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Congratz on the month and good luck with the self managed strategies….. I’m certain they’re in good hands!
Nice to see you’re also holding $CU6.au….. It’s been on a cracking trend…. I’m also holding it in WTT and LSS
Sean Murphy post=14766 userid=5450 wrote:This is a big outcome from me starting the mentor program Glen. I may not be a whiz at strategy building, but the bones are there!
I would argue you’re ahead of 99% of the other punters out there…… Strategy Whiz or not….
For the sake of completeness and as a reminder to myself, I’ll include a chart of the recent 5-year performance of our exited managed fund.
From July 2019 to June 2024, the managed fund had a total return of 3.4% compared with the All Ordinaries Accumulation Index return of 41.2%. For the fund, the bulk of the returns were derived from dividends, which were reinvested, despite it being a ‘growth’ fund.Five years from now, I will enjoy looking back at this point, and seeing my equity curve trending above the XAOAI.
So ends the first month of the new FY. It marks the second month of operating a suite of strategies across the AUS and US markets. The focus of the month has really been about making sure my processes were in place and executing. The start of August looks a bit bumpy, did someone mention Murphy’s Law?
I’ll try reporting my strategy performance like this.
A hold my breath sort start to the month. When the volatility began in early August from the unwinding of the so-called Yen-carry trade, for me it was my first big test to stay true to my systems. I had to trust that if a large correction was to unfold, the systems would exit in due time, and my portfolio would be spared the worst of it. If so, we would rebuild when the market was ready. So, it was a good learning experience for me to hang tight and ride the wave. I’m glad I did. All’s well, no harm no foul, carry on. With the volatility for the month, I was surprised at how few trades my ASX MR#1 system took, just 10. Of these, 7 were opened in the first 2 days, and 3 in the last 3 days of the month. The uptrend condition for individual stocks prevented entries. The open trades are all showing a profit, subject to closing them out today, Monday. Elsewhere, my ASX growth took a fair hit. Exits, triggered by earning reports in the early part of the month, did the most damage.Looking at the relative performance of the different strategies across the US and AUS markets, I am starting to see the material benefit of the strategy diversity. Net result for the month down <1%.
A full house of green is nice to see. I’ll take that. Interesting coincidence that both AUS and US results for the month were the same.
I have another decision to make, but I’ll put that in another post.
Another month in the green, for all strategies bar one: the ASX MR#1.After 200+ trades in the MR#1 system, including a revision after 100 trades, I’ve come to the conclusion that its not possible to reliably trade the strategy. The differences between backtest and livetrade were insurmountable. The result on a handful of trades destroyed the profits that I had steadily amassed. Two positions gapped through my exit price forcing me to chase the exit, and so considerably underperforming the backtest. A third, failed to get a fill on what turned out to be a solid profit. A fourth, I elected not to take the trade because of media attention on the stock, but it too turned out to be a highly profitable trade in the backtest. And, a fifth, went south on media speculation about the CEO, resulting in a disproportionate loss. So, what did I learn? I learnt that just because a strategy appears profitable in backtest, it is not necessarily profitable in live trade. Liquidity and price volatility on the ASX can work against such a system. I developed a better understanding of MR systems, and how they operate. I patiently executed 200 trades, giving the system every chance to be profitable, got a good sample of trades to assess expectancy, from which I could conclude to park it. Perhaps an indicator that the system was not a good fit for me was the angst lurking in the background each time I sought to exit positions; would I get my exit at the open or not? I tried several different approaches to exit, including hidden orders, but there was always concern that I might not get my exit. Where to from here? I will reallocate the capital to another strategy in the US market. Doing so will bring my allocation a step closer to 50:50 ASX:US markets.Onwards.
Well, that was a good month, with total account up 7.7%. A raft of positions popped across multiple strategies, compounding returns.
For what it is worth, since converting my managed fund over to these strategies, my equity is up ~16%. By comparison, the data for the fund shows a rise of ~2%. The fund manager continues to execute, in their words, “a highly strategic sell down” of its 25-30% holdings in BBOZ and SPXU. This comparison vindicates my decision to learn the tools of the trade to self-manage, haha. Thanks Nick!
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