Stock Pick Site:

Tony you say "My rhetorical questions are simply based on 20/20 hindsight that a short position held for 24 months on QQQ would have done better than the stated returns."

Shortboy has been online from 6/99 to 3/02, that's 34 months, and that should be the basis for your comparison. Not 24 months. But I can understand, given the parameters of the original post, why you would just use 2000 & 2001. That's MY mistake, in not posting ALL the relevant data.

I would appreciate your final thoughts now that you have this extra information. Take Shortboy's 34 months, and compare it to any index you want, ANY index. And tell me who wins.

Thanks, Sam
 
Sam,

Who cares? All that matters is what you're doing today. So what is it? Surely you have some prime shorts on your screen? Let us know.

As for me, I made 25% on my DANKY trade, courtesy of momentumstockplays.com. Come on Sam, enlighten us with your exceptional trading powers.

Alpine
 
Yes, DANKY was sweet wasn't it Alpine. Made a nice $$$ while shortie
sits on his thumbs. HA! HA! HA! Thanks to momentumstockplays!
 
Originally posted by Sam Contari
Tony you say "My rhetorical questions are simply based on 20/20 hindsight that a short position held for 24 months on QQQ would have done better than the stated returns."

Shortboy has been online from 6/99 to 3/02, that's 34 months, and that should be the basis for your comparison. Not 24 months. But I can understand, given the parameters of the original post, why you would just use 2000 & 2001. That's MY mistake, in not posting ALL the relevant data.

I would appreciate your final thoughts now that you have this extra information. Take Shortboy's 34 months, and compare it to any index you want, ANY index. And tell me who wins.

Thanks, Sam
More...

Sam,

This is a very valid point! But as you said yourself, I only replied to the numbers that were posted. I did not have all the info that you submitted later on. Of course that changes the overall calculation and also brings out another important observation:

When the market ran up 70% in the time period you talked about shortboy managed a profit on the short side, but HE MISSED THE BULL MARKET RUN. This brings another valid dilemma.

Why would you only want to play one side of the market? After all, history will say that stocks go up 2/3 of the time! So I guess a solution will be BALANCE.

In other words, there is no reason to sit on the sidelines when the market roars like it did a couple of weeks ago. For example, BRCM went up from 30.10 to 44.99. Now did I capture any of these points on the upswing? No I did not. But I did short it at 44.16 and covered yesterday. My short position had nice gains, but I missed a 50% up-move prior to that.

By using my own trade data as a yard-stick, I'm illustrating that although I had a profit on my short trade, the true move was before the short was taken. The run up that is.

Without taking anything away from shortboy.com's performance, education etc., wouldn't you agree that it would be beneficial to a trader to master the art of playing BOTH sides of the market?

A 70% run-up in the market is a BIG miss :)

But as I said before at least the guy posts his record and is exposing himself to cr*p like this. For the 34 months that were in question in the quoted post above and compared to either buying an index or shorting it at the start date till today, it looks like he outperformed.

But we can also see that he missed the bull run (from 2397 to over 5000 - it is more than 100% run up). We can also see that he under-performed on the short side when the Nasdaq went south. All in all Sam, you can't grade a service like this with more than a "C".

Now, don't jump on me! Here are my thoughts:

As a trader, I want a service that does better than the market both on the long and short side. I want to maximize profits in bull markets and in bear markets. This is what I pay the big bucks for, no? With the volatility we had over the last 34 months, it is my feeling that average returns greater than 35%-50% per year would be considered an OK performance, 51%-75% would be considered good performance and 76%+ would be considered great performance.

These numbers are for traders and NOT investors! I certainly hope a trader can do better than investors.

Tony

PS: Don't ask about my personal performance in the same time period. It was great, but I do not wish to post it here.
 
Tony,

I've thoroughly enjoyed our dialogue. I respect your opinions.

You say "For the 34 months that were in question in the quoted post above and compared to either buying an index or shorting it at the start date till today, it looks like he outperformed."

Yes, agreed!

Yes, and that means he beats 99% of the investors/traders/money managers out there.

You also insist on comparing him to the wild swings of the NASDAQ. I disagree with this comparison as it is definitely apples to oranges. Shortboy never traded ANY NASDAQ's. So he missed the wedding, missed the funeral, and missed all the volatility and high standard deviation of RISK associated with NASDAQ trading.

A portfolio that has quality returns such as Shortboy's, that outperforms 99% of ALL portfolios, and then add that his trading strategy is VERY LOW risk (he hasn't has 1 single day in almost 3 years where he's lost 2% in a day!! and you add it all up, and you have a winning trader who can sleep at night (low risk). And that's about the best type of portfolio anyone (including you), would want.

It certainly is a portfolio managers dream, as most can't even beat the S&P anyway. And Shortboy does it EXCLUSIVELY shorting. Shortboy beats most money managers with 1 hand tied behind his back.

I rest my case.

