There wasn’t too much Good about this week. The markets started the week with a sharp gap down and spent the truncated week recovering partly and then going nowhere. There was no real trend in the short term. The markets are fragile and are trading on lower volumes which each session being pushed up or down a few times a day as per the demand and supply rush in the markets. As result almost all long only portfolios bore some brunt and were lower from previous week. STAIRS the trading strategy remained Ugly with the drawdowns getting deeper and there being no sign of a contiguous trend yet.
STAIRS our index trading product has continued to take a beating in the last few months getting whiplashed by these sideways and indecisive moves.
The drawn down this week on the Nifty Models added more of it and all models were in the red. In the 4 weeks gone by the Nifty models have lost from near 19 %to around 26% of capital as per the pic below. The gains of the CY accumulated have been lost largely and the returns stand at -6% to +21%.
The STAIRS Bank Nifty models were not so bad and gained in the Futures while lost some ground in the options trade. In the 4 weeks gone by the BankNifty models have lost from near 9 %to 19% of capital. The gains of the CY accumulated have been tapered and the current returns stand at +2% to +27% as per the pic below.
The need of the hour is to stick to position sizing and not try to guess the next trade. If the capital falls below a threshold of min position size then one should sit out or add risk capital. Trend following is often subject to these severe drawdowns and we have to accept them as part of the process.
More details on the options models are here. Options are a part of the STAIRS program
We have released explainer videos on STAIRS on my you tube channel
To subscribe to STAIRS click here.
The Weekendinvesting Smallcases were all subdued this week on the corrective phase in the markets. The smallcase products are all long only products that invest in various subsegments of the markets but have the momentum theme underlying in all of them. The strategies will pick strong outperforming stocks and remove weak ones once a week.
These are all long term strategies that will create enormous wealth in each upswing and then maybe give some back in the downswing and repeating this process again and again achieving the compounding effect. With patience and grit to follow strategy over ups and downs over the last nearly five years it has been shown that much superior CAGR returns are possible than the benchmarks.
FY21 has been phenomenal and I will let the numbers speak for themselves. A consolidated FY21 report is here
For Monday 19th Apr 2021, the proposed changes are:
Mi_LT_CNX200 : 0 ADD, 0 EXIT
Mi_MT_Allcap : 0 ADD, 0 EXIT
Mi30 : 0 ADD, 0 EXIT
Mi50 : 0 ADD, 0 EXIT
Mi_ST_ATH : 2 ADD, 2 EXIT
Mi 25 : 0 ADD, 0 EXIT
The selection of the smallcase can be done based on
a. Sub Segment of the market : Mi25 for smallcap, Mi_All_cap for all round diversification OR LTCNX 200 for large caps only
b. Activity specific smallcase like Mi ST ATH which chases all time high stocks
c. Or more passive strategies like NNF10 and NG5050 which are monthly rebalanced ones best to replace index investing with or for asset allocation.
d. More diversified smallcases like Mi30 and Mi50 that suit portfolio size of 10L and more.
All details on these products is available at weekendinvesting.smallcase.com
In the LIVE product strategies, there were mild losses along with the fall in the markets. The LIVE products area more suitable for large portfolios and those who have broker accounts that are not synced with the smallcase platform. Also the user here churns his portfolio at Fri 3 PM along with the model and there is no slip between the model the actual experience. The back end task of manual execution and record keeping of course is an additional chore.
For LIVE Products proposed changes for week ended 16.04.21
Mi25 : 0 ADD, 0 EXIT
Mi30 : 0 ADD, 0 EXIT
Mi40 : 0 ADD, 0 EXIT
Mi50: 0 ADD, 0 EXIT
We are rewarded every week by our users with heart warming testimonials. Some of them are reproduced here
This was the best feedback this week… somebody getting plasma within hours of a tweet …The real power of the network got displayed there ..this was over whelming for me.
That is all from my end for now for this week. The virus is still out there. Do take care of yourself and your loved ones. Please abide by the administration guidelines. We are all in this together..