What the hell is my problem?

I can’t find time to write a simple entry in this blog for 8 months while taking on a new job, getting married, going on a honeymoon and moving from the East to West coast? Gosh!

Well, that’s about to change. [incredulous looks…] A new life on a new coast means new ways. I’m using the new change in my life the way an obese smoker uses New Year’s Day to get a gym membership. I will be a actively contributing member to this blog and the group I help to found. Ok, I said it. Now let’s put it behind us and go to the one topic that would be best to return to after so much time: the status of the Uberman’s Portfolio.

I have to admit that part of the reason I’ve been so out of touch is that I’ve stopped paying enough attention to the market as a whole since my money is tied up in the portfolio. It requires a very specific focus and not much outside of that. But my interest in all things markets keeps calling. I digress.

Uberman?s Portfolio Equity Chart 2007.06.25

Let me just say, this is fun investing. Never underestimate the fun of making money. The blue line is equity and the pink line is the interest component of the equity. This represents reinvesting profits at 7.5:1 leverage. Any given investor in the portfolio might use leverage higher or lower but for the sake of illustration I had to pick a representative number.

That’s the good news. The bad news is that the blue line is diverging from the pink. It’s not supposed to. This can only mean one thing in my book: possible bubble in the carry. Of course, that’s not really news. Everyone knows there is a party going on in the carry trade (and we all should be skeptical when everyone knows something). So on that note, I’ll say that I’ll be following up with more analysis about the existence or nature of such a bubble and what it could mean.

Ah, it’s good to be back.