Elizaville Partners Monthly Letter March 2015

Elizaville Partners Monthly Letter

April 8, 2015

To: Limited Partners in Elizaville Partners LP
From: Max G. Ansbacher, President, Ansbacher Investment Management, Inc., the General Partner
            Chuck Ansbacher, Director of Business Development, Ansbacher Investment Management, Inc. 
Subject: March 2015 Performance

 

Elizaville Partners had an average net estimated gain in March of 2.3%. This brought its average year to date gain to 12.56%.
 
Elizaville Lite had an average net estimate gain in March of 1.1%. This brought its average year to date gain to 2.45%.
 
Elizaville Plus had an average net estimate gain in March of 2.09%. This brought its average year to date gain to 8.36%.
 
The S&P 500 Stock Index lost 1.74% in March for a year to date gain of 0.44%.

The sharp drop in the market which began on March 23rd saw the S&P lose almost 2.5% in four days. A move like this puts our option writing strategy to the test, and provided a good occasion for us to review our defensive practices. While we certainly didn’t emerge unscathed, our hedged S&P futures combined with the stop loss orders we place on all options sold did mitigate the damage, and we were able to post a relatively solid gain on the month.
 
Our new programs concluded their second month of trading in positive territory as well. Eilzaville Plus did not match the performance of our primary fund, as may be expected in down markets due to its unhedged nature, and Elizaville Lite succeeded in its goal of providing a modest, predictable stream of returns. As we have previously mentioned, any new investment in either of these new programs will see our management fee waived for the duration of the year.
 
The S&P finished the first quarter of 2015 up 0.44%, the ninth positive quarter in a row, making this the longest consecutive positive period for the index in 17 years. March was an interesting month in which not much news emerged to move the market one way or the other. The same themes that have dominated the year so far, such as cheap oil, strong dollar, Greek uncertainty and steady jobs growth continued to soldier on, but their existence seems to be largely baked in at this point. With no economically significant news to seize on, the market trended lower, mostly due to anxiety over whether or not we are witnessing a mere lull in this unstoppable upward climb, or whether this is the beginning of the ever feared market correction.
 
One uncertainty that continues to give the market pause is when the Federal Reserve will decide to raise interest rates, and by how much. Many have been predicting this rate hike will come in June, but with hiring slowing significantly in February, and many economic indicators pointing in a less robust direction, the timing is truly anybody’s guess. Max had the opportunity to see Vice Chairman of the Federal Reserve, Stanley Fischer, speak at the Economic Club of New York on March 23, and came away convinced that when the Fed does raise rates, it will be extremely incremental, and ultimately a vote of confidence in the strength of the U.S. economy. He wrote a blog post on the topic on our website which I encourage you all to read, as his takeaways were not necessarily in line with the conventional wisdom of the day.