I am looking for a successful trader to operate a successful US Equity strategy on 10 securities (MidCap to LargeCap), Strategy is rebalanced monthly with a holding period of 4 weeks to 12 weeks, strategy can have short term reversion in the early life, but in the long run (12 weeks max), the performance will be there. Performance have been between 50% to 90% annually, with a drawdown of about 45% over 1 year. You need a solid stomach as the strategy will not do well in a bear market, but will recover very quickly once the market over reaction has passed. A good trader could play the "volatility" of those securities, and make a killing in the long run as those securities are long term play and will prevail (fundamentally strong). Anyone interested, let me know.
It has been monitored and traded live over the last 2 years. I am running other portfolios but that strategy is way too "risky" for my risk appetite, like I said, in a bear market, the securities will crash pretty hard so you need to accumulate more shares to average cost them. but the rebound will always be very strong and recover fully, and the average costing will boost your profits greatly by doubling your gains. In a bull market, the securities will go up very fast (maybe 10% or 15% over 1 week), so you can take your gains quickly and wait for the next bear market to accumulate them again before the next market run. It's basically a portfolio of "neglected" securities that get "discovered" so that's how it goes, it's working nicely over the long run but it's just that I don't have the stomach for it for the strong short term swings and that's where the money is, the short term swings with fundamentally strong companies. I am monitoring the latest batch and it has done splendidly, but I can't help thinking you need to be a very active trader to play that strategy, not a long term portfolio strategist like myself.
Thanks for the reply, but IMHO, a strategy that has been successful over the past 2 years (if in equities), is suspect going forward. The rising tide that has carried all ships can only rise for so long.
agree, except that strategy is based on fundamentals and has been working for over a decade, I simply put it on monitoring for the last 2 years, under different market moods. In a market crash scenario, the strategy would be deadly, and would require to put more money at risk to benefit from a rebound. Like I said, not for everyone, and those types of risk have been clearly identified over the last 2 years, yet they were difficult to measure and to be apparent across testing it in a time series. I thought about using Options, and did a test run with them. It failed miserably because the bid/ask spread on the Options were too big, and when there were big short term swings, the options would simply crash hard with no bid/ask. The Theta bomb is actually the biggest risk as timing rebound is near impossible, yet the options value will decay with time.
You hold stocks for 12 weeks and generate a 50-100% return with a possible 50% drawdown? And the option bid/offers and the theta make buying the delta through options unprofitable?
If it's based on fundamentals, how do you know it would have performed well the prior 8 years before live trading? Do you enter trades on technicals?
It's basically a portfolio of "neglected" securities that get "discovered" so that's how it goes, it's working nicely over the long run but it's just that I don't have the stomach for it for the strong short term swings and that's where the money is, the short term swings with fundamentally strong companies. I am monitoring the latest batch and it has done splendidly, but I can't help thinking you need to be a very active trader to play that strategy, not a long term portfolio strategist like myself.[/quote] did you look at the flip side of this scenario where this looming debt noose on the banks will make the non neglected, over inflated stocks sink like a rock as a hedge
I am looking for someone to trade the strategy, not monitor it I am giving him a list of monthly candidates he needs to buy and hold (1 to 4 months, depending on market conditions bear to bull) The trader simply sends me his reports of his actual trades, The capital is his and so are the profits, I am not asking for any cut or profit sharing, if he feels the strategy is successful and fits his risk profile, we will negotiate later some kind of fee, depending how successful and risky the strategy is when he is doing the trades,