The Good Bad and Ugly Report 1 Jan 2021

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The liquidity keeps flowing in and the markets keep scaling new highs… The Nifty went virtually straight up through the week while the BankNifty gained first two days and then went sideways.

STAIRS our index trading product did well this week. The futures and the options models were in net gain though the futures models have not been able to break the profit range last two quarters. The Model 2 on futures have hit the high of the year as profit booking on half positions have been beneficial in these choppy moves.

There are two models to trade using futures. For Model 1, which trades at 3X leverage (you can easily trade at a lower leverage too if you like) , capital of 10L at start of the year is now at 17.6L and for Model 2, where leverage is left to the user, NF has gained 2382 points and BN 7416 points per lot basis. Model 2 does better in choppy markets where part profit booking helps.

The following are results at the end of Thu at the end of the CY2020.

The Options4STAIRS models which are a part of the STAIRS product also gained very good ground this week and below are the results for the calendar year ended 31 Dec 2020

Conservative option buying yielding 161.5 and 139% returns !! Have you heard this before ??

The Options4STAIRS works off STAIRS signal so that you only spend a few mins a day at designated time to look into the markets. No staring at the screen all day!! Our options strategies have broken the myth that simple strategies cannot yield results .
Below are the four models we are running along with the monthly returns on the conservative model basis.

Individual results for CY 2020 for the 2 models for Nifty and Bank Nifty

The key to all trading systems is to have a tight control over the position size and to reduce the same as we go into a drawdown. Many accounts which are not well funded will not be able to reduce position size and they should wait out or add funds. If you are unable to deal with the volatility which can happen to anybody, it is best to reduce leverage, reduce position, go from Model 1 to Model 2 OR move from futures to options.

Both these models (options buy and options spreads) above track STAIRS signal and have defined risk per trade. The Options4STAIRS has now made the STAIRS product accessible to lower capital , is risk defined and has better performance dynamics. For volatile weeks like these options models are easier to handle and trade.

More details on the options models are here
To subscribe to STAIRS click here.

The Weekendinvesting Smallcases gained handsomely this week. I am very happy that smallcase is getting accepted rapidly and a decisive shift happening in the retail mutual fund space. Investors are increasingly taking charge of their investments and getting better value for their money spent. The bang for the buck is certainly MUCH BETTER and the peace of mind having CONTROL in your own hand is incomparable.

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.

The ATH portfolio is now up 112% this FY AND up 517% since inception !

For Monday 4th Jan 2021, the proposed changes are:

Mi_LT_CNX200 : 0 ADD, 0 EXIT
Mi_MT_Allcap : 0 ADD,0 EXIT
Mi_ST_ATH :0 ADD,0 EXIT
Mi 25 : 0 ADD, 0 EXIT

For month ended 31 Dec 2020 a rebalance was done on
NNF10 : 1 ADD, 1 EXIT
NG5050

For LIVE Products proposed changes for week ended 1.1.21
Mi25 : : 0 ADD,0 EXIT
Mi30 : : 0 ADD,0 EXIT
Mi40 : : 0 ADD,0 EXIT
Mi50: : 0ADD, 0 EXIT
Liquid bees is not being included as an add or exit.

The selection of the smallcase can be based on
a. Sub Segment of the market : Mi25 for smallcaps, MiAllcap for all round diversification OR LTCNX 200 for large caps only
b. Activity specific smallcase like Mi LT 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.

More smallcases on existing products like Mi30 and Mi50 will be added soon along with new smallcases like Mi SWING

In the LIVE product strategies, there were good gains again and the strategies held ground well.

The LIVE products area more suitable for large portfolios who are not chasing high returns and want more mature and diversified lower risk portfolios. 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.