Will Jobs Lead a Recovery?

Portfolio Breakdown:
APP - 3.5%
BAC - 15.6%
TBT - 17.2%
ITUB - 12.5%
AOB - 12.4%
COINU - 1.9%
TAMB - 30.1%
HOGS - 42.3%
SDX - 3.5%
OCNF - 3.7%
MBI - 20.6%
TRLG - 9.2%
CAD Cash - 5.7%
USD Cash - (80.5%)

Portfolio Performance:
Return Since Last Update - (10.49%)
Return Since Inception (June 30, 2009) - 155.39%
S&P 500 - 1073.87
S&P500 Return (June 30, 2009) - 16.86%

The Prior Week of Trading:
Another rough week for my portfolio as my high beta exposure has bitten me in the backside. Continuing concerns over sovereign debt risk in Greece has caused an unwinding of risky trades across the globe. The Euro as well as emerging market currencies have been sold off as investors look for safety in the US dollar, translating to declines in a broad range in commodities. The negative correlation between the US dollar and US Equity prices has been very strong as of late, although it is opposite to what the market has seen historically. I am betting on continuing strength in the US dollar (as I have for many months) as I believe the economic position of the US to be more stable than most other nations. However, I also believe the negative equity-dollar correlation to be an aberation rather than a change in the statistical norm. As the US economic recovery continues to outpace other countries and US corporate profits beat estimates, the equity markets should trend higher. I dont think we will repeat the gains seen since March 2009 in a similar timeframe, but do believe US indices to see a more modest 10-15% price gain in 2010.

Given my expectations and current market weakness, I have consolidated my portfolio to my favorite deep value names. I have significantly added to my HOGS position as factory utilization and production news continues to be positive for this company; as a growth stock poised to exploit favourable structural shifts in their demand base, I do not believe the forward P/E of 7.5 to be justified. I am still waiting for the earnings release from TAMB, but continue to believe in the long term success of the company. TAMB is currently priced for bancruptcy with large upside potential, the risk/reward ratio is too good to ignore. MBI, TBT, ITUB and TRLG continue to be core holdings in my portfolio, but I may considering lightening up on TBT for a short period of time given the current global appetite for an asset flight to quality (TBT is the ETF inverse of the Lehman 20+ yr bond index).