Mr. Sensitive

June 2, 2011

FSX May 2011 Review

Filed under: Uncategorized — lbej @ 09:14

May was not a strong month in the markets.  There was a lot of headline grousing about volatility in commodity prices, weakness in economic indicators, and sovereign debt drama (the U.S. included).  Really, though, stocks had run up nicely after struggling during the summer of 2010, and the sell-in-May-and-go-away imperative was in full effect this year as well.  Money managers like to act like that’s a silly adage with no real substance to it, but just because it sounds like a nursery rhyme doesn’t mean it’s not the stone cold truth.  If the fundamentals are negative—and they have been for years now—you need liquidity to prop up asset prices.  Mutual fund managers with investment mandates have to put their money somewhere, and so they will buy something even if they are long-term bearish on the market as a whole.  They will not buy, however, if they’re on vacation.  Here I’m talking about long-only mutual fund managers; hedge fund managers are a different sort of beast.  They can and will be net short if they’re negative on a market or a sector, and they don’t often take their collective finger off their collective trigger.  That means the long-onlys are on the beach all summer and the shorts are on the hunt.  Sell-in-May-and-go-away is a doofy-sounding maxim, but you go against it at your peril.

The Family Stock Index was down 0.6% in May, adding on to a 0.9% drop for April.  That said, we were down 5% for the month as recently as the 23rd, so the rally of the past week has been a furious one indeed.  We beat the major averages badly as a consequence, and the FSX has reestablished a lead of more than 200 bps over the S&P 500 for 2011.  Justin and Reagan turned in stellar performances for the month, the former being a sharp reversal of the prior months’ trend and the latter being the continuation of a powerful year-long bull run.  I did my part as well; by no means did I fuel the late-May rally, but I was kind enough to stop plummeting, at least for a couple weeks.  On a negative note, May was the first month of 2011 during which more FSX components fell than rose.  Even though last month’s decline (0.9%) was greater than this month’s (0.6%), decliners trumped advancers 14 to 9 this month after the advancers won in April 12-10 (with CATY unch).  The difference was that I was down 47% in April and no way was a marginally positive a-d line going to overcome that.  In contrast, the huge gains in Justin and Reagan did dilute the otherwise pervasive failure in May.  Here are the major movers for the month of May:

1.  Justin (WOLF) +39.9% (secret marriage?)

2.  Reagan (REGN) +17.6%

3.  Nicole B. (NI) +4.4% (SECRET MARRIAGE?)

4.  Mario the Elder (PBY) +3.6%

5.  Winston (HWD) +3.5%

18.  LULU -9.2%

19.  Brinkley (BCO) -9.9%

20.  Lucas (LEI) -12.0%

21.  Mario the Younger (SUP) -13.3%

22.  LEE -16.1%

23.  Zondro (ZRAN) -21.4%

On a related programming note, we will be in Charlotte for the comic convention Friday and Saturday and there will be no FSX Friday update this week.  I’ll probably get to it on Sunday, unless I don’t.

Name Ticker 5/31/2011 May Chg 2011 Chg
Brinkley BCO $29.75 -3.26 +2.87
Charlotte ICE $120.65 +0.30 +1.50
Dustin DST $50.27 +0.96 +5.92
Icarus FLOW $4.11 -0.20 +0.02
Jenny LEN $18.98 -0.01 +0.23
Justin WOLF $2.98 +0.85 +0.37
Katie CATY $16.30 -0.75 -0.40
Lee LEE $1.20 -0.23 -1.26
Lisa LSI $7.49 +0.16 +1.50
Lucas LEI $2.84 -0.39 +0.51
Lulu LULU $90.80 -9.25 +22.38
Marcus MCS $10.50 -0.59 -2.77
Mario T.E. PBY $14.20 +0.50 +0.77
Mario T.Y. SUP $21.91 -3.36 +0.69
Marisa MOLX $27.37 +0.37 +4.65
Nicole B. NI $20.30 +0.85 +2.68
Nicole L. COL $61.13 -1.97 +2.87
Reagan REGN $60.02 +8.98 +27.19
Ruby RBY $4.83 -0.35 -0.88
Wilson WILC $7.40 -0.09 +0.92
Winston HWD $17.66 +0.60 +5.96
Zero FRZ $3.08 -0.16 +0.33
Zondro ZRAN $8.23 -2.24 -0.57



    Comment by nicole — June 2, 2011 @ 13:27 | Reply

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