Friday, September 30, 2005


Results for September

Thanks to a nice move in GV, my portfolio gained almost 1 percent today. For the week, I came out $10,254 ahead (1.8 percent), outperforming the S&P 500 (up 1.1 percent), but roughly in line with the NASDAQ (up 1.6 percent) and the Russell 2000 (Up 1.9 percent). For September, my portfolio gained 5.6 percent, handily outperforming the major indices. September also marks the fourteenth month in a row that I have outperformed the S&P 500).

Okay, enough bragging; on to more relevant issues. Thank you to all who emailed me and posted a comment about what industries to watch in 2006. I received a range of views, but there seems to be a consensus that infrastructure stocks will tend to do well in 2006. I agree with this thesis. Refinery capacity is very low in the United States. The country's network of roads and bridges is lacking and needs heavy investment. The power grid is still antiquated and will require billions of dollars in upgrades. People also noted that homeland security will do well. I agree, and have already positioned myself to benefit from that (MACE, VII). Health care will also continue to be an important theme, and biotechnology should outperform.

As we look towards 2006, I will try to complement may bottoms up approach with a top down approach that overweighs my portfolio in sectors that are doing well and are poised for outperformance. Like many of you, I am rather embarrassed that I almost completely missed out on the multiyear rallies that we have seen in energy and commodities and until recently, housing. I will endeavor not to make that mistake again!

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