August Results

As of August 31, we’re up 54.64% since inception (March 22, a little over 5 months.)   A competing “buy and hold” portfolio would have earned about 1%.

  • Inception to date:                  +54.64%
  • S&P 500:                                +0.99%
  • Differential:                            +53.65%

August was going so well until the 7th.  That marked the first of 20 sessions in a row that traded within 5 points of the fan line from the top in 2007.  Directional trading became very difficult, as every breakout or breakdown fizzled before it could get rolling  — a situation that will likely continue until the central banks’ intentions become clearer.

So, I’ve resorted to short-term trading — playing the daily swings (aka scalping) for a few points here and there and going to cash much more often.  Since Aug 21, results have been much more positive: we managed to salvage a 5.39% month versus 1.23% for the S&P 500.

The downside of such a strategy is that we might miss part of extended breakouts or breakdowns.  It’s also much more labor intensive — resulting in many more trades than normal (sometimes several in one day.)  I think it’s a risk worth taking — at least until after Sept 13th when the FOMC concludes its next meeting and QE questions are (hopefully!) answered.  Then, I plan to go back to directional trading before all my hair is as white as my knuckles.

Two months into Q3, we’re at 15.68% so far versus 3.19% for the S&P 500.  Q2 came in at 37.74% — which would have ranked us #1 among managers if we were an equity mutual fund or (according to these guys) a hedge fund.  Monthly results are as follows:

 
pebblewriter S&P 500
Mar (from 3/22) .50 .37
Apr 9.35 0.0
May 14.59 (6.27)
Jun 14.52 3.72
Jul 10.29 1.23
Aug 5.39 1.96

as of August 31, 2012

More details and important disclosures here.

Comments

August Results — 6 Comments

  1. I appreciate a lot your work, but I have to admit I was starting to worry about this becoming a day trading blog. I am starting to miss your mediium and long term view and scenarios. They are starting to get lost in the market noise. So I am happy to read you want to go back to what PW is about in the first place. b.t.w. great result of course.

    • Nothing has changed much since our last big picture discussion
      [https://pebblewriter.com/big-picture-august-24-2012/].  But, the market
      is frozen in the headlights of what the ECB, Fed and German Constitutional Court will do over the coming week.  It’s ridiculous, of course, but c’est la vie.

      As earnings falter, the debt bubble expands and recessions continue, I have a very negative view of the underpinnings of the global economy.  Yet, an injection of liquidity would probably keep this floating crap game alive a little longer.  And, it will work perfectly…until it doesn’t. 

      Day trading isn’t my thing.  It’s stressful and time consuming.  But, it’s what the market is giving us lately.  I’d rather make some money day trading than sitting around, wishing things were different.  I expect that after FOMC on the 13th we can get back to “normal.”

  2. Congrats PW.  you’ve helped my trading, thanks!  Glad I’m learning some of your tricks.  And my golf game is doing just fine…club championship this weekend…been practicing!

    • You’re up for the club championship?  Honestly?  And, here I was starting to like you, LOL (just kidding) Wish I had it in me, but it ran out years ago.  Best of luck.

        • I’ve shot in the 70’s once in my life.  It was an A++ day.  And, as is typical for golf, it sucked me into loving the game just a little bit longer…