Author: Eric Steiman
Covestor model: Undervalued Opportunities
After two months of wild market swings, October decided to choose a direction and not look back. The S&P 500 appreciated 10.77% and recorded the best monthly gain in years. My portfolio accentuated these gains by increasing 23.15% for the month.
As a portfolio manager, I am at my best when volatility rises. The fear trade enters the picture and wary investors exit positions based on emotion. These emotions can give way to insanely cheap stock prices, and I always aim to take advantage.
My notable trading performers for the month were IMAX (IMAX) – up approximately 13%, SodaClub (SODA) – up approximately 19%, and MGM Resorts (MGM) – up approximately 18%. Some of these trades were only held for 1-2 days, with quick entry and exit. My other strong, ongoing positions during the month were in Google (GOOG) – up approximately 15% – and Tesla (TSLA) – up approximately 18%.
On the downside there were three negative trades: The VIX ETF (VXX) – down approximately 9%, eBay (EBAY) – down approximately 3% – and Akamai (AKAM) – down approximately 2%. Each position has since been exited as the trades didn’t work as originally planned. The VXX was a short position that would likely have gained on a market rally. Unfortunately, I exited the trade much too quickly.
Looking at my overall performance I am extremely satisfied as I gained over 1000 basis points on the SPY in only 1 month, with little use of leverage. I remain bullish into year end, and as of 11/4/11 hold positions in AAPL, GOOG, TSLA, SBUX, PNRA, RENN, and MAKO.
