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It is now time to close 2 trades, one that went badly and the other which went better than I could have hoped. I will start with the good one!
LONG NFLX/SHORT NILE
Blue Nile is a difficult stock to short because it is very volatile and trades at very high P/E’s compared to its peers (in my opinion). While I like the company and think it does have a very good future, its high ratios continue to shock me. I had gone short against Netflix, who announced very good earnings as well as a few more partnerships. This was the best example of a long/short trade that went for the best as Netflix gained 26.61% while Blue Nile lost 17.51% of its value for a total gain of 63.04%***
***As explained in the past, when you do long/short trades, you actually put up margin only, no capital and so returns are divided by .7 to account for the fact that 10,000$ portfolio would not have 10,000$ short and 10,000$ long but rather 14,000$ long and 14,000$ short.
LONG GOOG/SHORT BIDU
I knew that shorting Baidu was a risky proposition but simply believed it was also an overvalued stock at this point. I did turn out to be wrong. Google did remain steady (-2.19%) but Baidu gained (-15,82%) enough to make me a loser on this trade, a loss of 24.79%.
The other two trades that I currently have are both going fairly well so far:
LONG PCLN/SHORT EXPE +9,64%
LONG AAPL/SHORT AMZN +8,67%
So far this year, it gives me an average return per trade of 14.14%, well above expectations. Remember that I was quite happy last year with the 2,53% return I had given the short time the average trade lasts. I should have a new trade next Monday, hoping that they can continue to do well!
Similar Posts:
- Closing 2 more trades
- New trade: Long Netflix (NFLX)/Short Blue Nile(NILE)
- How we’ve managed our 60%+ return (annualized) so far in 2010
- New stock pick: Long Netflix (NFLX) & Short Blue Nile (NILE)
- Time for more trades! IntelligentSpeculator portfolio is back..!
Keep on your great work!!!!! 2 more trades to come :p
I still think that long GOOG/short BIDU was a very good trade, and one that in the long term would be profitable. I guess the stop loss kicked in. Too bad. I would keep still an eye on it….
[...] Speculator presents Closing 2 trades and a look back on the two remaining live ones posted at Intelligent Speculator saying “It is now time to close 2 trades, one that went [...]
[...] Speculator presents Closing 2 trades and a look back on the two remaining live ones posted at Intelligent Speculator, saying, “It is now time to close 2 trades, one that went [...]
@OneDay – Haha, yes working on those:) Thanks! Any ideas?:)
@vito – I agree 100%, I still believe in the trade, but discipline is key so I had to get out, it might become another trade although I did that 1 time in 2009 and it backfired so I hesitate to do it again, especially with a position like Baidu, which is so volatile.
[...] have a long position on AAPL (not that I would short Apple anyway… it would be almost as bad as shorting Baidu). Shorting Palm would be something to consider but at this point, Palm is down over 40% this year [...]
[...] Speculator presents Closing 2 trades and a halter entourage almost the two Hardy embolden ones posted at Intelligent Speculator, saying, “It is currently cobwebs to finite 2 trades, either [...]