Michael Arold

German Citizen
Personal Information
Education
University of Stuttgart, Germany
Qualifications
Master in Aerospace Engineering
Date of Birth
October 06, 1968
Job Title
Director, Channel Sales
Industry
Computer Software
Investment Experience
16 years private investing, 4 years short term equity trading

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  1. Past performance is no guarantee of future results.
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  3. Average subscriber performance (“Avg Sub”) is calculated by Covestor and is composed of the average, daily, time weighted returns of all active subscriptions to this model. These returns include cash, brokerage commissions, Covestor advisory fees, and reflect individual client suitability and risk score restrictions. More »
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Using multiple technical indicators, surveys movements in the market. Takes a discretionary view of trending stocks and sectors, based on fundamentals of likely moves in the opposite direction. Short term model looking to capture profits in short term price swings.

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INDIVIDUAL
INVESTOR
Inception date
Risk Score
Strategy
Asset class
Cap. bias
Long/Short
Current holdings 9
Avg. trades per month
Latest trade CMG
Subscribers

Performance and Risk

Performance Summary (as at end of )
Manager*
S&P 500
1M 3M YTD 1Y SI
Inception Manager* S&P 500 Avg. Sub.
Month to date (%)
1 month (%)
3 month (%)
1 year (%)
Annualized since inception (%) ? ? ?
Since inception (%) n/a
Sharpe (since inception) n/a

* Includes trades that fail Covestor Trading Rules

Past performance is not indicative of future performance

Strategy

Summary

Using multiple technical indicators, surveys the movements in the market and the sectors and stocks that are leading the way. Once interesting sectors or companies are identified takes a discretionary view, based on fundamentals, of likely moves in the opposite direction (i.e. have these been oversold or overbought). Short term model looking to capture profits in short term price swings.

Asset Allocation

Top Holdings (excluding cash) (as at end of )
Symbol Security Allocation(%)
AAPL Apple Inc. 14.08
BIDU Baidu, Inc. 13.81
MOO MARKET VECTORS AGRIBUSINESS 12.51
V Visa Inc. - 11.91
MELI MercadoLibre, Inc. 11.52
  Top holdings total (excluding cash) 40.02%
  Cash 19.37%
  Total number of holdings 9
  Leverage 1.04

View all holdings »

Investment Report

August 2010

During the middle of July, I started to put up a couple of small "pilot trades" in order to take advantage of surprising market strength and good start of the Q2 earnings season. Unfortunately, I was stopped out of these positions during the strong reversal of July 16. In hindsight, the market needed more time to create a solid base. Despite the fact that this move did cost some relative performance, my model portfolio has been able to outperform the market this year.

A new position that created controversial discussions on some Internet message boards was my Short Gold trade. The emotions, which some opinionated investors articulated only reinforced my bearish stance on the yellow metal: Gold is in a bubble and it seems like the last retail investor has finally bought into the asset. From a contrarian viewpoint, going short is the logical conclusion. However, there are more reasons to support my bearish thesis: Gold is showing some serious technical weakness and if the "risk trade" is actually on again, a thesis I will discuss later in this review, Gold could correct significantly. Note that I'm long term bullish on Gold , but at this point, we might see a drop down to levels around $1000. Price action will dictate my moves in the next weeks: should Gold indeed close below $1170, I plan to even increase the short position. However, I also will close the position quickly if my thesis turns out to be wrong and Gold prices remain stable despite stronger equities.

The term "risk trade" basically means that investors prefer to hold assets that can make them profits instead of holding cash. In a risk trade environment e.g. small cap stocks, emerging markets and certain commodities tend to outperform while "safe haven" currencies such as the Dollar or Yen decline. I believe that the risk trade, which drove stocks higher in 2009 is back on. The low interest rate environment, Mr. Bernanke's indications to support the economy if needed, a possible win for the Republicans in the November elections, better than expected Q2 earnings are factors that seem to overwrite weak readings of key US economic indicators and could trigger a stock summer rally. I'm therefore looking for good entry points on the long side in technology and industrial stocks. Some of the names I'm currently watching closely are Finisar, NCR or Netezza.

History

Monthly Performance (%)
Month Return Avg. Sub. Risk Performance

Transactions

Latest Transactions (as at end of )
Executed Symbol Security Type Price
September 01, 2010 CMG Chipotle Mexican Grill, Inc. Buy $157.95
September 01, 2010 AAPL Apple Inc. Buy $249.37
September 01, 2010 SMH Semiconductor HOLDRS Buy to cover $25.19
September 01, 2010 SBUX STARBUCKS CORP Buy to cover $23.53
September 01, 2010 MELI MercadoLibre, Inc. Buy $68.11
September 01, 2010 FHN First Tennessee National Corporation Buy to cover $10.40
September 01, 2010 BIDU Baidu, Inc. Buy $81.32
September 01, 2010 NFLX Netflix, Inc. Buy $131.80

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