{"id":219517,"date":"2009-11-12T03:47:54","date_gmt":"2009-11-12T08:47:54","guid":{"rendered":"tag:typepad.com,2003:post-6a00d83452455969e20120a685d4af970b"},"modified":"2009-11-12T03:52:52","modified_gmt":"2009-11-12T08:52:52","slug":"energy-vs-financials-final-results","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/219517","title":{"rendered":"Energy vs. Financials, FINAL RESULTS"},"content":{"rendered":"

Many of you may be familiar with this sectoral strategy that I have presented, which was due to the unusually wide extreme to which these two sectors had diverged from each other as of April 22, 2008. To review :<\/P>
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On April 22, 2008, I decided to go short on Energy (XLE) and long on Financials (XLF).<\/A><\/P>
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Then, on May 20, 2009, I decided to cover the Energy short, and use the proceeds to double down on Financials.  Up till that point, the trade had earned a loss of -5.36%, vs. a loss of -32.20% for the S&P500<\/A>.<\/P>
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Now, it is time to sell the Financials position, and assess the final performance over the entire 18-month period, against the S&P 500.<\/P>
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Enerfin<\/A> <\/P>
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The purple line indicates the May 20, 2009 transition from being short XLE to covering that short and using the full proceeds to double down on XLF.  Note that the short of XLE was profitable, so that the amount that was redeployed to XLF was more than the existing value of the XLF position.  <\/P>
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Therefore, the final results are (with all dividends reinvested) :<\/P>
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Enerfin2<\/A> 
This strategy yielded a gain of 21.92%<\/span> vs. a loss of -17.19%<\/span> for the S&P500.  This is a huge gap of almost 40 points, and means that $10,000 deployed to this strategy would have yielded $12,192, vs. just $8,281 if placed in the S&P500 over this period.  Also note how the gap widened from what it was on May 20, 2009.  <\/P>
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This continues our track record here at The Futurist of collectively beating the market by a wide margin<\/A>, with portfolios that beat the market greatly exceeding the deficit of those that do not.  Of course, these trades are for entertainment purposes only, and should not be taken as professional advice.  <\/P>
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Related :<\/P>
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A History of Stock Market Bottoms<\/A>   <\/P><\/div>\n","protected":false},"excerpt":{"rendered":"

Many of you may be familiar with this sectoral strategy that I have presented, which was due to the unusually wide extreme to which these two sectors had diverged from each other as of April 22, 2008. To review : On April 22, 2008, I decided to go short on Energy (XLE) and long on Financials […]<\/p>\n","protected":false},"author":5748,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15,7],"tags":[],"class_list":["post-219517","post","type-post","status-publish","format-standard","hentry","category-energy","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/219517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/5748"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=219517"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/219517\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=219517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=219517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=219517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}