The recent market rally prompted us to close out some positions in the Forbes Special Situation Survey. In the last few days, we pocketed gains of 38% in 2.5 months on Chicago Bridge & Iron (CBI) and 35% in 6 months on Goodrich Corp. (GR). In March, we closed out EnerSys (ENS) for a 123% gain in 4 months and Western Digital Corp. (WDC) for a 46% gain in 3 months. However, today, we took a 64% loss on Coventry Health Care (CVH) in 28 months. These sells have reduced the number of open positions in our recommended portfolio to 13.
According to the Hulbert Financial Digest, our recommended portfolio has gained 7.2% on an annualized basis (excluding dividends) over the past 3 years. That ranks us #4 overall out of 183 investment newsletters. Our 5-year record comes out to 10.1% on an annualized basis, good enough for #5 overall. Year-to-date, Hulbert has us showing a 16.1% gain.
One reason we have pared back our holdings is because we are somewhat skeptical of the recent rally. While things are getting worse at a slower rate, they are still getting worse. We believe there is more bad news to come. Investors may react by selling aggressively when that happens.
