Here is a different take on the Markets.
I am pointing this out specifically to those medium-long term traders/investors who are fully dependent on the markets for their living and whose strategies only include buying. (Those who only go long)
I am one of you guys.
Mostly all of my strategies are on the long side. And I am a medium-term trader.
I hold my longs for at least a Quarter up to a Year.
I also include Fundamental Data in my decisions to buy a certain stock.
When I get my technical signal, I check the fundamentals. If they support further price appreciation, I buy the stock.
Now, the fundamental data that I have is from 2002. So I could only back test my strategies from 2002.
Guess what! I had varied success rate in many of those strategies. From 30% to as high as 60%. This is on Cash Markets. If I looked at the returns in the Futures markets, they were mouth watering . 3 of my strategies gave an average return of 150% of more. (Factoring additional capital requirement for MTM). I was over the moon. I couldn't wait to invest all of my capital into the markets, as soon as I got the signal.
Then, I happen to get my hands on the Sensex Data prior to 2002.
I tested all of my strategies (based only on the technical signals, since I don't have any fundamental data before 2002). They performed abysmally. I wasn't just losing money, my account would have been wiped out.
The period I am talking about is from 1994 to 2002. Sensex closed at 3346.06 on 24-Dec-1993. And on 31-Dec-2002, the Sensex value still was 3377.28.
Imagine someone who makes his living from Investing or even trading medium-term on the long side of the markets.
We had a similar period of stagnant prices from 2008 to 2013 where Sensex compounded at 0.71% for a period of 6 years.
You can argue that from 2003 to 2007, Sensex gave humungous returns. But from the POV of someone entering at the end of 2007, how would have he been able to make money??
My main strategy is buying Banks. Banks are a proxy to the Indian economy. You can even say, they are the facilitator of growth in any country. Luckily, Banking sector performed well during the period of 2008-2013. Based on my strategy, even if I had invested at the end of December, 2007; my Annual CAGR would have been 20% till 2013. Even though the Sensex returned only 0.71%.
When I looked at the period of 1994 to 2002, banks performed horribly, and not just banks. If you exclude the technology stocks, most of the Mid-Cap and Small-Cap stocks performed poorly.
SBI has never been a part of my portfolio. But I checked its prices from 1992 when it closed the year at 401. At the end of 2001, it was 172. The high reached in that period is 460.
I am completely lost here. I know that Banks will continue to grow. But they were also growing from 1994 to 2002. I fear what will happen if we enter a similar period. And not just Banks, other signals that I got, were also non-performing (ex of IT Sector)
I wasn't comfortable with short-term trading, So I took up Medium-term trading. And I have taken up Long-only strategies because all the strategies that I tested did not perform on the short-side. Some strategies kept me out of the Markets during big corrections. But I guess staying out of the Markets is not an option when you want to make a living from the Markets.
I guess my main aim in writing this is that I am looking for a Mentor. A Guide. Someone who has made his living by Long-only strategies. Someone who survived that period and is still active in the Markets. Someone who could share his knowledge with me. Guide me, educate me. I seriously doubt that he would get to learn anything from me. But if any of you guys could point out anything helpful.......it would be a life-saver.
I was planning to quit my job and take-up full time trading. Trading full time is what I want to do. But after looking at this, I seriously doubt that that dream will come true.
Help you guys! This is an SOS!:fatigue::annoyed::sos:
Cheers!
I am pointing this out specifically to those medium-long term traders/investors who are fully dependent on the markets for their living and whose strategies only include buying. (Those who only go long)
I am one of you guys.
Mostly all of my strategies are on the long side. And I am a medium-term trader.
I hold my longs for at least a Quarter up to a Year.
I also include Fundamental Data in my decisions to buy a certain stock.
When I get my technical signal, I check the fundamentals. If they support further price appreciation, I buy the stock.
Now, the fundamental data that I have is from 2002. So I could only back test my strategies from 2002.
Guess what! I had varied success rate in many of those strategies. From 30% to as high as 60%. This is on Cash Markets. If I looked at the returns in the Futures markets, they were mouth watering . 3 of my strategies gave an average return of 150% of more. (Factoring additional capital requirement for MTM). I was over the moon. I couldn't wait to invest all of my capital into the markets, as soon as I got the signal.
Then, I happen to get my hands on the Sensex Data prior to 2002.
I tested all of my strategies (based only on the technical signals, since I don't have any fundamental data before 2002). They performed abysmally. I wasn't just losing money, my account would have been wiped out.
The period I am talking about is from 1994 to 2002. Sensex closed at 3346.06 on 24-Dec-1993. And on 31-Dec-2002, the Sensex value still was 3377.28.
Imagine someone who makes his living from Investing or even trading medium-term on the long side of the markets.
We had a similar period of stagnant prices from 2008 to 2013 where Sensex compounded at 0.71% for a period of 6 years.
You can argue that from 2003 to 2007, Sensex gave humungous returns. But from the POV of someone entering at the end of 2007, how would have he been able to make money??
My main strategy is buying Banks. Banks are a proxy to the Indian economy. You can even say, they are the facilitator of growth in any country. Luckily, Banking sector performed well during the period of 2008-2013. Based on my strategy, even if I had invested at the end of December, 2007; my Annual CAGR would have been 20% till 2013. Even though the Sensex returned only 0.71%.
When I looked at the period of 1994 to 2002, banks performed horribly, and not just banks. If you exclude the technology stocks, most of the Mid-Cap and Small-Cap stocks performed poorly.
SBI has never been a part of my portfolio. But I checked its prices from 1992 when it closed the year at 401. At the end of 2001, it was 172. The high reached in that period is 460.
I am completely lost here. I know that Banks will continue to grow. But they were also growing from 1994 to 2002. I fear what will happen if we enter a similar period. And not just Banks, other signals that I got, were also non-performing (ex of IT Sector)
I wasn't comfortable with short-term trading, So I took up Medium-term trading. And I have taken up Long-only strategies because all the strategies that I tested did not perform on the short-side. Some strategies kept me out of the Markets during big corrections. But I guess staying out of the Markets is not an option when you want to make a living from the Markets.
I guess my main aim in writing this is that I am looking for a Mentor. A Guide. Someone who has made his living by Long-only strategies. Someone who survived that period and is still active in the Markets. Someone who could share his knowledge with me. Guide me, educate me. I seriously doubt that he would get to learn anything from me. But if any of you guys could point out anything helpful.......it would be a life-saver.
I was planning to quit my job and take-up full time trading. Trading full time is what I want to do. But after looking at this, I seriously doubt that that dream will come true.
Help you guys! This is an SOS!:fatigue::annoyed::sos:
Cheers!
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