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explo

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Everything posted by explo

  1. explo

    Trading Strategy

    Back on target much faster than expected.
  2. explo

    Trading Strategy

    While the sector concentration is not insignificant considering the largest sector of the 11 existing sectors has a 26.5% weight the industry weights has less concentration with the largest one having a 7.5% weight. I have now compiled the industry weights chart. While all 11 existing sectors are covered only 36 of the 69 existing industries are covered.
  3. explo

    Trading Strategy

    Here's an article talking about 2019 starting off as a stock picker's market. https://www.investopedia.com/why-stock-pickers-are-beating-the-market-in-2019-4586786 It also notes the following: The late John Bogle, founder of the Vanguard Group, was a key promoter of passive investing through index funds, based on decades of research revealing that few active managers, or stock pickers, ever have been able to beat the market averages on a sustained basis. This slashes my objective of sustainably achieving double the real return of the market. Time will tell if I'm fooling myself with my strategy to long-term beat the market in this massive way. Key to track this is the separation of Alpha and study the adolescent behaviour of this enabler of the objective.
  4. explo

    Trading Strategy

    My Alpha stream hit a new high yesterday capping its longest drawdown to 158 days. It's been interesting to watch how the stream behaved during the test of the December volatility strike. When the strike hit it was not more immune than Beta in terms of getting derailed to the downside from its target. The response on the other hand has been to quickly go above and beyond its target while Beta is fighting its way back to its target more slowly. In total the Alpha stream has gone the extra miles to carry the portfolio back to its target ahead of its benchmark. This has played out as one would hope and expect from its Alpha stream. Alpha's daily correlation spiked during the strike but on a monthly or quarterly basis its derailment from target differ positively from Beta in the aftermath of the volatility strike.
  5. explo

    Trading Strategy

    One more stock was added after further verification review (97 stocks, 57 funds, totalling 154 Alpha soldiers now). In total the minor corrective restructuring led to 38 transactions. The transaction cost is concluded now as 0.15% in total, 0.09% in forex and 0.06 % in commissions this compares to the monthly strategy maintenance cost of January which totalled 0.08% (0.05% forex and 0.03% commissions).
  6. explo

    JinkoSolar (JKS)

    Up 18% today on no news. I thought it was too cheap when it traded at $2.00, but I can't explain recent strength since it landed at $3.50. Maybe has something to do with LDK trouble, and provincial politics. Will Jinko as Jiangxi's other big solar benefit from the LDK situation?
  7. explo

    Trading Strategy

    The allocation is strategic by which I mean it is optimized to perform best over full economic cycles. A tactical allocation would probably shift some consumption exposure from discretionary to staples now. Note that consumer discretionary is a stock pickers sector. It's broad. AMZN and TSLA belongs to it for example. Experts are saying that we are entering a stock pickers market. This should serve my strategy which focuses on picking longterm winners and the consumer discretionary sector might not be "all" bad for that reason. That the sector gets a high allocation in my optimization is probably because it is a "picking" sector where many longterm successful stocks can be found. The sector allocation is just a result of the strategic mandate of the allocation not a frame for it. Some strategic allocators allocate asset classes first, then sectors and last individual names within sectors. I let all that be a result of the allocation optimization based on the end purpose.
  8. explo

    Trading Strategy

    During this process I started to suspect that the Yahoo! Finance data that I use for prices, splits and dividends might be incorrect. I did an investigation and it turns out it is and it was during the period when I went into massive diversification increasing the number of analysed stocks from 35 to 275. Some of my oldest downloaded data seem to be correct though. I spent a week correcting the data and redoing the allocation optimization. It resulted in some pruning with the number of investments being reduced from 161 to 153 of which 96 are stocks and 57 are funds. In total around 15 stocks were dropped and 9 were taken in. Two funds were dropped. 15 investments were weight adjusted. In total the restructuring will have a cost of less than -0.2% and will thus not greatly impact the 2019 return. Since the asset allocation is strategic with the purpose of providing long-term return the cost to base the allocation result on correct data seemed motivated. Hopefully this was the last restructuring (it was minor compared to some restructuring during the strategy development last year). The sector distribution changed quite a lot. The defensive sectors share was reduced from 30% to 25%.
  9. explo

    Trading Strategy

    I'm viewing my strategy more and more as an enabler of maximum "time in the market" rather than savvy "timing the market". It's said that the former is how to achieve good long-term return and the latter how to risk missing out of the long-term market return. The strategy purpose is a bit more complicated than that, but it is something worth remembering, that a strategy that helps maximize time in the market (by risk management) will do a job building long-term wealth. That's understandable. It's a massive exercise to keep a well diversified portfolio when it's stocks heavy. I have 50/50 stocks/funds but the stocks are still more than 70% of the risk. Low fee funds are excellent diversification tools. Good job. At least I only have one account to track and maintain..
  10. explo

    Trading Strategy

    Thank FED! Looks like a big bear scare have set the direction at this crossroads. Let's hope that the market down trend is broken now and that Christmas Eve was its low.
  11. explo

