Outperforming the market but given too much back is a neat summary of the first six months of 2010. Unsurprisingly, its proved much tougher than 2009.

Individual stock mistakes in West China Cement (WCC), Quintain Estates (QED) & Polo Resources (POL) have hit the P&L. I let all three position run for too long & all took too large a position relative to the portfolio without tight enough stops. In short I’d become too complacent due to the excellent market performance since March 09.

Going forward I am looking for the market to rally in the near term, it feels too bearish right now. Beyond that I am unsure, the latest macro figures point to growth slowing but will it stabilise at a lower positive level or are we heading for a double-dip? I will look to manage risk well with good money management and above all protecting capital.

On a micro stock level there are plenty of reasons to be positive, one very nice feature of the current market is the increasing takeover activity at substantial premiums to the current market price. Unlike 2008/2009 companies seem more confident now to make approaches and are seeing value. If the current price weakness continues I think we will continue to see more of this.