I got a 6,5% Drawdown!!!

Hi, just to share some pain, I got a 6,5% DD… still up 12% for the year. How about you?

Regards
Andreas

Do you mean this week 6.5% or this down turn? I remember you said you had 4% lost last week.
I’m 1.5% down this week. About 23% in cash starting from Monday.

gs3

Well, I just started my first model a few weeks, maybe month, ago, but yes, down about 6.5%. It’s a small cap model and things just started going wrong from the get-go. Luckily I had some nice earnings report pops in my non-quant investments, to help offset, but, yes, ouch.

For the last 4 weeks live trading results as reported by P123:

The Best:
VIX trader +3.8%
10 position CEF’s +0.4%

The Worst:
Mean Reversion -7%
DM subscriptions -4.5%
40 pos small cap -2.5%

The small cap draw down as reported by IB is less than 1.4% because I am only 55% invested in that port.
Today I re-animated my short CEF port, it does well when things go bad.

Where’s the “Threat of Nuclear War” factor in the Custom Series options? :slight_smile:

Andreas, I’m down 6.9%. We haven’t had a 20% drawdown for awhile so this and more is to be expected.

Hold onto your solar eclipse glasses: good for viewing mushroom clouds too.

But seriously, I was asking myself this question this morning: If we do not happen to have a nuclear conflict what will the recovery in the stock market look like? For example, what stocks will lead? Will there be a treaty or something or will we just gradually forget about it with new worries taking its place? Again, assuming there is not a nuclear explosion.

-Jim

If you think it’s comparable to the Ebola panic of October 2014, it’s going to shoot right back up. I’m generally of the theory that unpredictable one off events like this do not create bear markets, only macro ecnomic downturns. However, that doesn’t mean those risks can’t happen simultaneously.

It’s funny though, I used to wonder if I would stick with my ports if an 9/11 caliber event happened, but now more than ever I cant imagine leaving them precisely at those moments. It’s like a sailor throwing his map and compass overboard right when the waters get rough. It’s not really the the sharp downturn that would test my resolve, it would be more like 2000-2003 downturn where you just grind away with bad returns day after day.

This is the dumbest nuclear war threat playing out on TV in my opinion. It doesn’t make it any less serious or pleasant for that matter. I just find it dumb that North Korea explicitly declares on TV that they’ll attack Guam (or test missiles close to there) mid-August. This dog’s bark is worse than its bite. You wouldn’t really declare your secret war plans on national TV now, would you?

<<will we just gradually forget about it with new worries taking its place? >>

I think the market will just gradually forget about it with new worries taking its place…

But one other scenario is that it’s the world’s greatest open secret that the market is overvalued. Can this political theater precipitate a correction? We’ll see…

My drawdown is 7%, and it started way before the N. Korea situation. My all-time high was reached on July 20 and it’s been steeply downhill from there. I take comfort from a few things: the drawdown for IWC (the microcap ETF, the closest benchmark to my portfolio) is almost as bad and almost as long, I’ve been through worse drawdowns, my one-year return is still 61.5%, and my YTD return is still 29.5%.

My comfort is in this thread, because there are people here smarter than me that apparently going through the same thing I am, so I must be doing something right :slight_smile:

yes, totally normal DD, just wanted to share the fun… :slight_smile:

steep…


the really good thing about p123 is, that you can analyse the dds (simulated or real): here 2014 DDs from my system


and 2013

(all without hedge)


In DDs phases the real investor trader comes out, do you got the nerves? Do you still follow your system. The really good thing with p123
is, that you can analyse the DDs of the past and try to find out, if the current DD seems to be normal. Another thing I got from value
investors is, that one told me, that he does not care about price but value, and he is delighted to have stocks that have great value and have more
value in a DD.

Aösp very important is, that you can share the pain/fun here on p123 and also by phone by calling up investing / Trading buddys.

How do you cope with a DD?

Pretty good stuff:

http://ciovaccocapital.com/wordpress/index.php/stock-market-us/is-north-korea-the-bear-market-tipping-point/

Of course, the best thing to do is just turn your back to the market and don’t pay attention, but I’ve never been able to do that. So one little mind trick I use with my non-P123 allocated money … I keep a list of longterm buy and hold stocks that I’ve kicked myself that I never bought. Maybe I just couldn’t get them in my price target range. Or was just about to buy them and they suddenly gapped up on me and never came back down. Just for whatever reason I never pull the trigger on it, and it’s just always bugged me as I’ve watched it go up and up. So when the market is going through a big drawdown pain, I put in a Good Until Closed limit orders on my target list at just some crazy discount price that I would be doing handstands over if I could get a fill. Suddenly my brain just get preoccupied on getting that limit order filled to the point where I’m cheering for the market to keep going down, and I tune about the broader pain . Probably 9 times out of 10 I never get the fill, and really this is just side/gambling money that my financial future really doesn’t depend on, but it keeps my preoccupied and doing something reactionary and stupid with my overall portfolio.

I think that is what Buffett is doing right now with his $100B. He is waiting for the market to drop and a call to come in from a seller…

I had a 4% DD, not the easiest to cope with as portfolio size increased over the years and now this represents a 120K drop in just a few days…
My strategy: I hold 7 % cash with a plan to buy at lower prices reaching full in at a ~25% market correction: reducing cash by 25K for each 100K of portfolio drop measured from the highest water mark. Sure this won’t protect against a major bear market but 20-25% corrections can happen any time.
Happy investing :slight_smile:
Chris