Monday, February 23, 2009

Piling on the negatives

The market indexes were absolutely crushed today, and my portfolio joined the rush downward. In addition to macro concerns, my portfolio companies had individual problems. These included an analyst downgrade of Companhia Vale (calls 6.2% of portfolio), and the announcement of two years of financial restatements at NutraCea (3.6% of portfolio). NutraCea recovered from the morning lows, and wasn't even my biggest decliner in percentage terms. And strangely, although the news was disappointing, it was also satisfying in a small way. Mostly because it raises confidence that the new CFO can get their books in order. Whether their business execution actually improves in 2009 remains to be seen. Also in question is future financing from lenders after such an episode.