SPY Progress Report

February 14, 2016


$ 1 million invested….decision to Hold at December 31 close……….Now worth $915,500……Unrealized loss   $84,500

$ 1 million invested….decision to sell on December 31 signal……….Now worth $983,500……Unrealized loss   $16,500

Difference            $68,000

Warren Buffett has said ” Unless you can watch your stock holdings decline 50% without becoming panic stricken, you  should not be in the stock market.”

This is the reason why my serious money is in a passive index ETF .

Why did I leave  the market at its open January 4, my first opportunity to respond to the  December 31, SPY sell signal ?

Two reasons…

#1 Well before December 31, when I made the decision to trade market trends, I knew my purchase  timing would probably miss market bottoms, thereby  sacrificing some potential upside profits And, I knew that I’d probably leave profit on the table by leaving the market too soon. Bottom line I had to choose between hitting for home runs or for on base percentage.

I chose  to hit for percentage out of respect to Jesse Livermore .  ” No one ever went to the poor house taking a smaller profit “

# 2  I needed to find a trend trading model that wouldn’t involve me in many trades because the more I trade, the more I want to trade.  I suppose gamblers can relate to this.  So, I  did a lot of back testing and found a model that had only 7 trades since January 1, 2000.  

Five of these seven  trades were winners. Of the five profitable trades the median profit was 20.57% and the median loss was 3.59% for the two losing trades. .  Average days in winning trades 546. Average days in losing trades 31.  Total profitability Model 275.2% …Total Profitability Buy and Hold 82.7%.

I will re-enter the market with SPY when its month end closing price is higher than  its  200 day simple moving average price.

That’s all I really need to know….although I want to know more and continue to investigate everything from Moving Average Crossovers to the relationship of GDP to National Debt.  Its fun to predict, but I believe predictions are way more risky than simple trend following..

For me, the subject of finance and investing is a jigsaw puzzle with no outside borders.

Richard Maurice Gore

One Response to “SPY Progress Report”

  1. Dale Says:

    this is a test comment to see that comments are working.

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