The Two Tim Tale

I have been running an experiment with myself over the past couple of months. I really didn’t plan for this experiment. I just sort of fell into it. Now that it’s running, though, I’m quite interested to see what comes of my personal test.

The first result of this test is as follows: in the first quarter of 2017, in my regular portfolio, I lost ground. That isn’t a huge shock, since that portfolio is entirely short, is often 200% margined (or even more), and Q1 2017 had all kinds of lifetime highs on just about every major index. I had some great trades here and there, but the simple fact of the matter is that if you spent an entire quarter going short, and the market hits record highs, you are not going to make money.

However, I also traded a different portfolio. This portfolio had some huge disadvantages versus my “regular” portfolio:

(1) I didn’t start trading it until the first month of the year had already passed by;

(2) I only allowed myself one or two positions at a time –  maybe three, tops;

(3) I only allowed myself to trade ETFs;

(4) I was so conservative with it, I never used more than 25% of my buying power

And yet, with all these drawbacks, this is what Q1 looked like for my “ETF-Only” portfolio:


That’s right – – about a 10% gain, with basically both arms tied behind my back. (The trades, incidentally, were largely reflected in my Slope Plus ramblings). Incidentally, the chart above could only be displayed based on monthly data, so don’t be fooled by the smoothness.

To be very clear, this wasn’t a “mega-bull” portfolio. On the contrary, having just examined my results, virtually all the gains came from triple-bearish symbol ERY and double-bearish symbol TWM. Isn’t that wild? So this portfolio wasn’t just bearish, it was crazy bearish – – and yet it kicked my “normal” portfolio’s ass all over the football field.

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Disclosure: None. 

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