• S&P 500: +16.3%
  
• Nasdaq Composite: +43.6% (!)
  
• Russell 2000: +18.4%
  
• Vanguard Total Bond Market: +7.7%
  

• Short in February - I closed most of my positions and went net short via futures in late February. Was I missing something? There was a very contagious virus in China that seemed to have seeped out to Italy... and the markets were sleeping on it. If nothing else, supply chains were going to get disrupted and the big multinationals were going to see their earnings hit. I poured on the shorts further in early March. It turned out to be the second-best trade of my life (and the very best if we consider that it only took a few weeks to work).
  
  
• Buying in March - There were a lot of things that ended up undervalued in late March. I loaded up on yield, in particular bank and financial preferreds. I could've done better on this--the things to buy at the end of March were tech, tech, and more tech--but under the circumstances I think it was reasonable given what I thought would happen with the market (a muddle-through recessionary grind).
  
  
• Short USO - USO is the weird oil ETF that had big problems during the March and April crash. I did well shorting it then and completely ignoring it after. Incidentally, there was a really interesting opportunity with USO at one point: you could short USO, buy the actual oil futures it corresponded to, and collect an arbitrage profit of 30%. Unfortunately this anomaly only lasted a few hours before the spread closed. As I was checking my math and making sure I didn't miss anything the chance slipped away.
  
  
• SPAC Separation Trades - The basic idea here is that you buy SPAC units close to NAV, separate them into shares and warrants once you're allowed to, and the speculators bid up the warrants so much that the trade becomes profitable as you sell off both pieces. Strictly speaking in a sensible market this shouldn't work but I've been able to grind out decent profits taking on infinitesimal risk doing this in the retirement account. Nice successes here were PSTHU, OTRAU, and RBACU. These trades are more difficult to put on now as nearly every single SPAC unit is bid up above NAV.

• Oil Shipping - There is a well-known habit of traders that after a big win, full of euphoria and testosterone, they think themselves invincible and do stupid things. After killing it with March shorts, I gave a quarter of those profits back by going long oil tanker companies. It was stupid for two reasons: a) I was following a bunch of value guys, not truly examining the thesis for myself, when it's one of my rules to play my own hand, and b) If I had really thought about it, I would've realized the underlying economics made no sense. Okay, there's a worldwide lockdown that's destroying the demand for oil... and you want to own the companies that make money shipping it? You can talk yourself into this trade and feel clever (look at the contango!) but it was still stupid, stupid, stupid. You can't trade for too long without making mistakes but this one hurt, because I really should've known better.
  
  
• Selling Too Soon - As mentioned I had a nice shopping list in late March, and I bought most of what I'd wanted within a few weeks after that. Unfortunately I sold off a lot of it too soon, worried about a second Covid wave, which did in fact arrive but did not slow down the market's recovery.
  
  
• Short Through Summer - I was net neutral through much of the summer--by that I mean I had a portfolio of longs largely offset by shorting S&P futures--and then net short as the election approached. The right move, of course, was to not be short at all.

• Short TSLA - This didn't really move the needle too much but I somehow managed to make a few bucks shorting TSLA in a year when it increased seven-fold. I'd like to claim it was clever nimble trading but really it was probably just luck.
  
  
• NKLA Warrant Arbitrage - It didn't amount to much, but during the summer I put on a SPAC arbitrage play. At the time, NKLA warrants were horribly underpriced compared to the common stock; the catch is, the warrants couldn't be exercised until they were registered, and there was no way of predicting the exact date that would happen (although we knew a ballpark range). So the play is to buy the warrants, short the common, exercise the warrants to cover the short, and capture the difference in profit. Problem is, I put the trade on too early, and the ever-increasing cost to borrow NKLA common (at one point it hit a 750% APR) ate me alive, turning what could've been a very lucrative trade into a small loser. A good reminder that whenever you see what appears to be free money in the market to think twice and consider every single way something can blow up.
  
  
• Kensington / Quantumscape - Not long after its IPO in June, I bought KCACU at $10.06, and sold it off not long after that for a miserly 1.3% gain. Today the components of KCACU--a share of QS and half a QS warrant--are worth $90. Oops!

GoGoGadgetChris fucked around with this message at 23:27 on Jan 3, 2021