Fund positions of 1.0% or greater can be found each week in the right margin of the blog, under the label cloud and recent comments areas; I highlight weekly the larger position changes.

Being a long only fund, via Marketocracy rules, the only hedges to the downside I have are cash or buying short ETFs. I cannot short individual equities.

To see historic weekly fund changes click here OR the label at the bottom of this entry entitled 'fund positions'.

Cash: 3.2% (vs 20.2% last week)
53 long bias: 86.5% (vs 64.6% last week)
9 short bias: 10.3% (vs 15.2% last week)

69 positions (vs 62 last week)
Additions: Ultra Financial (UYG), Canadian Solar (CSIQ), Walter Industries (WLT), LDK Solar (LDK), Fuel Systems Solutions (FSYS), Energy Conversion Devices (ENER), James River Coal (JRCC)
Removals: N/A

Top 10 positions = 28.2% of fund (vs 23.7% last week)
48 of the 69 positions are at least 1% of the fund's overall holdings (70%)

Major changes and weekly thoughts
Another tough week in the markets - we won't rehash the news stories because anyone reading the blog for more than a few weeks has seen it all predicted here. As we were warning throughout that "it can't get worse than this" and "the recovery begins 2nd half of 2008" rally of April/May, I had repeatedly typed it had all the scents of that September/October 2007 rally of the same ilk - except the buzzwords then were "The Federal Reserve will fix this - don't fight the Fed" (they fixed it all right), and "the kitchen sink quarter in financials is in". Remember, the pundits were not even acknowledging the chance of a recession at that point - that didn't happen in most major brokerage houses until December 2007. Humans are if nothing else, very repetitive animals and we saw the same hopeful behavior, and same results. In fact we have now seen 5 such "corrections" since last summer, all coming off the tail end of a "ever hopeful" period of the "worst is behind us". The only difficulty as an investor is knowing when the Kool Aid stops flowing... we were typing in September/October the market was missing the story and this rally was ridiculous just as we were typing in April/May the market was missing the story and this rally was ridiculous. But to sit on the sidelines chiding the market for rallying 10%+ for no good reason, means leaving a lot of money on the table. So as always we try to act as the adult in the corner, chiding the kids while they bathe in Kool Aid but trying to stay involved so we get the upside, but make sure we keep a level head and realize the party will end badly. And so it has. Again.

As I always like to say, it only matters when it matters. Frankly the economic news is very unchanged from what it was for much of the winter and spring - the only difference is the acknowledgement of the circumstances. Some months the deteriorating situation is acknowledged (and the market falls); some months it is not (the market rallies). Unfortunately for the buy and hold crowd, I have to say I believe this is going to be the pattern for quite a long while. I think housing will deteriorate quicker than most people assume (i.e. prices falling) and most of the current "activity" in the hardest hit markets are foreclosure sales - not true buyers/selling meeting. Once the sellers who still believe they will get 2006 prices face up to reality (much like stock market participants) I believe housing prices will have their swoon and it will be relatively sharp. And from there we can have the makings of a bottom - my hunch is late 2009 into early 2010. But everything in this market is levered to the beast that was the housing bubble so until we get stabilization in housing prices I have a hard time seeing a new bull market emerge. Now on top of that we have Federal Reserve stoked (not created, but stoked) commodity inflation which is a wildcard - the higher prices go, the longer our recovery. But I do look forward to the day we have a very boring blog where all I type all day are "everything is going well, malls booming, auto sales booming, housing flying off the shelf". It will be a lot less work on my end - unfortunately, I don't see that day happening for quite a few years. Uncle Alan Greenspan's bubbles have created inflated assets worldwide and we now are seeing the other side of that. Once the deflation is over, we can go about our normal business.

Despite taking some hits this week, I've been much happier with the fund performance on this go around (correction) than in previous episodes. Throughout June our global growth type of long positions continued to perform although we began liquidating them into the strength (too early in many cases) anticipating a week like this.