March 2013 Review. Portfolio up 3.3%, 13.6% ytd.

The tenth positive month in a row for the FTSE-All Share (Total Return) Index; it was up 1.4% during March and 10.3% so far this year. The S&P 500 Index closed on Thursday at an all-time high of 1569.18, five points above its previous closing high set on the 9th October 2007. The JIC portfolio increased by 3.3% during March and 13.6% for the quarter. Since inception on January 1st last year the portfolio has returned +37.6%.

The stars of the show during March were Dixons +24%, Staffline+16.7%, Regenersis +15.5%, St.Ives +12.5%, NetPlayTV +12.3% and Taylor Wimpey +12.1%. The duds were Quindell (again!) -22.2% (thank goodness I banked some profits), Laird -12.3% and Agriterra -11.3%. During the quarter JIC benefited from exceptional performances from Globo +100%, easyJet +41%, Taylor Wimpey +38% and Intermediate Capital + 33%. Just Quindell -38% and Agriterra -18% were really disappointing.

Where to from here? The US is clearly the main driving force with a reasonable economic recovery underway. The fact that the US market closed at an all-time high on Friday is not in itself a reason to be massively positive, after all in 2007 when it hit a new high in May it only rose another 2.5% before the big drop to the March 2009 lows! Hopefully this time it will be a little different being at an earlier stage in the recovery and with the Federal Reserve continuing to provide massive monetary stimulus.

Having been fully invested since last May, I have in recent weeks raised some cash, (c.15%) and if markets push on will probably do some more. I want to be in a position to take advantage of a “shake-out” when it comes. On the stock front I am watching Quindell closely ahead of results in May. On consensus earnings forecasts for 2013 it is now valued at 4.4x. I think this is getting a little silly!

Big mistake of the quarter; why did I just stand by and watch as the Nikkei 225 Index rose 20% and is now up some 45% since mid-October?

www.JohnsInvestmentChronicle.com