2008 Performance

Here is a chart of my account from my broker’s website. I am the green line, and the S&P 500 is the blue line:

That’s my large retirement account. To be exact, I was up 43.63% during one of the worst years in history. In my smaller taxable account, I was up 50.10%. I don’t have a chart for the smaller account because it lived at three different brokers, but I imagine it would look about the same as the chart above.

Notice that my high-water mark was around 73%. That peak was on December 1st, which was one of the largest percentage drops in stock-market history. I saw it coming. I was massively short. I had absurdly huge profits on that day, but… I failed to ring the register. I studied the volume to see if the decline would have legs, and it was a toss-up. I decided to stay short, and that turned out to be the wrong decision. The moral of the story is that when you see gigantic profits appear in your account, it’s almost always a good idea to take them.

Also note that my performance flat-lined during the last two weeks of December. That’s because I was in cash making sure to lock in my bragging rights! And it was worth it! Look how much fun I having now!

Needless to say, in my first year of full-time trading, I have crushed just about every mutual fund, hedge fund, and legendary investor in the world. Here’s a quote from Bloomberg:

“Just six of the 1,611 U.S. mutual funds that invest in stocks and have more than $250 million in assets gained in 2008, according to data compiled by Bloomberg. Among them is Grantham Mayo Van Otterloo & Co.’s $2.04 billion GMO Alpha Only Fund, which returned 12 percent.

Jeremy Grantham, who helps oversee more than $107 billion as chairman of Grantham Mayo, in January recommended shunning stocks and holding cash because of the burgeoning crisis. Dubbed a “perma-bear” for his dour view on U.S. equities for more than a decade, Grantham correctly predicted the crash in technology shares two months before the bubble burst in March 2000. “

Note to Jeremy Grantham, Ken Heebner, Warren Buffet, Ben Bernanke, etc: I will give you lessons, but its gonna cost you! You could all fly over to my place in one of Ben’s helicopters filled with freshly printed fiat money!

17 thoughts on “2008 Performance

  1. Matt, why do you think you need to learn EW? To me it’s a theory that explains everything in hindsight. But maybe I’m missing something here. ❓

  2. Dressguard. it never hurts to learn. if so many people are using it then it might be a factor. just my -2cents

  3. Dressguard,

    My philosophy is to look at things from as many angles as possible. For example, I have 32 different SPX charts that I study each day. EW will give me more angles. Also, don’t forget that ace trader Alan Farley, who rang the bell at the top of the March-to-May bear market rally, uses EW.

    Matt

  4. Congratulations Matt!

    It does my heart good to see that kind of performance. Hopefully, that’s in my near future.

    I didn’t do near as well as you. I was right at 22%. Mind you, that’s almost all scalping, which means most of the time the bulk of my funds had no performance. That’s why I need to change. I’ve already put a new plan in place that should help. I’ll get there with something that maintains reasonable risk. For example, I’m not taking advantage of compounding the earnings, nor am I adding to winning positions. Those types of things make huge difference. Lastly, I need to put more of the funds to work simultaneously.

    I’m not complaining. According to your Bloomberg article, I certainly did better than many of those fund managers and the ~1% MM funds. I can imagine the pressure they are under with the restrictions they have to follow. However, I got my scalping idea from a Quant fund in Denver who scalped with over $300 million with yearly gains of 15-18%. So it can be done by the bigger players.

    But it’s not all about the profits for me, and I’m sure others – it’s the accomplishment, strategies, and fun.

    Stock trading = priceless.

  5. Dressguard;

    Re: “This is exactly what we call slippage. Now you know, George.”

    Now I know, indeed. I learn something every day. You just made my day.

    Thanks

  6. Thanks Matt.

    Another stat – I had NO losing trades last year.

    I understand that folks would think I am BSing, but it’s true. I tried to see the types of stats my broker keeps for verification but unfortunately, my broker doesn’t have win/loss counts or anything of value I can publish. I have that information in a spreadsheet, but that could be phoney, too. So, at this point it is an unsubstantiated brag.

    All is not perfect in paradise: I did have a few drawdowns, but I was able to either trade out of them (using mirror stock and/or corrections) or recognize they would turn around based upon the position of a higher time frame stochastic. Drawdowns are inevitable with core positions at times. On the blog, I showed how I was down in SKF, traded the corrections and came out with a profit (in fact, that was right before SKF went to the moon).

    Alas, in the end, it is mostly LUCK.

  7. George,

    You make a lot of good calls here, so I know it’s not luck. 🙂

    Also, trading through this year’s historic volatility was no mean feat. Very few traders came out the other side of that meat grinder in one piece.

    Matt

  8. hi all, happy new yr again.
    George, from a previous thread, re slippage, I’ve noticed on another chat board several posters saying that SRS seems to underperform relative to the correlating long ETF. I trade in Canada, and hou.to (double long on crude) had a decent day on Friday but didn’t seem to go up 2 x crude, or 2 x USO. I have some trouble understanding these things. How could we know what to pay for them i.e. bid/ask vs intrinsic value and are we trading ETF’s with each other or the sponsoring firm ?

    Matt, congrats on your terrific #’s. Does sentiment trader examine results from following different indicators ? Can a person make $ simply by following the indicator you think is best (stem mr)?

    thanks

  9. Matt, congratulations, you killed it in 2008. I recently decided to trade full time. Hopefully I can manage a 43% return in my first year as a full time trader.

  10. Congrats and Happy New Year to Matt and everyone on this fine blog! I’m up 12% this year trading on average once a week. The biggest losers were mostly in OTM options. Have to stay away from those in the future. The biggest compliment I can give to Matt is his ideas helped me get an edge.

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