march10

For March 2010, our portfolio returned 9.99% compared to 5.88% for the S&P500. Our portfolio outperformed the S&P500 by 4.11%. For the first quarter 2010, we were up 8.81% Vs 4.87% for S&P500. Please note that this is a total return including cash positions, so we outperformed the S&p500 with around 15-20% in cash.

OSI Pharmaceuticals was the major portfolio mover with a gain of 60.86%. Astellas Pharma Inc made a tender offer to buy all OSIP shares at $52 per share. OSIP is currently trading at $59.55, which means the market thinks Astellas will have to pay more if they want to acquire OSIP. For us, OSIP is up 106% from our purchase price of $28.90.

LMI Aerospace Inc (LMIA) was up 46.41% in March. It is up 117% for us. OME, TRID, ACET and AIR were also up significantly with a gain of 34.66%, 17.57%, 15.49% and 9.44% respectively in March. However, Ameron International was down 8.68% in March. AMN is also our largest holding with about 8.2% of our total asset invested in it. Almost all other holdings were up about 3-4%.

Transactions

Sold CTIC at $0.62: As we mentioned in our last post, the FDA had pointed out some issues with CTIC’s phase III trail of pixantrone. The independent advisory panel unanimously said the data was not adequate. FDA usually follows what the panel recommends and seems like the chances of pixantrone being approved in very slim. Therefore, we  sold CTIC at $0.62 for a loss of 49.5%. Fortunately, CTIC was a small portion of our portfolio so it didn’t have a significant impact on our portfolio. The lesson learned (again) is not to get involved in speculation!

Sold XES at $30.50: We decided to sell the SPDR Oil and Gas ETF since the price of oil is now more than $80. We do not know what the price of oil will be in the future, but the ETF was getting overvalued for our taste. We sold it at $30.5 for a long-term gain of 74% not including the dividends that we received.

Our cash position has increased to 21.74% after those two transactions. It is good to come out ahead of the market with such a large position in cash when the market is going up. The cash position will give us a good buffer when the market goes down and we will have funds to invest if we find good opportunities.

Our partnership NAV for the month ending March, 2010 is $11.02.