The Good Bad and Ugly Weekly Report Dec 24 2020

December 24, 2020 6 min read

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It was one of the more dramatic weeks where the markets cracked hard in the beginning of the week after months of rallying hard and then making a dramatic comeback to a new high as swiftly

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 16.8L and for Model 2, where leverage is left to the user, NF has gained 2260 points and BN 6985 points per lot basis. Model 2 does better in choppy markets where part profit booking helps.

The Options4STAIRS models gained very good ground this week

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.

Options Buy models did quite well despite losing the major opportunity to capitalize on the sharp fall and reversal.

The sell spreads have also done really well this year given the passive nature of the strategy.

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 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.

For Monday 28th Dec 2020, the proposed changes are:

Mi_LT_CNX200   : 0 ADD, 0 EXIT
Mi_MT_Allcap     : 0 ADD,0 EXIT
Mi_ST_ATH          :2 ADD,2 EXIT
Mi 25                    : 0 ADD, 0 EXIT

For LIVE Products proposed changes
Mi25 : : 0ADD,0 EXIT
Mi30 : : 0 ADD,0 EXIT
Mi40 : : 2 ADD,0 EXIT
Mi50: : 0ADD,0 EXIT
Liquid bees is not being included as an add or exit.

The monthly rebalanced FREE smallcase NG5050 is a great starting point for a new user. This smallcase is a equal weight portfolio of the liquid Nifty and Gold ETFs by Nippon AMC. The smallcase is provided totally free and its performance over a longer period has been nothing short of spectacular. If you are not happy with your current funds, this is certainly something you should consider. This strategy has not seen a drawdown of more than 15% in the last 11 years.

The CAGR for this strategy is 10%+. It is a great replacement for index investors who have been experiencing single digit returns over a long period.

More details on NG5050 are available here

Our recently introduced Smallcase Mi _NNF10 is a 10 stock smallcase is based on finding momentum within the top 51st to 100th NSE stock by market capitalization. These are all liquid and large cap stocks. The strategy will have a monthly rebalance and will allocate 10% capital to each pick . At the end of each month it will rebalance into the 10 stocks for the next month. As of now the FY2021 performance is +47.87%

The strategy has been tested thoroughly over last decade of data and has beaten the benchmark in all respects over a medium and long term.

I believe this is a great passive strategy for folks who are wanting to diversify into index investing or are not satisfied with their current index investing. This can not only beat index returns but provide a much needed low cost experience of managing your own monies yourself.

 A detailed report on the first month performance was sent recently

More details on NNF10 are available here

In the LIVE product strategies,  there were minor gains 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.

Testimonial of the week.

An ex CFO of a large energy firm wrote very eloquently about the methods of weekendinvesting…


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    The Good Bad and Ugly Weekly Report Dec 24 2020