Master's Account Talk

[Master]

This past week was incredibly painful for some of us at the sidelines. (Cheers to you if you were inside). There are some of those weeks every year, but this one was particularly bad for us as it was considerable potential gain.

Last night (today), the market was closed in Japan for holiday. The EFA is looking down without the contribution of that economy, it's just speculation. I am looking for some short term risk (gain or loss). I am not changing my Fidelity portafolio as it is more costly to get in and out of the market, and I am looking for better entry into the market.

 

[Master]

I am still 100% invested in the I fund trying to recover losses from earlier this month, when I bought at $18.45. Today will be a good day.

TSP statements were posted earlier this morning. You can calculate the ACTUAL RETURNS by using the following simple formula:

(Change in account value)
(Initial balance + (Contributions/2))

This is because, on average, contributions were only working for your return during half of the time.

In my case, the 4th Quarter of 2005 was very helpful producing a +10.99% for my TSP account. Earlier in the year, I had a loss of -2.15% during 1st quarter, +2.50% for 2nd quarter and +2.47% for 3rd quarter with passive management. For my year, it was ... good.

 

[Master]

I made an IFT to 100% G from I before noon deadline. I expect to consolidate my gains from the past couple of months. Since March 8th, the I fund has NOT retreated. It has gone from 18.29 to 19.24, and today, I also expect to have a positive day for the I fund. This is due to the +1.74% gain of the Nikkei with a +0.68% valuation of the US dollar (vs Yen). The european market is mixed but close to flat with a -0.65% of the US dollar (vs Euro). I plan to re-enter the I fund very soon, as I do agree with Mr. Buffett assessment of the dollar.

 

[mlk_man]

Master, I believe Japan is closed today. I think you are looking at yesterday's price.

 

[Master]

You were correct. I was traveling and had internet access primarily via my PDA. It made me make an "OK" trade based on incorrect assumptions.

 

[Master]

IFT to 100% I before noon deadline.

 

[Master]

On 4/3, I got out of the I fund at 19.45. Today, when I took the decision to move back into the I fund, it was because:

- Long-term, the I fund, is our best bet against the decline of the American Economy that is being fueled beyond our means.
- the EFA ticker is droping at -0.73%, beyond the price where I sold.

Now, tomorrow we have three events that might push the I fund back up:

- The international trade report for Feb (4/12), which "primarily affect the value of the dollar in the foreign exchange market"
http://www.econoday.com/clients/basics/bloomberg/reports/US/EN/New_York/international_trade/year/2006/yearly/04/index.html
- The weekly gasoline inventory EAI report, which probably will temper the euphoria of oil stocks.
- Psychology - people need to invest their IRAs before tax deadline. The market appears to drop today. They will look at performance of mutual funds this past year, and many will choose some International exposure.

 

[Master]

Once again, I jumped into the I fund at least one day too early.

 

[Master]

Here we go again. I posted and did an IFT from 100% G to I. If the I fund drops more than 6 cents (from 20.04) today, I will be coming ahead of the I fund performance for that period.

I sold at 19.96, and transfer to G which paid a penny on Friday (point of equilibrium ~19.976).

 

[Master]

I was just looking at my recent returns for my TSP portafolio:

TSP YTD ===> +9.66% (updated prices from last M_M tracking spreadsheet - can be verified)
For comparison: G=1.43%; F=(-1.12%); C=5.17%; S=9.77%; I=14.38%; 20%each=5.93%
The main reason I underperformed the I-fund is that I missed the Jan 1-9 rally.

TSP since I started posting almost 6 months ago ===> +17.54% (11/05 to date - can be verified)
For comparison: G=2.26%; F=0.29%; C=9.62%; S=15.52%; I=21.94%; 20%each=9.92%


2005 actual TSP returns (from my statements) ===> +15.27% (can not be verified as I started posting until Nov.'05)

1st quarter 2006 actual TSP return ===> +4.58% as compared to +4.52% in M_M tracking spreadsheet.

 

[Master]

Last 3 months have been particularly good for me. Since Feb 1st, my TSP return is: +8.66%. (2/1 - 4/30/06). Particularly proud of outperforming the I-fund.

Comparisons (2/1-4/30):
G = +1.16%
F = -0.84%
C = +2.88%
S = +3.17%
I = +8.03%
20%each = 2.88%

YTD = +9.93% (1/1 - 4/30/06)

However, it is important to note that there are at least 12 TSPtalk members with better returns than I. Congrats!!!!

 

[vectorman]

Hi Master, for your YTD return above, did you use the formula that you put out before... (Change in account value ) divided by {Initial balance plus (Contributions divided by two)}

 

[Master]

For the return based on actual statements, I did. For the YTD, I used the tracking method from this website. The formula that you had presumes that contributions are spread equally during the period of observation.

The method used by Tom and mlk_man for tracking the principal is pretty accurate. The difference for 1st quarter between the actual return and the tracking method was only 0.06%, and that accounts for the effect from cost dollar averaging.

 

[Master]

I considering going briefly to S or G aiming to get a few extra cents out of I. I missed the deadline on Tuesday.

 

[Master]

IFT to 100% S before noon deadline.

 

[Master]

Well, gambling that S was going to do better than I today, let me down by 0.27%. I still was able to make 1.00%, so I'm still pretty happy.

 

[Master]

another gamble. investing 100% into F for a day or two.

Given that I still have about 79% of my assets in international funds (see my fidelity portafolio), this move is hedging a small pull back from the I fund. I think that we do not give enough credit to the Fed chairman. Despite his flaws and the situation that our economy, debt and trade deficits are, I think that he will defend a bit our currency.