August 11, 2015
To: Limited Partners in Elizaville Partners LP
From: Max G. Ansbacher, President, Ansbacher Investment Management, Inc., the General Partner
Subject: July 2015 Performance
Elizaville Partners had an average net estimated gain in July of 3.59%. This brought its average year-to-date gain to 24.22%.
The S&P 500 Stock Index gained 1.97% in July for a year-to-date gain of 2.18%.
There used to be a television program called Kids Say the Darndest Things, and one could say with equal truth that stock markets do the darndest things. The last few days have been pretty hectic indeed, but if you can remember back to the period from the beginning of July to the 24th you might be surprised at how many records were set due to lack of volatility.
In fact from the beginning of the year to the last week of July, the market as a whole barely moved. Until the 27th of July the Standard & Poor’s 500 stock index had moved less than it had ever moved before. It also had not closed more than 3.5% above or below its starting point. That has never happened before either. The Dow Jones industrial average has also been setting some unusual records. It has been going nowhere since last year, crossing above or below its December closing level 21 times so far in 2015. That amount of aimless up-and-down movement is already an unsurpassed record for an entire single year!
What’s even more interesting than this sluggishness in the averages of the top blue chip stocks is that this lethargy was completely absent from other sectors of the market. For example, the Nasdaq composite index is up 7.45% and has been making record highs.
What we would all like to know is what, if anything, do these unusual movements tell us about what the market is likely to do in the future? I think that the only honest answer is that it doesn’t predict anything. If future movements of the stock market were at all predictable you may be sure that some super computer would have figured it out long ago, and would have by now caused the market to react and nullify the advantage. Meanwhile we are all doing the best we can with the tools we do have at our disposal.