Pity the Poor Programmer

Welcome to the new world of chaos. High volume, Wild swings!  Does anybody pity the poor young physicist hired by Wall Street who now tries to explain to management why his algorithm gave a buy signal just before the collapse in September and then said sell before the year end rally?  NO!!  Some liberal arts types might even blame his or her professor, God forbid.

Well here is what one professor is doing and why: I started buying in November because there had been three sharp drops and the economy was strong.  I bought GXC and three tech stocks on December 20th and 21st because I believed the trade war with China would be resolved early in 2019 and I did not want to go back into VGT because I thought there was more upside potential in a few individual tech stocks that I could sell on a rally.  The result was my portfolio ended 2018 with a loss of 3%.  You might say: That is no investment strategy, that’s just the old, “Get a hunch, bet a bunch strategy.” RIGHT!

You see, my big concern is the $Trillions in debt the US and China has and the Trillion dollars a year the US is going to add to it.  For that reason, I do not want to be a long-term investor.  What ever rally the market has after some sort of resolution to the trade war, I will bank the profit and take a vacation in my Tesla with my dog, Rusty.  What if the market goes back down?  It is called a stop loss order.  This is a limit your losses and your gains strategy that I do not want my name associated with, so I hereby name it, “The Rusty strategy.” Sorry Rusty.

About Frank Sortino

Frank Sortino is finance professor emeritus from San Francisco State University and Director of the Pension Research Institute which he founded in 1981. For 10 years he wrote a quarterly analysis of mutual funds for Pensions and Investments Magazine and he has written two books on the subject of Post Modern Portfolio Theory. He has been a featured speaker at many conferences in the U.S., Europe, South Africa, and the Pacific Basin. Dr. Sortino received his Ph.D in Finance from the University of Oregon and has carried out research projects with many institutions like Shell Oil, Netherlands and The City and County of San Francisco Retirement System.
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