Most respectfully, Sam
 
I will play devil's advocate one final time, and you can have the last words on this subject :)

" that means he beats 99% of the investors/traders/money managers out there. "

I guess that puts me in the 1% :)

Now this is Elite TRADER and not Elite Investor, right :) So let's forget about investment yard sticks and talk about trading yard sticks. If you have a copy of my book The Stock Trader handy, you can see that I made a 56% return in 30 days in a market that went down 32% trading ONLY on the long side. All this while sweeping profits out of the account weekly and never compounding profits. Although my approach was aggressive, I feel that the risk management was not reckless.

Now let me tell you this straight out and in public! I feel that I could have at least doubled if not tripled my return for that time period have I been able to trade BOTH sides of the market!

You see, this is the beauty of TRADING. We are not looking to invest one way only. We want to take advantage of the market NOW - Both long or short.

You say, "A portfolio that has quality returns such as Shortboy's, that outperforms 99% of ALL portfolios, and then add that his trading strategy is VERY LOW risk (he hasn't has 1 single day in almost 3 years where he's lost 2% in a day!! and you add it all up, and you have a winning trader who can sleep at night (low risk). And that's about the best type of portfolio anyone (including you), would want."

First, shortboy has no track record performing in a bull market against long funds. So, given the bear market he did well. Yet, there are bond funds, global funds and other historically weak funds that SMOKED him in the same 34 months. But historically, those funds ranked in the bottom 20%. So you need a lot more time if you wish to compare shortboy to his peers.

Next, the best performing fund over the last 5 years is up 40% annualized. Yet it did not perform as well as shortboy in the last 34 months. But it will smoke him in any bull market environment.

Finally, and mark my words, the bull market created a lot of geniuses, and the bear market has created shortboy. Once the bull is back, you can kiss shortboy goodbye. There is no way he could keep up trading only one side of the market.

And as a bonanza, I will force you to answer the question that you ignored. "Without taking anything away from shortboy.com's performance, education etc., wouldn't you agree that it would be beneficial to a trader to master the art of playing BOTH sides of the market?"

If the answer is yes, as it should be, this puts an end to the value an evolving trader can get from a narrow-vision approach such as exclusively shorting the markets. Sometime, I like to order the Lobster rather than the Filet Mignon... :)

Tony

PS: I only used my personal performance yard stick to illustrate how a trader can take advantage of the market trading on both sides. The difference at that 1% bracket Sam referred to is HUGE. If I were to pay someone for TRADING advice, he better know how to take advantage of the SWINGS in the market. As far as investment arguments are concerned, I would like to point you to the name of this website.

PS2: Sam, as an investment and diversification or whatever tool you may want to use this approach for, it may be valid. But, as a long timer in this industry, I don't see the long term value to a trader to mimic a narrow-minded short-only approach just as I don't see the long term value to mimic a narrow-minded long-only approach. Why not have the Lobster and the Steak :)
 
I see what you are saying.

Based on the record posted on the site, it seems that the 114K profit for 99 was 11%, so 1Mil accout I presume and position size was as much as 135K or 13.5% of equity. I can't tell if magin was used or not. So the ending balance should be 1,114,105

Then in 2000 he made 129,479 or 11.6% and position size was as high as 139,000 or 12.2% of equity. This brings the total to 1,243,584.

Then in 2001 he makes 30,790 or 2.47% Position size is as high as 103K or 8.3% of equity.

The numbers I get off the trading table are as so:

Up 11% in 1999
Up 11.65 in 2000
Up 2.47% in 2001

Am I missing something?

The numbers Sam posted were much higher, why?

As usual, I'm not making any accusations, I just don't understand the math.

Tony
 
All I can do, in response to your assertion that in a bull market, there would be no Shortboy. That the bear market created Shortboy. I can offer you this link:

http://www.amazon.com/exec/obidos/ASIN/0471442941/ref=ase_marketbusterc-20/104-7886681-4187957

This is to a book written by 2 Wharton Business School students. In it, Shortboy's track record for the best years of the bull market are posted. The S&P soared in 1996, 1997, 1998 & 1999,

AND SHORTBOY TROUNCED IT IN ALL OF THOSE YEARS.

Of course, this is according to the book, and whether or not you want to believe the veracity of 2 students from the best business school in the country, as to the thruthfulness of their writing.

I believe them, and I believe that Shortboy has now trounced the S&P in both up and down markets for the last 6 years!!. Of course, I am relying on the truthfulness of this book, written by 2 students from Wharton Business School.

So in up markets from 1996-1999, Shortboy still trounced the S&P. Proving Shortboy was not created by a "bear" market, as you assert. Shame on you for assuming without duing your due diligence.

Now try to chop that down. Shortboy's performance from 1996 to the present is caviar. And in which book written by enterprising business school students are you in?

Good day,

Sam

===

never kid a kidder
 
You didn't answer my question in bold. " "Without taking anything away from shortboy.com's performance, education etc., wouldn't you agree that it would be beneficial to a trader to master the art of playing BOTH sides of the market?"

If the answer is yes, as it should be, this puts an end to the value an evolving trader can get from a narrow-vision approach such as exclusively shorting the markets. Sometime, I like to order the Lobster rather than the Filet Mignon... Once you respect me and answer maybe I will answer you question and tell you about all the write-ups and competitions I won as well :)

But wait a second. My next post (a reply to Babak) will deliver the boom!
 
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