May 12th – Bakken Fund Update

As you have noticed, we haven’t been reporting much over the last few weeks. Part of the reason was around the Dr Jekll and Mr Hyde persona the market has taken on lately for which we were on the sidelines in cash. The dust hasn’t fully settled but hopefully the occurrences of the 1000 point “flash crashes” over the next few weeks has passed. Surprisingly, through the overall market correction our Bakken plays held their ground for the most part. We exited our positions about 3 weeks ago expecting market turmoil. We got the turmoil we expected, but investors definitely didn’t abandon their Bakken plays. Had we held the positions, we would be roughly at the same point we are today. We currently stand up 26.2% since inception back in February and are currently 100% in cash with no open positions. We are looking for targeted opportunities to get back in the market, but will do so with caution and build positions. Some of the stocks with the highest forward PE’s such as Brigham Exploration and American Oil & Gas were the ones that held up the best with minimal if any drops in pps.     Below is a chart that shows us exiting all positions before the market correction but still beating the Dow and Nasdaq while being 100% in cash

left curve recent returns vs. major indexes right curve
Beating Today MTD QTD YTD
BKN
-0.00% -0.03% 3.19% 26.14%
S&P 500 yes
1.37% -2.53% -0.99% 4.34%
DOW yes
1.38% -2.36% -1.00% 3.07%
Nasdaq yes
2.09% -3.49% -0.94% 4.68%