December 2018 Chicken Little Portfolio Performance

On October 8, 2018, I wrote "We sit less than 2% from an all-time high in the Dow, priced for perfection on the precipice of ruin." A modest ruin followed this prescient warning, and the Chicken Little portfolio was positioned correctly to make money from the decline. 

Risk assets plummeted in late 2018

December 2018 performance

In December 2018, the Chicken Little Portfolio gained 3.27% while the Dow lost 8.35%For the full year, the Chicken Little gained 1.27% while the Dow (including dividends) lost 3.63% 

Dec 20182018
Full Year
Chicken Little3.27%1.27%
Dow Jones Industrials-8.35%-3.63%

December 2018 was a 'flight to safety' month. All risky assets from stocks to junk bonds to crypto currencies had large declines. The only winners with US Treasury Bonds and gold.

2018 was a year where all risky assets went down.  It was a challenging year not to lose money. 

Chicken Little was perfectly positioned for the collapse in Q4 by being short US stocks, short non-US stocks, long Treasuries and long gold. 

AssetSymbolDec 20182018
Full Year
Q4 2018
Dow Jones IndustrialsDIA-8.35%-3.63%-11.13%
Non-US StocksEFA-5.23%-13.57%-12.36%
Emerging Market StocksEEM-3.47%-15.25%-7.58%
US Long-Term BondsTLT5.69%-1.50%4.68%

January 2019 portfolio positions

Chicken Little remains prepared for a deflationary depression by being long US Treasuries with a good amount of cash. 

As we enter 2019, Chicken Little has temporarily moved to the equity sidelines by being long US stocks and short Non-US stocks. Stepping to the sidelines means that the portfolio is not positioned to make money on further declines in equity markets in early January 2019. Chicken Little still believes the sky is falling, but perhaps not in the very beginning of 2019. 

Previous month's report                           Subsequent Month's report

Chicken LittleDow Jones Industrials
2015 (April through Dec)-2.49%-0.27%
since inception (3/31/15)1.27%42.49%

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