Pedge Fund Performance 200905

Just a quick post to relate the performance of PedgeFund for the month of May 2009. April 2009 returns are available here.

Pedge Fund USD
May performance: +31.49% (gross, approx)

Very good month in May. The big rebound in global equities has been missed in this portfolio but thanks to the big rebound in commodities prices, my commodity related stocks performed extremely well.
  • Major gains on oil and natural gas related equity positions
  • Major gains on gold and silver
  • Major gains on short USD/long EUR
  • Some gains on short Long-Bond
  • Some losses on short GBP/long EUR
  • Major losses on PUTs on the US markets
Some quick comments:

I have had a non-negligible stake in PUTs on the US equity markets and have made an almost 100% loss on them. I am remember a few years ago reading Jim Rogers say that he never buys options because 80 or 90% of them ends worthless. I would disagree with him on this one! I am happy to have bought this options, because they insured my portfolio for about 4 months. If I had shorted the markets instead of buying these options, I would have made major losses on this portfolio instead of making big gains.

My opinion on options is the following: Options are very good deals when you are very good at timing (big gains!) and also when you are completely WRONG (limited losses)! This had previously happened to me about 18th months ago, when I had bought options on some European companies, thinking its shares should rise a lot and not be affected by the US subprime collapse. Well, the shares actually collapsed to about 40% less than the strike of my calls! So I couldn't be more WRONG on the short term ! Should I have bought the shares instead of the options, I would have lost about 4 times more money than on the options.

June might be a tough month, as I have now started to short the equity markets. Should I be wrong, losses might hurt...

HFR Macro Index return in May 2009 was: +3.01%
S&P 500 return in May 2009 was: +5.59%

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