- Mustang Sally +43%
- The SMT stock portfolio +25.2%
- claes J +19% (although if marked to market +6%)
- Rohit G + 13.8% (although if marked to market +4%)
- Bob B +13%
- The SMT metal portfolio would be in 4th place with +6% unless 3rd and 4th recover from their current drawdown.
So far for the year starting on January 1st the SMT metal portfolio is +25%. Not bad considering the metals have been in a down trend since February and I rarely trade the short side. Certainly any hedge fund in the world would be ecstatic with that kind of return but I was hoping a contrarian trade in the metals would have paid off by now. This has been the most difficult entry to a contrarian trade I think I’ve ever had. I now know how Michael Burry felt. We’ll keep plugging away though. Eventually a solid bottom will form and the weekly charts will cycle back up to overbought.
Since the beginning of the year the SMT stock portfolio is +11%. Again not a bad return. We spun our wheels during the extreme volatility early in the year but we’re finally starting to make some gains now that the volatility has settled down. I’m now waiting for a contrarian setup in the stock market. By that I mean we are waiting for an intermediate or even daily cycle degree correction before we will be ready to take a significant long position in stocks.
I noted when the 2018 challenge started that it would be tough for most of last years winners to repeat. That’s just how markets are. What works one year often doesn’t work the next. If a trader doesn’t recognize a change quickly and adapt to the new environment they often underperform. This is why it’s just nonsense to look at past returns and extrapolate future expectations. Just because a trader or newsletter had a good year or even a couple of good years it in no way guarantees they will be able to repeat that performance. Yet so many clueless traders still want to see historical returns as if that in some way tells them what the future will hold.
What you really need to do is determine if a newsletter or guru has been able to adapt quickly to changing market conditions or not. The few that can are more likely to produce long term gains rather than just one good year followed by a bad year and so on.
Every one of last years winners (except me) is now so deeply underwater that they will be lucky to end the year at breakeven. We still have 10 months left though. So they certainly have time to dig themselves out of the hole.