Wednesday, November 02, 2005

October Performance Review

Overall, I was pretty satisfied with my performance this month. Although there was a lot of volatility in the markets, I thought I played it almost perfectly, as I anticipated most of the moves ahead of time. Ever since I opened my TradeFreedom account on Oct. 13th (which was coincidentally the market bottom), I made 9 US trades in October, with 7 of them successful (success rate = 78%). Although this is a high success rate, I was still quite disappointed in my 2 failures.

One of my failues was my CCJ (Cameco trade). In my Canadian account, I had just sold a CCO (Canadian version of Cameco). The very next day, Cameco dropped (right after I sold it), and I foolishly bought it with my US account. This was a very bad move because there was absolutely no signs that any bottom was reached. The reason why I bought it was because I really like Cameco, so I showed bias in my trading.

My other failure was my QQQQ trade. Before I made that trade, I knew the nasdaq had short term topped. 2 days after I made that assessment, the nasdaq consolidated flat, so I thought the consolidation was over. My bad move came in buying QQQQ instead of GOOG, which I was tracking heavily at that time. The reason is because I like buying leaders, and GOOG was the leader. ALso, I do not buying indexes, because I believe I am buying a lot of bad stocks when I do so.

But overall, I was really pleased with my performance, as I netted over 6000 USD in October with my US account, which isn't bad since I only invest 5000 max at any given time.

With my Canadian account, I was pretty satisfied also. As you can see, I only traded Cameco. Since 9/20, I traded Cameco a total of 6 times (including the position that I still hold today). All of them have been successful, for a success rate of 100%. I was really happy with this because when I traded Cameco long, Cameco was in a downtrend. One of the reasons why I think I am so good at timing Cameco is because I know the stock (not the company) really well as this is my most closely followed stock.

I also bought a Fording Coal (FDG.UN) long position in October. I plan to hold this long term, although it has fallen from my entry point. The reason is because I believe in its fundamentals, and because I like its dividend (18%). In fact, I like FDG.UN so much, that I bought it for my parent's portfolio today at a price of 38.00 CDN.

As I have stated many times since the bottom on Oct 13, 2005, I expect the markets to rally. However, I do not believe this rally will last long, because I think we are currently in the "eye of the storm". Things will be rosy for a while, but probably by the end of November, I expect the rally to end as the US will plunge into a deflationary recession. The reasons for this has been stated in my previous postings.


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