The New Bull Market

Portfolio Breakdown:
KFN - 87.5%
YRI - 3.3%
BAC - 3.8%
PRGN - 18.8%
APP - 8.0%
JPM - (4.6%)
BWR - 1.8%
CAD Cash - (0.5%)
USD Cash - (18.1%)

Portfolio Performance:
Return Since Last Update - 22.58%
Return Since Inception - 119.03%
S&P 500 - 1003.65
S&P 500 Return (June 30) - 9.22%

USD/CAD - 1.0988

The Prior Week of Trading:
I continued to move in and out of my BAC/JPM pair trade this week with flat results. Over the longer term I am confident in BAC's ability to outperform its peers relative to its current price. APP continues to be a hold in my portfolio, but would likely be trimmed if we experience a significant market correction predicated on fears of a weak consumer and US economy. Continuing on the retail front I am looking at TRLG as a possible buy in the framework of an optimistic econmic scenario; TRLG has had solid earnings even during the recent recession as they have managed their balance sheet and most importantly, offered a product that consumers desire. I would look to enter into TRLG in the $19 range, ceteris peribus.

PRGN has traded lower following a very upbeat earnings release moving from $4.61 on Aug. 11 to close at $4.21 on Aug. 14 (9% drop). Adjusted EPS for the quarter came in at 0.51 making the ttm earnings 2.25 (P/E - 1.87), it's current P/B is 0.26, P/S - 0.66, P/FCF - 10.12 is all well below the industry average. Of course the ultimate fate of any shipper is tied directly to the Baltic Dry Index which has suffered over the last couple months; after bottoming out in the 600's in 2008, the BDI recovered to over 4000 in early June but now sits at around 2750. A continued improvement in the global economy means improvement in global trade and a demand for commodities, this scenario would prove to be beneficial for PRGN.

KFN has obviously been a major driver of my portfolio's success to date; and I think it will continue to perform in the future. My price target of $4-5 remains, although I dont believe we will reach this level until the next earnings release or the market continues to move appreciably up in value. I am content to hold until the next earnings release and will re-evaluate the price target and situation at that time.