|
Small Portfolio
|
XLU & IAU
|
19.69%
|
|
|
Sector
|
XLU
|
31.86%
|
|
|
Secular
|
IAU
|
7.53%
|
|
|
Large Portfolio
|
Date
|
Return
|
Days
|
|
RIMM
|
7/16/2012
|
141.93%
|
194
|
|
SEAC
|
9/25/2012
|
35.37%
|
123
|
|
CAJ
|
9/25/2012
|
7.56%
|
123
|
|
DDAIF
|
9/25/2012
|
13.70%
|
123
|
|
CFI
|
10/31/2012
|
41.17%
|
87
|
|
RE
|
11/26/2012
|
9.86%
|
61
|
|
CGX
|
12/12/2012
|
10.59%
|
45
|
|
OKE
|
12/28/2012
|
12.48%
|
29
|
|
HTSI
|
1/14/2013
|
12.16%
|
12
|
|
STRA
|
1/22/2013
|
1.19%
|
4
|
|
S&P
|
Annualized
|
6.91%
|
|
|
Small Portfolio
|
Annualized
|
11.44%
|
|
|
Sector Model
|
Annualized
|
18.14%
|
|
|
Large Portfolio
|
Annualized
|
38.21%
|
Rotation: selling STRA; buying NSC
This change is somewhat bullish, since NSC is in the
railroad industry, and may indicate a pickup in transportation.
One caveat is the fact that the sector model is in XLU,
which has a slight negative bias for the market. Utilities could be responding to a search for
dividend yields as an alternative to bonds.
There’s no way to know.
The market is wildly overbought, but such moves can last a while, and
timing is almost a useless exercise for most folks now that Bernanke is pushing
yet another round of QE through the end of this year.
My gut tells me to jump and run, but part of this open test
is to see the performance of the model in all market environments – which will
include a bear market whenever it does come.
So far the model is doing well, but doing well in a bull
market is the easy part. Holding your
own against a bear is quite another. We’ll
find out one of these days.
Quick note on position sizes and holding periods. The model is designed for positions no smaller
than 2000 dollars in a taxable account, or 1000 dollars in an IRA. Those are the EXTREME low ends for a position
to withstand trading costs in short term trades. Any position of lesser value should be held
long term – and we have not yet found the endpoint on long positions, so it
could be as long as two years a trade.
Tim
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