Wednesday, 24 July 2013

Nerves of steel

However much backtesting I do, however hard I think about what I should buy or sell, however well I kid myself that I understand market timing, at the end of the day I trade (or invest if you prefer the grander term) with my gut. If I seem to get it right straight away, I pat myself on the back. If it goes less well, fears bubble up and the steel in my nerves gets tested. (How I love to mix those metaphors!)

And that’s how it’s been with THT. It was when the loss got close to 20% that I finally decided that my old stop loss, developed soon after I started playing the game all those years ago, might work with my new share picking system. I had chosen 25% using crude backtesting methods that are no longer available to me. So I held on to THT as it continued to fall and it’s now starting to move back my way. White knuckles start to feel blood beginning to circulate again. 

I said that backtesting is not a panacea but its shortens the odds no end.

Despite this improvement my UK portfolio continues to disappoint. Now GLE and SDY are beginning to look dodgy. Oh well, no point fretting. Overall conditions appear benign so I’ve added LLOY and SIV to my portfolio but after the best part of three weeks I’m still over 2% down (after costs).

UK bad US good

In rather less than a week,my US portfolio is showing a 3.7% return. LEE is up 28%, SOL 20%, and HSOL 18%. Only EVC is causing concern. I have spent all of my US$s having added COCO an LFVN to my selection. This contribution from across the Atlantic has started to make decent inroads to my accumulated losses from follies in gold and the like earlier in the year.

You see what I mean about nerves of steel. Starting in April I made some duff choices. If I had allowed them to cloud my judgement now I would not be in the position to start clearing up the mess.

I need to revisit my recent decision to restrict my ISA investment to the UK. (You’ll have to go back a few posts to see how that idea has swung back and forth).

For now I’ll keep hoping that things continue to go well and that my hard work, researching strategy, continues to pay off.

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