Mi50 +36.4% – 3 changes

The week saw Mi50 loose three components. The gains in these trades were :

GALLISPAT 14.22%
KIRIINDUS 32.73%
SAGCEM 1.39%

The three added are

9/9/2016 JAYBARMARU 192.66
9/9/2016 SUBROS 134.95
9/9/2016 TORNTPHARM 1670.70

The stock Kiriindus was bought at 213 at end of Apr 2016. It went to a high of 405 and now it got sold at 283.  So majority of the intermediate gains were lost. This is the downside of a slow momentum system. A faster momentum system would have exited much earlier but would result in much higher trade frequency.  It is better to highlight the shortcomings of the system than the positive. Once we learn not to switch strategies because of an incident like this, we will do well sticking to our original tested system.

Anyways, Mi50 closed at its highest weekly close. This week it outperformed the broader index marginally. It closed the current FY at +36.4% vs 14.6% for NSE50 and 17.4% for CNX500.

image-2

image-3

The composition of win:loss for the portfolio stands healthy at:

All Wins Avg Losses Avg
56 33.49% 13 -4.60%

And those for the exits at :

Exits Wins Avg Losses Avg
7 19.58% 10 -5.41%

The components added are 2 in automotive and 1 in pharma.

image-5

With the markets having seen singular directional move last many months, we are mentally ready for some rough weather ahead in the month. It is always good to be cautiously optimistic.  A good friend taught me not to worry about the general market if your stock selection is sound and I believe if in addition to that if exit criterion is pre-decided and executed, there is no way we will lose capital.

Have a great weekend!

6 thoughts on “Mi50 +36.4% – 3 changes

  1. Hi,
    Does your system ever go out of the market completely ( not happened till now of course) and go into cash/bonds? Reason for the question being the inevitable fall in momentum that would occur at some point in time of the system. Thanks in advance for your reply

    Like

    1. A great question. Yes it is designed to move money to Liquidbees when spare cash is available. In second part of 2008 back-test it was almost completely out of market and it went into partial cash in 2011 and 2013 as well.

      Like

  2. Dear Alok,
    Just went through this Blog. Very good work. My only question is when selecting a stock for your system, do you look at fundamentals (e.g. Q earnings) at all? Or just technicals? If not looking at fundamentals how you make sure you don’t buy companies which is experiencing just a technical rebound in long term structural downtrend (e.g. Infra stocks from 2008) ?

    Like

    1. Thanks for your encouraging comments.

      No fundamentals in Mi50

      My recent tweets on 2 yesbank reports ( tgt 650 and 1590)from revered fundamental investors is the reason for my non belief in timing using fundamentals.

      If infra or anything goes up without fundas and crashes back it will be a small dent..after all allocation is only 2 pct….so all that is part of the game which is acceptable.

      In 2000 and 2008 stocks went up 1000 2000 pct and crashed. Mi50 would have minted in that scenario without fundamentals.

      The simulated 2008 drawdown for mi50 was 27 pct.

      Like

  3. Thanks for replying. So you do not make concentrated bets on 2-3 sectors but diversify among multiple sectors/stocks to hedge against Infra like sector down trend of multiple years good strategy. Without giving exact technical criteria is it possible to share parameters for selecting stocks? Also if you can give number of stocks you always hold ?

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.