August 2022, Chicken Litte Portfolio Performance

Chicken Little is focused on interest rates. Financial headlines highlight the recent rapid increase in rates. However, inflation-adjusted, real rates, remain firmly negative. That means real rates have to go higher, much higher. Higher real interest rates ahead mean almost all asset prices have further to fall (you ain't seen nothing yet).

Fed Chair Powell: Rates are going higher

August 2022 performance
The Dow Jones Industrial Average lost 3.72% in August 2022 while the Chicken Little portfolio lost 1.56%. Year to date, Chicken Little has lost 3.40%, while the Dow has lost 12.05%

August 2022YTD 2022
Chicken Little-1.56%-3.40%
Dow Jones Industrials-3.72%-12.05%

Financial markets have been on a roller coaster ride. The first six months of 2022 saw big drops, July had a huge rally, and in August 2022 most risky assets had significant declines. 

Year to date performance is a sea of red with crypto the biggest loser and gold the best performer (while still down on the year). 

AssetSymbolAugust 2022YTD 2022
Dow Jones IndustrialsDIA-3.72%-12.05%
Non-US StocksEFA-5.98%-19.68%
Emerging Market StocksEEM-1.31%-18.54%
US Long-Term BondsTLT-4.33%-23.53%

September 2022 portfolio position
The Chicken Little Portfolio remains prepared for financial disaster. The portfolio was stopped out of the short stock position earlier in the year, and then restarted a new short position in August (see: Chicken Little gone crazy). 

How do I feel about losing money this year and going into and out of a short position? Bad, is the short answer. However, the longer answer is that every asset is down this year so relative performance is good. Additionally, Gordon Gekko said, stay liquid and, "if you want a friend, get a dog." Markets are tough. Making money is tough, etc. 

September 1, 2022, Dow: 31,400

Chicken LittleDow Jones Industrials
2022 (through August)-3.40%-12.05%
2015 (April through Dec)-2.49%-0.27%
since inception (3/31/15)21.13%106.30%

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