    Solar News

    Wow, climate change is negatively impacting solar PV profits now..
  12. explo

    Solar News

    Yes that’s been a wild one.
  13. explo

    Trading Strategy

    Due to the mute week the window of opportunity is technically not closed for the bears, but it seems less likely that they will be able to use it when they failed to do it so far. There are near-term upside risks on trade resolution and earnings. Meanwhile my Alpha return just got back above its long-term CAGR target.
  14. explo

    Trading Strategy

    S&P 500 returned -0.22% for the week. I'll take it after the Tuesday plunge. The bulls regained and stood the ground in the end. The bears might have missed the opportunity to reject the Christmas Eve low as the bottom before a new high. Without such a set back the outlook for the 2019 return is considerably brighter.
  15. explo

    Solar News

    Congrats to CN Solar holders! JKS up 115% and CSIQ up 70% since their 52 week lows.
  16. explo

    Trading Strategy

    So far the bulls haven't had the power to follow through this week to fully scare away the bears to confirm the Christmas Eve low. Looking at short-term trading I'd say it's still more likely than not that we haven't seen the bottom before a new high yet. That perception can change quickly. International markets are trading encouragingly today, but I'd really like to see the US stock market end the week in green in order to pave way for the bulls and we have some distance to cover today to achieve that. If not I think bears are back in town for a big red week next week with the target set on a new much deeper low. From an economy perspective it would make more sense to extend the bull market before entering a full blown bear market, but markets can behave prematurely and I think this week (or very shortly) is where the stand is made before a swift move in the winning direction. In a long-term perspective I don't think the market it is too extended to not support 3-5 years of continued bull market even though its been a historically long one, which is why the bulls will likely step in in the eleventh hour to confirm the Christmas Eve low as the correction bottom.
  17. explo

    Trading Strategy

    Yes and I really have to say that it has fundamentally changed my feeling of uncertainty about my portfolio positions. Even though a focused portfolio can invest with conviction, when the storm arrives there will be an inner battle to stay truly confident in the positions. Loss of confidence lead to bad trades. I felt free from that now during the Q4 volatility. Having many investment enables high diversification which I utilize to not worry about any single investments having a big influence on the total. No stock has larger weight than 1% and no fund has larger weight than 3%. It also enables higher resolution of the balance. Picking investments become a larger effort, but with my systematic approach, the ongoing effort declines quickly after initial construction. Below sector distribution is an example of the stock allocation balance:
  18. explo

    Trading Strategy

    Yes a pull back will come. To me the big question is if we will have a new high before a new low after that. If this week is significantly net red I fear the market is looking for a new low before recovery. If this week is net green I think the market is looking for a new high (after a pull back coming weeks) in this late bull market and that this correction was just a warning sign before a larger one that might be more than a year out. That is, will the next pullback be the start of the right shoulder or the head in a typical IHS correction formation, i.e. was the Christmas Eve low the left shoulder in a big set back or the head in a minor set back? It is nice to now have an all weather strategy without any market timing component, so it doesn't really matter for my portfolio trading what my market direction speculation conclusions are. I'm more of a speculative spectator enjoying the game than a tactical participant with a direction stake now.
  19. explo

    Trading Strategy

    Last year was the first year with broad sector coverage stocks instead of all solar stocks (this change was made in August 2017). The portfolio still had two faces in 2018. Before August it had a dozen stocks and a handful very leveraged funds and after September it had around one hundred stocks and around 60 funds at equal leverage. I think 2018 opposite 2017 was still quite representative of the current portfolio, but it will be interesting to follow 2019 as that is the first year with my new strategy in place from the start. The ambition is to produce long-term real return that is twice that of the stock market without experiencing deeper or longer drawdowns than the stock market.
  20. explo

    Trading Strategy

    The action today suggests that it got to work on that immediately.
  21. explo

    Trading Strategy

    I'm upgrading the portfolio today. 10 stocks in, 5 stocks out. In total the stock count increases from 97 to 102. Fund count stands at 59. That is 161 Alpha soldiers in total.
  22. explo

    Solar News

    This is the value I saw and the valuation I never got to see while holding the stock.. http://www.macnicolasset.com/the-daily-january-21st-2019/ JA Solar Holdings Co. moved forward with a backdoor listing in mainland China after Qinhuangdao Tianye Tolian Heavy Industry Co. said it would buy the cell maker in a 7.5 billion yuan ($1.1 billion) deal. Tianye will acquire JA Solar’s equity interest by issuing almost 953 million shares at 7.87 yuan apiece through a private placement, according to a filing to the Shenzhen stock exchange on Monday. The two companies signed a letter of intent in July after JA Solar completed a deal valued at about $360 million to delist its American depository receipts.
  23. explo

    Trading Strategy

    Heading into this week the market seems to be at a crossroads on whether to confirm or reject the Christmas Eve low as the bottom of this correction. Looking just at the portfolio is seems to have confirmed that low as its bottom already. The stubbornly green start of the year has already sent both Alpha and Beta YTD returns above their annual return targets.
  24. explo

    Daqo (DQ)

    Ok. Good luck with the insightful gamble.
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