Good start to 2011 in U.S. and Contrarian, not so bright for FTSE 100

Despite all the tension in the Middle East, the Dow Jones Industrial Average ended up 68 points, to 11,892 making it a 2.7% rise for the month, its best January since 1997. The FTSE 100 has not been so fortunate, with the index falling 0.6% in January to 5,881. The discrepancy in performance is largely explained by the larger presence of cyclical stocks such as industrial group Caterpillar (CAT) in the DOW. Also the fact that it is a price weighted index (i.e. the higher the price of a stock the greater its weighting within the index) whereas the FTSE 100 is a market cap weighted index is not widely recognised (and hence the U.S. S&P 500 is a better measure of U.S. stock market performance).

The Contrarian Investor UK portfolio suffered again today on the market sell off and unfortunately Imagination Technology (IMG) fell through a stop loss set 10% below buy price. The strong start to the year precipitated by some good gains in Xcite (when it went close to 400p) and Bowleven, have been marred by the Imagination loss (fortunately not a huge position) and a stupidly set stop loss on Sirius Minerals which caught me out and which was only set to control my required margin requirements (daft to do given the volatility of SXX).  But still up nicely for the Month so a good start to 2011 but it could have been a lot better. Now for Xcite and Bowleven to come in February!