OP Newsletter: Outperformance (Apr’08, +4.9%)

An interesting week for the OPNewsletter as it grew from +1.3% last week to +4.9% this week resulting in +3.6% gains for the week while Dow, S&P, Russell and NASDAQ finished -1.2%, -1.1%, 0.3%, and 0.1% respectively. OPN has invested 66.34% of capital across 4 portfolios. 3 portfolios are positive and one is flat and these are well positioned for the next week.

With only one trading day left in JFM’08 quarter, the Dow, S&P and NASDAQ are down nearly -7.9%, -10.4%, and -14.7%, respectively.

For the week ahead, here is an interesting piece that I found on Bloommberg. Treasury Secretary Henry Paulson is likely to call for the creation of new regulatory agencies with broad powers over lending. “Fed ought to have greater sway over Wall Street firms now overseen by the SEC” said Paulson on Mar 26 according to the Bloomberg News. His speech begins at 10 a.m. in Washington on Mar 31. Markets may react to what he has to say.

The recommendations urge the formation of a “Prudential Financial Regulator” to oversee financial institutions that have an explicit government guarantee such as deposit insurance. The Treasury calls for a “Business Conduct Regulator” to monitor disclosures, business practices, chartering and licensing. It also suggests a “Corporate Finance Regulator” with “responsibilities for general issues related to corporate oversight in public securities markets.”

Read more for full news.

Here is another interesting read from Hussman Funds by William Hester on How do the economy and the market behave in an “average” recession? William reviews several indicators insightfully that can provide clues where we are today.

There are two major economic data due next week. ISM mfg index on Tuesday and Employment situation on Friday and of course, earnings round will kick-off shortly.

Trade Carefully, Trade Profitably, OP



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2 responses to “OP Newsletter: Outperformance (Apr’08, +4.9%)”

  1. Bubs Avatar

    Hello OP! Just had a quick question about your service. What do you mean by 66.34% of capital invested across 4 portfolio’s?

  2. OptionPundit Avatar

    Bubs, Assume $10,000 as overall capital. Then $6,634 is invested in 4 different portfolios.

    What is portfolio? For instance, 1 RUT Iron Condor makes one portfolio, RUT double diagonal makes another portfolio..and so on. So overall the portfolio spread cost $6,634 which then OPN subscribers can scale-up to multiple spreads depending upon their own capital.

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