick market reaction.
The longer term outlook is firmly positive because of the massive amount of money that is in the process of being injected into the economy by stimulus actions, both Federal Reserve and legislated. There will be wiggles along the way and an eventual productivity vs. inflation division, but the core element (additional money supply) has been created and on its way.
This portfolio was pleasantly surprised today by the upward spike in Oshkosh (OSK) following its procurement of a large contract for armored vehicles to be used in the Afghanistan war. The portfolio’s OSK position was sold into the strength, profit captured and proceeds applied to cash reserve.
Today’s sale brings the total number of concluded positions to 395 of which 354 (89%) have been profitable.
The sale also boosts cash reserve, perking the portfolio’s attention to the possibility of buying a position tomorrow (Thursday).
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Portfolio model initiated 5/5/95, archived and marked to market daily.
Initial S&P 500 level 520.12, initial portfolio value $520,120.00
Current portfolio value $1,073,461.00, gain 106.39%.
These results are reflective as to capital capture and market price of current holdings, itemized below. They do not include cash dividends, interest earned on cash balances, transaction costs, or anything else.
Current Stock vs. Cash Allocation
$1,005,218.65 (93.64%) stock. $68,242.35 (6.36%) cash equivalents.
Summary of Closed Positions
| Total Positions | 395 | Average Position | |
| Profit | 353 (89.62%) | Percentage | + 7.18% |
| Loss | 41 (10.38%) | Days Held | 207 |
| Even | 0 ( 0.00%) | Annualized | + 12.66% |
Relative performance vs. S&P 500 since initiation (5/5/95)
| This Portfolio Model | +106% |
| S&P 500 | +77% |
