Friday, July 30, 2010
Close out (AMZN)
Close out AMZN call at 1.08. Taking a hit. Mainly because of the limited time left in this trade.
Thursday, July 29, 2010
First Anniversary (July 17th)
Was quite a good year for the fund. The fund was up about 28% for the year from inception. It was looking even better up until January of 2010, followed by couple of rough months. Good thing is S&P was only up 15% during the period.
Key take away for the year
1) More leverage doesn't necessarily mean better results. We ran the portfolio at a gross leverage of around 1.6 till January, and didn't have a losing month. However, increasing leverage to 2.2 in February didn't add much to the return. Added to the complexity and we started bleeding.
2) Never underestimate momentum. Some of the trades outlasted our patience and over priced stocks continued climbing. At the heart of our strategy we are anti-momentum, and believe in deep value. of course some of them could end up being clunkers.
3) During periods of panic, pairs trading is a good strategy to protect wealth. But if you want to make money, a bias towards long or short the market is key. One of the reasons for this is correlations tend to 1, and there is very little dispersion.
4) These are also great times to load up on quality names like MSFT, JPM (Of course I'll keep my personal views on TBTF, and big banks out of this for now) etc. As a bank, JPM is probably better risk managed than it's peers. We are also sitting on a good 10% gain on the JPM trade so far. Will probably soon close out of that.
Key take away for the year
1) More leverage doesn't necessarily mean better results. We ran the portfolio at a gross leverage of around 1.6 till January, and didn't have a losing month. However, increasing leverage to 2.2 in February didn't add much to the return. Added to the complexity and we started bleeding.
2) Never underestimate momentum. Some of the trades outlasted our patience and over priced stocks continued climbing. At the heart of our strategy we are anti-momentum, and believe in deep value. of course some of them could end up being clunkers.
3) During periods of panic, pairs trading is a good strategy to protect wealth. But if you want to make money, a bias towards long or short the market is key. One of the reasons for this is correlations tend to 1, and there is very little dispersion.
4) These are also great times to load up on quality names like MSFT, JPM (Of course I'll keep my personal views on TBTF, and big banks out of this for now) etc. As a bank, JPM is probably better risk managed than it's peers. We are also sitting on a good 10% gain on the JPM trade so far. Will probably soon close out of that.
Close out (CPB, KO)
Closed out CPB at 36.6, KO at 55.1. Realigning the portfolio for a new and more robust process. More details coming soon. Currently running a very broad based, detailed back test for the entire US equity market. I will publish the results once the back testing is complete.
Sorry for the delays
Due to some technical reasons, have not been able to keep the blog live.
Few new trades not updated yet. Not much has happened after that... Except for one trade.
1) Long August 125 call on AMZN. This one's a loss making trade. Was placed just before earnings at 3.35. Earnings disappointed. Option is now worth 1.6. Don't get in, if not already in this. Although I do believe eventually kindle will be a success. Kindl3 looks great. No wireless fees for reading books.
2) Sell October 50 Call on EQR at 1.3.
3) Buy September SPY 100 put at 1.08.
Few new trades not updated yet. Not much has happened after that... Except for one trade.
1) Long August 125 call on AMZN. This one's a loss making trade. Was placed just before earnings at 3.35. Earnings disappointed. Option is now worth 1.6. Don't get in, if not already in this. Although I do believe eventually kindle will be a success. Kindl3 looks great. No wireless fees for reading books.
2) Sell October 50 Call on EQR at 1.3.
3) Buy September SPY 100 put at 1.08.
Friday, July 16, 2010
Close Out MAR/CHH
MAR at 31.53, CHH at 32.8. Have to post this at the end of the day mainly due to the restrictions at work. Will not be able to post trades instantaneously. :( anymore.
Friday, July 9, 2010
Wednesday, July 7, 2010
Thursday, July 1, 2010
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