March 23, 2012

Here We Go Again

Well, I've fallen flat on my commitment to post more often this year.  All I can do now is try to improve going forward.

So where do I stand right now?  By sector:

Tech 17.7%
Gold 6.2% (been taking a beating here, but staying put)
Telecom 10.1%
Consumer Staples 16.2% (higher than I'd like)
Energy 6.2% (would like to get longer as oil has dropped somewhat)
Industrials 5.1%
Materials 6.8%
Health Care 0.5%
Financials 6.7%
Trading 0.6% (very short-term plays and hedges)
Cash 24%

However, I consider that somewhat misleading.  My positions are made up of a combination of common stock, calls, and spreads.  So in reality what looks like a very small weighting may be much higher relative to the risk I'm taking in that position.  I haven't figured out the best way to measure that yet, but what I'm trying is looking at the risk as the current market price relative to my stops.  Pictured that way, I get this:

Tech 5.2% (most of this is AAPL, and at this point my stops are above entry point)
Gold -0.4% (all stops above entry point)
Telecom 15.1%
Consumer Staples 29.3% (this concerns me when I view it this way)
Energy 15.2%
Industrials 16.1%
Materials 5.9%
Health Care 1.1%
Financials 8.9%
Trading 3.7%
Cash 0% (no risk of loss, but yes there is an opportunity cost)

Still not perfect, but at least it gives me another way to view my weightings.  For example, it makes me think twice about adding to energy and industrials when I view the risk, and then compare that to a larger weighting in financials but a much smaller relative risk.  It's a work in progress.