Let's measure!

On Aug 27, I had posted this, with ideas for 5 potential trades. I thought it would be good to take stock of how these trades would have done given that it has been a quarter since the ideas. Here is a table outlining the performance of these hypothetical trades.

Approximately 21% annualized returns. Not a spectacular performance, but then not bad either! Just buying the index would have given approximately a 9% return over the same period, but this portfolio is designed to be perform even when the index does not. So in theory, it should outperform over a longer time frame. I will keep tracking it and reporting results to see how the damn thing goes.

Analyzing each of the 5 trades, I think the only place I went significantly wrong was in the oil marketing companies. However, current under performance is primarily due to rising crude prices, which in turn is due to a weak USD. I remain confident that the pack should recover with continuing weakness in the global economy.

The (very reasonable) assumption here is that one would have put an equal amount of money to work on each leg of a trade (e.g. if one has Rs 100 in total for this portfolio, then I would buy / short a stock worth Rs 20. For a paired trade, I would buy for Rs 10 and short for Rs 10). CMP as on date includes dividends paid between 27 Aug and today.