Trader of stocks, ETFs, futures, and options for 25 years. Now mostly trading futures (stock indices, metals, currencies, grains, softs) and short-selling options on futures to collect premium based on my proprietary models that indicate if I should go long, short, or stay out of each commodity.
BS Caltech 1976, PhD Stanford 1980 in Geophysics.
I am Australian by birth and citizenship, but I have been living in China since 1998.
I started investing in stocks in about 2001, experiencing a taste of, but not the full wrath of the tech crunch. From 2001 to 2011 I followed a small selection of mechanical investing strategies based mostly around growth or dividends. The market was good to me during this time but my recent analysis shows that it would have been a lot better had I paid more attention to preservation of capital in 2008 and 2011.
My current investment strategies are coloured by my belief that we are in the concluding phase of a 13-18 year secular bear trend that will probably be broken and become a similarly long-lasting bull trend sometime before 2019 (my gut feel is sooner rather than later), but that the market will have one more try to wipe us all out between now (2012) and then. As such, I am looking to:
a) Preserve my capital over the next 2-6 years and if possible make some gains. Risk management is king.
b) Learn as much as possible about the market so that I can take full advantage of the next bull market when it comes.
c) Practice my trading technique without necessarily becoming a trader. I expect this in the short term to cost me some money, but education always comes at a cost.
I currently have several strategies running in parallel in my portfolio. Chief among tham are:
1. Dividend stocks. Looking for low volatility and risk coupled with good sustainable dividend yield. Return driver: the ability of good companies to make money and return cash to shareholders.
2. Broad market trend following. Return Driver: You don't need to be able to predict the market in order to outperform the indices. All you need to be able to do is know what direction the market is moving in *now*. Aside: That is plenty hard enough.
3. Sector timing. Return Driver: there is almost always a bull market in some industry sector. You just gotta find it.
4. Global Market timing. Return driver: There is almost always a bull market somewhere.
5. Commodities timing. Return driver: There is almost always something that is getting more expensive or getting cheaper. Keeps me watching the global macro economy.
6. Bonds. Sovereign debt, corporate debt, municipal debt. Market Driver: through careful selection of average duration, fixed income investment can both reduce risk and improve overall returns of a portfolio.
7. Mortgage REITs. Return driver: yield curve carry trade.
8. Mechanical growth strategies like CAN SLIM and Piotroski strategy.
9. Playtime. 10% of my capital is devoted to trying things out. Stock picking, options plays, technical trades, you name it. Return driver: this is what keeps me interested. This is what keeps me reading. This is what sharpens my analysis skills. The extra risk I take on here stops me from going to sleep at the wheel and pays off through good management of the other strategies. Things that work can be promoted to strategies.
10. Real estate. I am way overweight Australian residential real estate. Currently trying to fix that, and move part of the proceeds into agricultural land (food will be the hot commodity of the next 10, maybe 50 years.) and another part into strategies 1-8.
other part into strategies 1-8.
Started studying charts 10 years ago during my "free" time (remember that?) - had the "aha" moment... - and keep learning from it as time passes. Social Security and 401K's aren't gonna cut it probably and nothing's getting cheaper. There is a flow in any market - we are here to monitor the flow - the roller coaster - and it's fun after you learn not to get burned. BTW - you will get burned once in a while...