Looking for Opportunities

Portfolio Breakdown:
BAC - 2.9%
PRGN - 18.9%
APP - 2.1%
JPM - (3.7%)
BWR - 2.9%
TBT - 5.1%
CAD Cash - 32.0%
USD Cash - 39.8%

Portfolio Performance:
Return Since Last Update - 0.84%
Return Since Inception - 182.54%
S&P 500 - 1068.30
S&P 500 Return (June 30) - 16.26%

USD/CAD - 1.0696

The Prior Week of Trading:
Not much action this week for the portfolio; I have decided to take a wait and see approach. The market seems to be caught between a continuation of positive economic data and an environment that seems to be screaming "technically overbought". I am by no means a technician or chartist (believing more in efficient markets than obscure patterns on paper) but I do occasionally fall into the mean reversion trap. Valuations seem to be stretched given the fact that next quarters earnings season will most likely resemble the last; decent EPS performance stemming more from cost cutting rather than revenue growth. The market definitely chose to focus on the EPS surprises last quarter even though estimates were remarkably low; I think the stagnant revenue numbers and lack of forward looking guidance next season will be a wet blanket on a great many of the low quality stocks that have performed so well as of late. I would look to add quality names with a solid dividend and overseas revenue exposure (to take advantage of the low US dollar) to my portfolio to capitalize on this coming trend.

The one name I added to my portfolio this week is the TBT; an inverse ETF tracking the performance of 20+ year treasury securities. I will look to expand on this post at a later date further explaining my reasoning; the short version is that I expect the yield curve to steepen as inflationary expectations start to creep into the economy, while the Central Bank will choose to keep benchmark rates low for a considerable amount of time. Downside risks still remain to economic stability, but cost-push inflationary pressures coupled with an extreme easy money environment will undoubtedly produce higher rates in the future.