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Strategies & Market Trends : Roger's 1997 Short Picks
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To: Jon Tara who wrote (8738)12/22/1997 12:30:00 PM
From: Terry  Read Replies (1) of 9285
 
>>>>>>>>>>>Jon Tara said:

Does Tice really see his benchmark as the inverse of the S&P? Does he really think he's beaten the appropriate benchmark by losing 16%?

Prudent bear is NOT a "short fund".

The stated goal of the fund is to make money in BOTH up and down markets. He hasn't met that goal. The fund can go from 50% long to 100% short.

Seems to me that he mis-judged what kinda market we were in, for a couple of years. ;)

>>>>>>>>>>

The stated goal is to be short when he thinks the market is overvalued and long when it is undervalued. The markets degree of over or undervaluation is defined in terms of the dividend yield on the S&P 500. Don't think for a minute that Tice is shifting his positions around on a daily basis to focus net long one day and net short the next. That would be ludicrous. He has a long term idea of where he feels valuations are and at the current time, he feels valuations are too high.

By the way, the fund can be 100% long or short. However, it will be net short if the dividend yield is below 3%. That should make his opinion of the market an easy read. If you disagree with using that indicator go to his site and read why he chose it.

While the Prudent Bear fund is not a short only fund. They have been 70% short and 10-20% long for quite some time. Also, realize the strategic reason for holding such an instrument in a portfolio.

If you are concerned about having a different opinion than Tice long-term, then jump into the fund when the markets are getting jittery. When the markets have tanked, the Prudent Bear fund has outperformed on the upside.
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