An Analysis Of My Trading – The Dangers Of Short Selling And The Energy Book Every Investor Must Read


If you want to get better at trading – or anything else – you need to keep records and track your results. The way I do this is by having Excel spreadsheets with all of my positions, their quantity, current market price and cost basis. This shows which positions are working, which aren’t and the magnitude.

On the positive, almost all of my largest long positions are sitting on significant gains. The best performers are in my energy portfolio consisting of coal stocks, a natural gas stock ETF (FCG) and small positions in uranium producer Cameco (CCJ) and the Uranium ETF (URA).

I didn’t know much at all about energy until I read Robert Bryce’s superb book A Question Of Power: Electricity And The Wealth Of Nations. The time and money spent on that book has literally paid me back thousands of times. Because everything is going online and our society is becoming more and more technological, electricity is the essential resource and will only become more so in the future. Every investor should read Bryce’s superb book.

One stock that I got from a WSJ Op-Ed by Bryce which has not worked out for me is back up power generator manufacturer Generac (GNRC). I’m down more than 50% on my position but I’m quite bullish long term at these levels.

My large positions in leading consumer staples names have also performed nicely. I have big chunks of Kroger (KR), Walmart (WMT) and Procter & Gamble (PG) and am sitting on solid gains in all three.

More recently I have become enamored of Uber (UBER) and that stock has performed exceptionally for me.

My largest long position by far is TLT – the long term treasury ETF – and that has been a wash up until this point. However, I still believe that all of the Fed’s tightening will slow the economy and bring bond yields down later this year.

Overall my long portfolio shows solid – though not spectacular – gains.

The drag on my performance is primarily due to my short positions in the Magnificent 7 – and my short portfolio overall. I am sitting on 30% losses in my short portfolio. Fortunately, my short portfolio is only 1/6th of the size of my long portfolio. However, the terrible performance here has entirely offset the solid performance in my much larger long portfolio.

This is why so many investors are long only and caution against shorting. It has been extremely hard to make money on the short side for a long, long time. The only thing that has kept me in the game is controlling my position sizing on the short side so that I can hold on when my shorts move against me.

Similar Posts