Lessons from 2019

            Lessons from my trading in 2019

I made many financial mistakes along with some good decisions in 2019. I have explained on how to avoid some mistakes in my books and I did not follow my preaching.

In the last two months of 2019, I started buying contra ETFs betting the market to go down while the market has been making new heights. The market is financially unsound but technically sound.  Lesson #1: Follow the simplest market timing described in this book. Lesson #2: Never bet against the market on a year before election.

There are always two sides of opposite views on the market. I studied them and believe 2020 could be a disastrous year for the market. No one is sure unless s/he has a time machine. Again follow Lesson #1.

I did well in buying GLD/SLV, OIL/USO and basic materials including IYW and two copper miners. Will unload some copper miners. Will unload OIL/USO when it approaches to $70 per barrel. We need a good economy or some events to drive up the oil price. Lesson #3: Every portfolio should have a small portion in gold (GLD/or similar ETFs, gold coins and ETF for gold miners).

Stay away from Chinese stocks for the entire year. I may buy a contra ETF on Chinese stocks. The trade war and the explosive debts will drive China’s economy down for a few years.

I had 50% profit in one month using my year-end strategy in 2018. From my memory, I made about 100% on YRCW and lost about 30% on another bet on the same stock. Lesson #4: “Year-End Strategy” works at least so far. Lesson #5: Sell the stocks bought using this strategy within 2 months, and hence I should use retirement accounts for this strategy.

I made some money in trading energy stocks that have been beaten badly. Lesson #6: Buy low and sell high. Lesson #7: Buffett’s “Be greedy when everyone is fearful and vice versa” is correct.

There are many ‘great’ traders making millions and losing most. Lesson #8: Avoid big losses by using stops. Lesson #9: Do not speculate and be a turtle investor.

Sold METC and REI in early 2020 for 14% gain (172% annualized) and 35% (508%) respectively. They were screened from my year-end strategy in early Dec., 2019 and profited due to the daily news (Iran). Lesson #10: Combine different strategies.

I save the most important lesson for last. If you spend all day long in trading, you do not enjoy life and it is bad for your physical health and mental health. Wish you a healthy and prosperous 2020!