Markets Bounce, Your Portfolio Soars

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

Global stock markets bounced strongly during the past week. The Dow Jones was up 1.05%, the S&P 500 rose 1.47% and the NASDAQ leapt 1.60%. The MCSI Emerging Markets Index also recovered strongly with a gain of 2.54%.

Big gainers in your Alpha Investor Letter portfolio included Actavis plc (ACT), which gained 6.92%; Skyworks Solutions Inc. (SWKS), which jumped 6.70%; the Market Vectors Biotech ETF (BBH), which gained 4.06%; the iShares Currency Hedged MSCI Germany (HEWG), which rose 4.02%; and Markel Corp. (MKL), which powered up 3.92%.

The following five positions all hit a new 52-week highs: Markel Corp. (MKL), PowerShares DB US Dollar Bullish ETF (UUP), Skyworks Solutions Inc. (SWKS), Actavis plc (ACT) and Market Vectors Biotech ETF (BBH).

The Guggenheim Spin-Off (CSD) rose back above its 50-day moving average and is back to a BUY.

Overall, it was a very strong week for your Alpha Investor Letter portfolio. Although market sentiment dipped over the past week, the market had become oversold on a short-term basis and was due for a bounce.

A couple of positions stand out. Skyworks Solutions Inc. (SWKS) jumped another 6.70% to not only hit another 52-week high but to push its total gain to 100.23% as of last night’s close. That means you doubled your money in this position in exactly five months.

The biotech sector also continues to be on a tear, with Ireland’s Actavis plc (ACT) gaining 6.92% and Market Vectors Biotech ETF (BBH) jumping 4.06%, both hitting new 52-week highs.

I also made your holding in the iShares Currency Hedged MSCI Germany (HEWG) — which gained 4.02% last week — the subject of yesterday’s issue of The Global Guru. As you know, this gives exposure to the strongest economy in the European bloc while hedging out the decline of the euro.

Finally, the relentless rise of the U.S. dollar continues, as reflected in your gains in the PowerShares DB US Dollar Bullish ETF (UUP), which is now up 16.11% just since October. The dollar’s remarkable gains are now hitting the headlines, which suggests to me that its relentless rise will soon pause for breath.

That will be good news for unhedged global positions like the Vanguard Global ex-US Real Estate ETF (VNQI), the Cambria Global Value ETF (GVAL), ICICI Bank Ltd. (IBN) and iShares MSCI Philippines (EPHE).

Portfolio Update

iShares S&P Global Timber & Forestry Index (WOOD) gained 1.69% last week. The housing market typically sees a seasonal uptick in the spring. Folks who have stayed put during the cold winter tend to make the move to new housing in the coming months, and this usually pushes lumber prices higher as home builders build as soon as weather permits. WOOD is just under its 50-day moving average (MA) and is a HOLD.

Global X Guru Index ETF (GURU) added 1.47%. GURU weathered the recent market turmoil quite well as it remained relatively flat compared to the significant dips in the mainstream indexes. GURU is at the 200-day MA and is well-positioned for further gains. GURU is also above its 50-day MA and is a BUY.

Vanguard Russell 2000 Index ETF (VTWO) rose 2.74% last week. Like GURU, small caps proved quite resilient in recent weeks. In fact, VTWO is already back to just pennies below the 52-week high it fell from only two weeks ago. This is a good sign of strength to the upside. VTWO is a BUY.

Markel Corp. (MKL) powered 3.92% higher over the past five trading days and hit a new 52-week high. MKL’s short interest recently dipped 1.3% as the number of traders betting against the stock fell. The number of shares sold short is a low 1.80% of the total shares currently available for trading. I have no idea why anyone would bet against the Baby Berkshire, but their numbers are falling. MKL is a BUY.

Google Inc. (GOOGL) closed the week flat, giving back just 0.40%. Although Google pulled back slightly the week prior, this stock held its position at the 200-day MA this week to consolidate and stabilize. This action typically signals that a stock is finding solid ground and readying for steady gains. GOOGL is a BUY.

iShares MSCI Philippines (EPHE) dipped 1.53% for its first week in your portfolio. This was the latest recommendation in my most recent Alpha Investor Letter newsletter and the Asian market best-positioned for gains in 2015. The Philippines market has been a consistent winner for several years now and I except further gains. EPHE is a BUY.

Newly Updated Special Report

As a courtesy, I invite you to view the newly updated version of The Top 12 Stocks for 2015, which features three of my top investment recommendations from the recent Orlando MoneyShow, as well as bonus picks from each of my fellow investment newsletter editors at Eagle. This report and others are available FREE on my website to you.

Nicholas Vardy

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