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explo last won the day on April 29

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About explo

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    1. explo

      Trading Strategy

      Here's the ugly picture of the week:
    2. explo

      Trading Strategy

      It is losing. I had another management cost distorting the week as a hedge fund which is my largest investment is closing (similar to a buyout for stocks) so I had to reoptimize and reallocate a lot of captial. I put in around 40 orders during the weekend. It’s not a good time when the market moves a lot. The buys filled on Monday, but the sells have not filled yet. I can update when the week is final as it is the first sign of negative action this year. Congrats on good cash allocation timing.
    3. explo

      Trading Strategy

      Breached 50% the last day of April and marked the third double digit monthly return this year (March was mid single digits). Incredible point of time for the launch of the new less risk averse strategy..
    4. I think the real issue with FSLR is its risk concentration: Rely on US market dominated revenues Rely on temporary competition protection in US market Rely on temporary subsidies in US market Rely on competitive success of narrow field of CdTe manufacturing equipment development Rely on success of narrow field of rare Tellurium production Rely on continued wide market acceptance of toxic Cadmium So far there's been volatile reward for these risk bets. When one has failed another has delivered. It would seem prudent to spread bets.
    5. explo

      Trading Strategy

      Approaching 50% return less than 4 months into the year. Nothing special in solar world, but this time my capital preservation strategy is better. After a long time of focus on asset allocation optimization and verification of Alpha and Beta return attribution I've recently focused more on return contribution analysis in order to verify that the allocation does not contain any poor contributors due to flawed strategy or tactic. I think that this continuous qualification of the strategy and tactic is key to long-term performance success. --- Goal Financial independence by 2030 Objective 15% annual return @ 25% volatility Strategy Rebalance optimal allocation Tactic Buy the dips and hold the rips Allocation Return
    6. explo

      Trading Strategy

      Prudent. Same here. I stand at 42.6%. I fear what will happen when the market goes south. The market has done nothing but going up since I increased my risk allocation a few months ago so I have no indication on what the behaviour will for a similar volatility spike as we saw in December.
    7. explo

      Trading Strategy

      My increased Health Care exposure took some beating last week. The previous exposure dominator Consumer Discretionary continues to soar. The new dominator IT is not disappointing.
    8. explo

      Solar News

      I haven't read all articles on demand speculation, but following this industry for 10 years I've seen that low price on money is usually boosting demand. FED and ECB pivot to economy accommodation will make those spreadsheets on solar IRR look more attractive. Who's making money on the demand is then decided by the forex moves. Keep your cost in weak currencies and sales in the strong ones. Note that the places where money is cheap can see its currency strength effected by this. Sure what's going on in the industry and at its companies matters too 😉
    9. explo

      Trading Strategy

      Since your accounts have quite different holdings your total risk-adjusted return is likely higher than the average of the individual accounts. Diversification offers a free lunch when investing. This can maximize returns when combined with leverage to achieve the desired risk level. It sounds like you have a good setup for your risk comfort zone. It's cheaper to lever down than up.
    10. explo

      Trading Strategy

      Although the leverage target is fixed the actual leverage is opportunistically flexible, but its level at any given time is rules based (to buy when relative prices are low) not by discretionary macro or other speculative decision. During Q1 it averaged 2.36x. I've let it naturally grow a little to avoid excessive costs during recent reconstruction as I expanded the asset allocation pool and increased the volatility target (but not the leverage target). If I were invested with your 0.8x lever my return would be almost 3 times lower at 12.45%. So my return on assets was below all of your returns, but likely with less volatility. When I recently increased my volatility target (thanks for you tip leading me to examine that path again after changing the allocation pool) more IT and Healthcare was allocated at the expense of Consumer like we discussed before. I think your asset allocation might still be more growth aggressive than mine and dominate your volatility (dampened by your low leverage) while my volatility is still quite low for the total asset allocation and is more dominated by the high leverage. Since the period above is short and the return is high the risk-free return is negligible which means return on risk can be normalized simply by dividing with the volatility (normally the risk-free return should be deducted first). Since I'm still in the build up phase while you are closer to the tapping phase one cannot say that one level of volatility would be correct for both of us. My new higher risk target remains to be tested by time. The December volatility spike was a good test for my previous volatility target and caused a drawdown depth of 25% compared to the market 20% as correlations spiked simultaneously but ended much more quickly than the market.
    11. explo

      Trading Strategy

      Thanks. Your returns were likely achieved with lower volatility. On a risk-adjusted return basis it was still a very nice benchmark beat for me during Q1. I'm by my 2x leverage target around 200% invested, but with a reasonable Beta value target of 0.9. The volatility target is 25%, which is 150% of the average market volatility, but with more normally distributed returns (less volatile short-term volatility) than the market.
    12. explo

      Trading Strategy

      2019Q1 Return Volatility Portfolio 36.74% 16.97% Benchmark 12.71% 13.52% Difference 24.03% 3.45%
    13. explo

      SunPower (SPWR)

      Yes after a decade of negative retained earnings trend they might finally get back that 2.5 billion of raised shareholder capital that they now have burned down to below zero. Not. The company is still valued at over a billion for this achievement. That's what's impressive.
    14. explo

      Trading Strategy

      Now that we are in 2019 I'm re-incepting the portfolio as of January 1st 2019 since there were major changes to the portfolio end of 3Q18 when the massive diversification of both stocks and funds was introduced. Since the funds basket is no longer completely different during its initial period I can now break down the return not only by the risk streams but also by the asset streams of the portfolio. Further I'm breaking it down by the capital streams too now. I'm also changing the illustration of the portfolio allocation to be a more simple high level view.
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