I seem to be alternating between greatness and mediocrity, every other year. Coming off a +80% 2013, I will end up losing about 20% in 2014. Although I didn’t lose money in 2012, I certainly underperformed. I had stellar 2007, 2008, 2009, 2010 and 2011’s. So what the fuck is going on?
That my friends is developing.
All that I can do now is focus on the future. I am setting up for 2015 outperformance. One of the things I used to do, when building positions, is buy in small increments. I ignored that in 2014 and it cost me dearly. In the past I’d assume my initial entry point would be wrong and I’d buy it in two or three tranches, sort of what I am doing with HABT. This methodical manner gave me time for my ideas to work out. If you’ve been following me a long time, you know I have great ideas, but sometimes get flushed out early. That is due to position sizing and stress points.
Case in point: GPRO.
In 2015, I intend to focus on winning industries, avoid bottom picking and leave that to the degenerate out there in the woods. I will re-establish my dominance in macro-market calls by positioning in stocks that correlate well with the indices and avoid smaller capped names. A certain percentage of assets will be set aside for high stakes poker. But for the most part, my methods will be fairly strict and structured.
Desire is man’s greatest vice. It is what drives us to greatness and then ruins us. The manner by which we set out to achieve desired goals is what separates the winners from the losers. In 2014, my desire for outlandish returns resulted in my person being placed into a ‘fag-box’. But that’s okay, since I still have plenty of powder left and the skill-set to make it right.
Off to see about a 2 1/2 inch rib eye.
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FIG!%202015%20YEAR%20OF%20THE%20SHEEP!%20
I am going to take a different approach for 2015 in my allocation models and that is to overweight small caps this year. Not individual shit co’s per se but IWM exposure.
2013/14 were all about the large caps and tech. My thinking is small caps play catch up in 2015.
IWM Weekly Chart
YTD return: IWM under 4%, compared to 14% (before divs) for the SPY and 20% for the QQQ.
This is on the heels of a +30%, +35% 2013 for the SPY and QQQ, respectively.
Also, looking closer on that weekly chart, two weeks ago you’ll see the bar is orange and labeled “P”, which means it was a pivot bar, and this pivot is breaking up, in the context of an existing bullish trend. Plus, the entry / stop is easy to manage. Support (horizontal dots) are at 113 and 109.
Sometime very obvious index breakouts are fakeouts, but I think that risk is worth the potential reward.
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By comparison, QQQ seems more extended.
QQQ Weekly Chart
Agreed. How do you get a pivot bar? Formula?
Still don’t like gold either, no reason for exposure yet, next target $1044, can probably still short miners/juniors as well.
GOLD
And, since I like talking to myself, here is this week’s Asset Class and Sector Stats table.
Asset Classes and Sector / Style Stats Table
The main idea is, going from left to right, can see daily trend, weekly trend, weekly trend strength, then monthly relative strength, monthly volatility estimate (forward looking implied volatility), monthly correlation (over past 10 months).
Making bar charts inside a single spreadsheet cell is a cool trick, and this allows you to easily identify the strongest /weakest of the categories.
FWIW, KING DOLLAR, Treasuries, Large Caps have been the leaders most of this year (at least since spring, when I started updating the table each week). This is useful for long term positions since you get the overlap of daily weekly, but then monthly trend, rel strength, volatility, and correlation.
Lastly, very merry xmas and happy new year Fly to you and your family
Lol
Bottom fishing was extremely deadly this year. I guess it worked for some industries after the financial crisis but we are in a different stage of the market now. Anyway, I don’t do it anymore and I haven’t had any big losses in that time. I think the problem with buying dogs is that it’s hard to set stops on crap because you think it’s going to turn around at any moment and really rip upward.
The other thing I see a lot of is saying the next six months looks just like 1999 or 1987 or 1929 or some other crazy year. Things just don’t work that way – the market is anything but predictable and whatever happens in 2015, it will be just as surprising as any other time. If you think you can just lay a chart from the past over today’s market and know where things are going, good luck with that.
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… could the recent “Old School” sillyness be a “jump the shark” event in the iBC timeline ?
I hope not !!!
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I REALLY HOPE NOT !!!
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… to me … it just felt a bit disingenuous !!!
Prolly just me !!!
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… to me … it just felt a bit disingenuous !!!
Prolly just me !!!
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Damn iPad !
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The Setting Up For 2015 post is yet another example of Fly’s astute analysis and brilliant market nuance !
No one here actually truly believes this “strategy” will be strictly adhered to …
Right ?
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Not a criticism … BTW !
Just an observation based on years of observing this “Fly” creature !!!
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“In 2015, I intend to focus on winning industries, avoid bottom picking and leave that to the degenerate out there in the woods.”
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NOW … THAT … is some funny, wacky shit !!!
It just is !!!
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Love ya Man, but … COME ON !!!
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I think it’s time to go long since the year 2015 ends in a 5.
Will 2015 be the year that alf44 learns how to type a normal post?
http://vine.co/v/OXrI2gXnVpM
Some really great LOL’s today
http://www.fantasysportaction.com/jomsocial.html
Fry, don’t you have to fade a lot of heat after a down year? How do you handle that?
$EXAS will be a great stock to own in 2015.
I finished up 70% (on a 200k account) in 2014 thanks to the winners listed below. The great majority of these ideas were generated by LeFly or Option Addict, or both.
Top Winners 2014
IFON 47.33%
PHOT 40.50%
SCTY 25.99%
TRUE 23.45%
PLUG 19.96%
RVLT 18.41%
ANGI 15.04%
KING 11.10%
BABA 10.25%
This should be a longer list, but I had to learn some lessons along the way like:
1) Biggest winners were held 6 to 8 weeks.
2) Largest winners were not initiated with full position.
3) Averaging down on High Conviction ($IFON, $TRUE) worked well.
4) Averaging up (more like chasing) caused trades that should have been positive to turn negative.
5) Going back to previous winners (due to lack of other ideas) caused me to give back money in previously great trades ($GOGO, $ZU) and actually registered negative returns in these names for 2014.
6) Broad market ETFs were losers for me and put on when I lacked any trade ideas or spooked by headlines. Don’t trade when lacking ideas in individual names.
7) Selling calls against positions cost me money.
8) Cut trades when down 12%. I cut some too early, especially higher conviction ones like $EXAS.
Some may say “no shit” to this list, but from my trading this past year, this is what stood out for my own trading.