This entry was posted on Wednesday, November 7th, 2007 at 10:54 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
I’m sure some of you have noticed I haven’t been posting as much recently, the primary reason is I haven’t really had anything to say. Take today for example, it was your pretty typical large down day. Both Dave and I have made posts alluding to the impending volatility (Stormy Seas, Bank Index Drop). We’ve also mentioned time and time again of managing your overall exposure, by using strength to sell into so when there is weakness, you have the opportunity of having capital to deploy.
All you can do during these times is cut back on any margin and keep following your systems. As expected, my personal account and our swing portfolio are both in similar drawdowns. However, you’ll notice that our swing account is up ~18% versus less than 5% for the same time frame of the S&P 500. That is by all accounts an excellent year.
Could the market go down more tomorrow? Absolutely. Could it go down the rest of the year causing our swing portfolio to end the year with a loss (albeit most likely far less than the market), sure it could. Am I worried about either of these scenarios? Not at all. Dave and I have spent thousands of hours testing and refining our systems and are extremely confident in their long term ability to outperform the market. A 10%, 15%, or even 25-30% drawdown is not going change that. The key is these systems work long term. Long term is not daily, weekly, or even monthly.
- John