Outperformance Continues, OPNewsletter Nov’12 +10.4%
Published on November 17, 2012
Published on November 17, 2012
During the past few weeks, markets have pulled back sharply resulting into two 90% down days during past 2 weeks (first since Jun’12). The story stock continues to be AAPL which has lost almost $180 billions in market cap since Sep’12 high.
For the OP Income Newsletter, Nov’2012 portfolios delivered +10.4% on maximum of 45% capital employed based upon OP Capital allocation principles in line with risk/reward. This excludes all the results from OPNExtra! Trades e.g. GOOG (+100%), AAPL (+40%) and CTXS (Breakeven to -30%). If however, a benchmark is chosen with an assumption of 10% per trade, the Nov’12 results will be inflated at roughly +20%. We were already anticipating coming volatility in the markets and thus were cautious in terms of investing. The vol indicators triggered sell signal on Oct 22 and since then there hasn’t been much of the improvements.
If you missed posts during the past few weeks, you may want to read how investors may confuse luck with reality, or how they miss a key concept i.e. probability vs certainty when dealing with investment profession. You may also want to read about a framework to review if your trading approach is still working.
We traded our traditional non-directional income trades; But I reduced earnings related trades this quarter. We only traded LNKD, JCP, AKAM, UPS and CREE and SWKS and except of SWKS (lost 2-3%) all other were successful. Using a traditional approach there were many more companies which would have qualified for trading earnings, but with additional research parameters I could hardly find good trades this quarter. After analyzing almost 40,000 data points through my earnings model this quarter, I could hardly find any good pre-earning trades from risk/reward/effort perspective.
This month has been another good test of OPN Income trades. The OPN Income approach has been tested by various market conditions since 2007 and it is still delivering consistent realistic results that are scalable for retail investors.
As shared with OPN members, I have developed some models for finding option price dislocations and hope to use those for developing trade ideas that can be shared with those members who can day trade. GOOG trade was one such example (that delivered >+100% gains yesterday). There are a lot of things happening in the options markets, get ready for more innovations, and hence more options/flexibility for retail investors/traders.
We are primarily trading VOLATILITY and NON-DIRECTIONAL income trading strategies. The key objective is to preserve capital while gradually building gains as oppose to trading in hopes-n-dreams and lose capital. Subscription are currently open and there is no wait listing fee. The objective is still the same as it was 60 months ago i.e. 5-7% monthly gains on invested capital. OP Income Newsletter is NOT a GET-RICH-QUICK-NEWSLETTER. The market neutral and volatility strategies that we trade are scalable and diversified.
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