Happy New Year!

I've updated performance on the other page.  In December, my portfolio was down 1%.  Apple hurt as did some previous winners.  I attribute some of the performance to profit taking ahead of the expected tax rate increase.  I was up 5.18% for the year with extremely low volatility so I am happy with that result.  Based on media reports that would have put me in the top half of hedge fund managers, but I didn't have to pay big fees ;)

Now that we have passed that particular episode stocks have gone up and government bonds have been blasted.  The stock move was somewhat predictable and was the reason I had taken my exposure up to greater than 25% (big for me).  The treasury bond move is a bit overdone in my opinion as we have still not shown any real signs of growth (or inflation).  I have added a bit to my bonds (TLT is now about 13% of my portfolio) and added a bit more to equity by buying SPY March 150 call options to give myself some added exposure if we get a rally.

I do expect a rally despite our governments best efforts at confusing the general population.  Earnings will be good driven by increased efficiency (productivity in government parlance) and that is what we are buying when we buy stocks - earnings and the dividends they can ultimately support.  Yes, we want top line revenue growth, but the reality is that our economy is still suffering from deflation attributable to globalization.  Ultimately this will be a great thing as the market for our goods and services becomes global.  Short term, we suffer from lower wages because we are the big dog.

Sprint (S) has had a nice run and this year should mark the close of the Softbank deal and we should earn a nice profit.  We may get an additional benefit if S manages to stop the bleeding of market share and takes advantage of it's improving network infrastructure.

MHN has had a mad rally and is now at a big premium again.  Again, the lack of liquidity makes it difficult to trade this stock.  I tend to buy more often than sell when things get weak or the discount becomes big then sell only a little bit when the premium is high.  I will be looking at this one closely to trim the position I added below $16.

AAPL I still think is cheap.

TLT is a buy I think as we will continue to be disappointed in our overall growth numbers.  In addition, if we ever do strike a deal to contain our runaway growth in debt, bonds will be a buy.

Loand (VVR and BKLN) are still good and high yield (JNK, HYG) will also have another good year I think as we muddle through and corps get leaner- and still pay their bills!

On the speculative front, I expect another buyout offer for BBY.  At $12 it looks like a decent buy.