It was a tale of two different years for Top Gun, as for the stock market: the first half of the year and the second half (Top Gun 2007 Performance Chart).
Top Gun underperformed in the first half of the year, returning 4.15% compared to 6.00% and 6.66% for the S&P and Wilshire, respectively. I was nervous about the market right from the start of the year, especially after the big move in the second half of 2006, and we were positioned conservatively and with a lot of cash.
We were vindicated in the second half as I started initiating large short positions on the very first day of the third quarter in financials, REITs and consumer discretionary companies. It was a choppy ride and I misplayed the bottom on Thursday August 16th. But besides for that one mistake our timing was pretty much impeccable and we returned 9.90% compared -2.33% and -2.27% for the S&P and Wilshire, respectively.
For the year as a whole the final tally was:
Top Gun: +14.46%