Well, it is now time to visit our portfolio, STIA, and see how it is doing. When we started off, both DJIA and STIA stood at 9159. Since then, Dow has dropped to 8822 and STIA has climbed to 9489, a difference of 667 points or 7.3%! More importantly than the gains, is that this performance came by with very little volatility. Furthermore, the gains could have almost arbitrarily been magnified by following the suggested strategy of shorting DJIA and using the funds to buy STIA.
I have now found it necessary to make a few adjustments to the portfolio. Out are APCC, APD, CDO, OCA, and PDG. They are replaced by ANF, CMVT, MHP, SAVLY, and USM. A case could be made that CDN and AKLM should be replaced by DSP and MNTR. I wanted to get rid of CDN more than a week ago (along with most of the replaced items) because it was not behaving as expected and its segment of the market is well represented by SNPS. Had I been running an aggressive portfolio, I'd have removed CDN (or shorted it) and placed its funds on SNPS. But as you can tell from my lack of posts, I've been too busy to play the market much, let alone post market analysis. APD and PDG were two items that I did not wish to have in the portfolio to begin with (gold and chemicals are not what I favor these days). But again, I felt that if I were to reject them on those grounds, then I should be consistent and analyze all the others too. And I do not have time for this.
True disappointments were APCC and OCA. I really thought these dogs could be stars, which they clearly have not been. On the plus side, items that I really favored and did well, were ORCL, COMS, GILTF, and INTV. As a general rule though, it does not matter much if you are right or wrong, so long as you are willing to correct the mistakes as soon as you find them. In this case, if you plot the out-going stocks along with Bollinger bands and 22DMA, you can almost tell when during the past 10 days I would have gotten rid of them.
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Remember when I said I expected the Fed to stay put and get a sell off. Well that did not happen and I felt cheated out of my sell off. But I got something even better :) a market drop with no apparent reason at all. The sell offs and "corrections" are important because they help you figure out the changing nature of the market. After September, every stock had an interesting chart pattern. Obviously you could not be buying them all. But now you can separate the wheat from the chaff. Personally, I am bearish on the over priced low tech multinationals and commodity related stocks (PG, KO, G, metals and oil services stocks to name a few) and bullish on STIA (and a few others that could not make it into the list).
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On a more personal level, I am now managing two funds, ok, I'm managing a larger fund that I've been doing for two years now, and I'm "advising" on a portion of another fund. As for my own account, I now hold about 200 contracts on VISX. While this means that I'm doing quite well, it has caused me a liquidity problem. I feel that VISX has put its best performance behind it for at least a few weeks to come, but I can't close my position in an orderly manner to put the money to use elsewhere :( Next time I should not let myself to be carried away so much.
That's it for now, and good luck to all.
Sun Tzu
P.S. The new version of STIA, STIA2, can be found at techstocks.com None SI members should replace "talk" with "www" for the URL to work.
PPS. you guys were very quite while I was away. How come? |
