May was about the worst month I can remember. Due primarily to Puda Coal (thanks PUDA), I ended up down about 8% in my primary Covestor model. This was the first monthly loss even in this model, and first monthly loss I’ve had in about 2 years.
To measure the impact of Puda Coal on the overall portfolio you simply need to look at the current position size. As you can see, my Covestor model lists the current position at under 5% of the portfolio.
Well, it started at 15%, which means that about 10% of the portfolio eroded due to this one position. And I lost how much for the month? Yep, without PUDA I would have eked out a small gain. Grrrr…
It’s hard to say what will happen with this now. PUDA may not be a complete loss. There are class-action suits being filed right and left, and the CEO has even feigned an offer to by out all of the stock for $12 a share (I paid about $10). For now, however, trading has been halted for almost two months, and we have no choice but to treat it as a loss and move on.
On the heels of that disaster I’ve been gradually working my way back to whole. Volatility has been rather light, so trades have been rare. You’ll see in the picture above, that we are completely in cash (aside from PUDA of course).
The market was hammered hard yesterday, following several courses of bad news in jobs and manufacturing reports. Simultaneously, the VIX spiked more than 2 points. If volatility hangs around, I expect to be back on the gain train in June.
Good Trading…
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