Terry’s Tips Track Record Update – June 22, 2009

Results for the June Expiration Month: Our composite total portfolio value made a small gain for the expiration month.  It would have been a great month except for our only portfolio that uses a single stock rather than an ETF as the underlying – in the last week, the stock fell 16% and crushed the portfolio value.  It was a reminder of the greater risk that is involved whenever a single stock is used rather than an ETF made up of a large number of companies.

The 3 portfolios that use SPY as the underlying made an average gain of 7.2% while the stock increased by 3.8%.  The bearish portfolio did poorly with the stock higher.

Here are the results for the last few months for our two portfolios that use ETFs and LEAPS as the long positions:

Month	Change in SPY	% Change in Portfolio	Comments
April-09	+7.5%	+15.5%	First month results usually are 3% lower due to the bid-asked-spread-penalty of a new portfolio.
May-09	+1.9%	-7.6%	Excessive volatility, first a drop and then a 12% gain caused both upside and downside adjustments.
June-09	+3.8%	+9.0%	Volatility fell nicely (VIX under 30 for first time in 9 months).
Cumulative Results	+13.2%	+16.2%	Annualized gain for 3 months = 68%

Marco Polo Expiration Month Results

Month	Change in XLF	% Change in Portfolio	Comments
March-09	+0.7%	-5.6%	First month results usually are 3% lower due to the bid-asked-spread-penalty of a new portfolio. Mid-month volatility also hurt. XLF fell nearly 9% on the first day causing downside adjustments, and then rallied back.
April-09	+36.5%	+20.8%	Surge in stock required upside adjustments. Portfolio gain would have been similar if XLF had remained flat.
May-09	+3.8%	-10.9%	Excessive volatility, first a drop and then a 39% gain caused both upside and downside adjustments.
Jun-09	+4.4%	+10.8%	Volatility fell back to “normal” levels.
Cumulative Results	+45.4%	+10.8%	Annualized gain for 4 months = 33%

Note: For the most part, monthly results are more related to the percentage change in the underlying ETF (SPY or XLF) than they are the direction of the change. In the May expiration month, extreme mid-month volatility caused multiple adjustments and adverse results even though the net change in the ETF was moderate.

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Please check back on this Track Record page frequently. It will be updated on Monday following each monthly Friday expiration.

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