What a crazy fist quarter it has been!
We cashed out our last set of winning portfolios back in September, as I did not trust the market into Q4 but the market kept going higher so we had too much FOMO (Fear of Missing Out) and we started playing again in October – albeit with much smaller amounts. Our Long-Term/Short-Term paired portfolios had hit $2.6M after starting at $500,000/100,000 on Jan 2nd, 2016 and it was becomming too difficut to hedge so I said at the time:
Hedging a $1.7M LTP would be very expensive and what if next time we didn't time the turn in the STP and instead blew the turn and lost money there as well as the LTP. Then we'd be back to $2M and needing to make 30% to get back to $2.6M and what if it's hard to make money next year or what if we have another crash and the market is down 40% – it's just too much to risk vs. putting $2.6M safely on the sidelines and simply looking for new opportunities.
Well, here we are, at the bottom of that 40% sell-off and, as expected, we're having to pull a bit more cash off the sidelines as some of our new portfolios got crushed. This is going to be an odd review because we made more than one adjustment in the past two weeks on some portfolios and I'll do my best to consolidate all the moves here. The bottom line is we got a lot more aggressive around March expirations (20th) and yesterday (23rd), as the market hit rock bottom, we went gung-ho bullish in our LTP and Butterfly Portfolios in anticipation of a massive Congressional Bail-Out Package.
Hopefully, that provides a catalyst to form a floor at the 40% off line and we can consolidate between here and the 20% off (the top) lines, which is where the market should be in the first place – the rest was just fluff – that's why we cashed out in September – at S&P 3,000!
Short-Term Portfolio Review (STP) (3/19): $282,168 is up 182% so…
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