On Oct 26,2009, we increased short allocation on our Equities Long Short Allocation Model.
On Oct 26, we also reduced allocations to oil, gold, copper and emerging markets to zero.
Yesterday, Dow Jones Average went up 200 points, oil went up, gold went up and emerging markets went up strongly. We received a lot of hate mail from bullish traders.
Today Dow Jones Average at the time of this writing is down 235 points, oil is down and gold is down; but no fan mails from the traders who sent us hate mails yesterday.
We want to make two points.
First, these are longer term models and not designed to capture daily fluctuations. For those interested in daily fluctuations, we offer as a service a Short Term Trading model. At times, we also post very short term ZYX Method trades on this blog.
Second, these allocation models are designed to maximize alpha over long term and NOT for the purpose of maximizing absolute returns in a specified time period