So there goes my first year of trading. The bottom line is that I lost 9.8%. I made all kinds of mistakes, but certainly no luck to help alleviate, only jinx to boot. If my trading skills were sub par, or my emotions went out of control, I could live with the failures. But not if I made the above weaknesses irrelevant, and went with pure gambles (e.g. BBBY earnings) or followed some gurus (e.g. @the_real_fly) or any combinations thereof, and lost 9 out of 10 times. The year was a failure and I can unequivocally say that I cannot make a living out of full time trading. I might make it a hobby as long as I play small. To that end, I am concluding this blog site and move to a new one where I can blog random thoughts, and not exclusively about my portfolio value and trading, “full time” or not.
To give myself some justice, I’d picked one of the toughest years to trade. SPY finished just about flat. But it went up as high as 9% and went down as low as 14.5%. Tumultuous and brutal in between, to say the least. That pretty much says that most of the perma bears and most of the perma bulls lost money unless you were a successful day trader. And as jinx would have it, this year was the year I decided to follow a proprietary long term indicator, which basically means buy-and-hold for a long period of time (so far it means holding short for the past 8 months). And unfortunately that pretty much made me a perma bear (albeit an objective one) for the year.
As an additional consolation, my respected The Fly remarked on the last trading day of 2011:
I’ve failed to live up the gold standards of investing excellence in 2011. I attribute my setbacks to the unprecedented level of sheer fuckery, where traditionally reliable correlations failed, in exchange for low percentage outcomes. Meaning: all of the things I’ve learned and come to rely on, through the many years investing, was thrown into a blender, resulting in random outcomes. Randomness is my enemy, as it cannot be controlled.
He was up as much as 17% in November, only to be hit by some roadside bombs such as DECK in December, and ended the year “barely a winner”. 2011 was his worst year since 2002.
There is hope and inspiration, however, as can be seen through @buyonthedip’s YTD paycheck.
It is amazing that with so many bad news through out of the year, ranging from natural disasters to European sovereign debt crises, that the US stock market still finishes flat. Actually, the Dow Jones even finished up over 5%. So in that light, the bulls did remarkably well. Through all the bearishness, there were constant second thoughts a.k.a. fears as I held my SPXU: the Presidential Cycle, the S&P 1,400 target by most investment firms, and QE3. And on occasions when I went long, there’d be fears of the macro-economic doom-and-gloom and that fact that I was fading the long term indicator. Many sleepless nights for sure. My hair has gone notably gray and thin as a result. One nice thing about going into 2012 is that the bar has been set pretty low in 2011. Much like earnings expectations, when one sets it low enough, it’s bound to be beat. Let’s hope I beat my 2011 performance in 2012!
Thank you for following my journey in 2011. It was a journey of mostly follies, blunders, and jinxes, sprinkled with some minor successes. I wish it was the other way around. LOL! But I know it may have provided some psycho-therapies for some of you. If nothing else, at least that was something positive out of this whole endeavor.
Happy New Year!
Portfolio Value: $128,500