In 2024, we have performed pretty much how we had hoped to perform in a worst case scenario. Playing our bets conservative, since we believe that a stock-market bubble began in November of 2023 (as we have outlined in previous entries).
The best case scenario was that we were hoping our short-term trading would have performed well with a few simple trades. And thus carried our other two programs (Equity Fixed Income Hybrid Core Program and our Long-Short Valuation Program) higher still. But we received a ‘worst-case’ scenario. Wherein the few short-term trades we placed did not perform as well we had hoped … but we still managed to deliver linear returns, beating the risk free rate and thus preserving and growing our capital; in what we feel is an insanely overvalued market …
Not a bad year. But not a ‘fantastic year’ either.
In a few days time, once we officially arrive at the end of December and 2024, we will have the GTC Sample Portfolio page updated with the exact returns for the year along with the assorted performance metrics. We do know up to this point we’ve grown the account by nearly $7,000.00, with $4,417.00 in growth; and in 2024 have generated an average of approximately $17.94 in Monthly Income on what is a very tiny account. And although we are keeping that income in the portfolio as part of a synthetic-DRIP … even that small income from the Fixed Income side of the portfolio still covers the more than reasonable cost of our “Read the Report” premium service.
And we did this in real time, announcing every move, as we made it, including the losses.
That was 2024. What about 2025?
Looking Ahead to 2025
Well, in our “Read the Report” premium service, we will continue to announce every move, as we make them. Option Trades, Relationship Trades and Directional outright trading. Wins, losses and ‘scratches’.
Very obviously, we still feel the market has begun a Bubble, with A.I. leading this systemic move higher in equity prices. And inflation is still a problem. As we have said in past articles, the entire trick in a bubble is not to short it too early and thus get run over as ones did in 1997, 1998, 1999 and in 2000. To make sure we do not style-drift, and thus print consistent gains.
The Equity Fixed Income Hybrid Core Program will take care of itself. We have only purchased half-sized positions, and do not have all of the positions on at the present time (we only have 13 of the 18 positions). There are a couple of scenarios wherein we think we would purchase the other 5 positions, but that time is not now. We will simply continue to collect the dividends, count the capital additions, and hedge when appropriate.
The Long-Short Valuation Program will continues as it has. With our belief on the Indices, we are only interested in shorts against the Indices. But we are not stupid. We are not going to short a market and get run over as the Indices move higher, unless they first show us some preliminary weakness. And in the meantime, we still need to print positive basis points. So we are currently running and will continue to run a “Neutral-Carry-Short” Program at 100% in this account in 2025. Rates are decreasing as we speak (which we feel is a policy error on the part of the Federal Reserve) and should this continue, we may adjust what we use as a ‘carry’ position in the future. You see, there are a few things we can run as a ‘carry’ in this program.
We will attempt to keep printing positive returns each month as we have been; but the future will tell with how successful we are in doing this.
So what about the Short-term Trading portion of our portfolio?
We actually are going to look to run this side of the book a tad more aggressively. Not overly so. But slightly more than we did in 2024.
If there is one mistake I think we made in 2024, was playing too few positions, too sparingly.
We would attempt a trade. Some of those trades were profitable. But some did not work out and we would then we spent the rest of our time making sure that we tried to print a positive month; while weighing the trading performance against the rest of the portfolio to make sure the returns stayed above the Risk-Free-Rate and maintained linearity.
Mind you … this did work. So I’m not sure it was a ‘mistake’ as much as I would argue it’s merits from the standpoint of making sure a newer portfolio track record maintained linearity and positive Sharpe. So for the context of where the portfolio was at in terms of it’s history? I think it was the right move.
But at this point? We have the entire year of 2025 in front of us in terms of a runway; and we have all of those positive returns underneath us. So we are going to run a few more trades this year, and we will be introducing another one of our multi-day trading programs to the mix that will give us a few more trades.
So premium members can look forward to ‘the look over our shoulder’ as we trade a ‘tad’ more actively.
We will have more to say on all of the above thoughts in coming days.
Until then? Stay safe … and trade well.
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