June was the best month of the year performance wise as we finished with an annualized return of 17.88%. This is net of expenses and all interest charges. Good income from communications, cigarette, and oil option trading. Highlight of the month was a large gain from a Lorrilard trade. We also continued from May much lower interest expenses. We were helped by having a larger number of positions to trade in June. Our annual goal is 18%, so despite the good month were remain focused on improving our return going forward.
The mid-year report was also good, but below goal at 16.09% net for the six months of trading. Our dividend gains, expenses, and interest costs were in line with expectations for the trading activity.
Looking forward to July we expect less profits since we will have 25% less trading positions available due to the stock assignments during June. These assignments required longer expiration options to stay within hedge fund required trading goals. However the positions we do have offer some solid profit opportunities. There is also the chance we could gain back some assigned positions during July market activity. Interest costs could likely be larger than normal with the balance sheet leveraged more than usual.
July also remains a mystery market wise as we await what transpires when the Federal Reserve ceases QE2. Carry forward losses are significant in long positions, but none concern us except for the legacy communication stocks FTR and WIN. Both positions we are looking to end this year. Due to the uncertainly of the markets we continue to keep trading positions highly concentrated in large caps and less volatile positions. Looking out six months to the end of 2012 I would expect that the 17% plus gains of the last two months will not be duplicated going forward, but we do expect 15% plus gains and that performance still is ahead of most hedge funds this year as well as many mutual funds.
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