The DMC Challenge

By -

On Memorial Day, I decided to do a risk-free experiment.

I have been mightily plagued in recent days with thoughts about the market. Is it just going to keep going up for another decade, just like it did from 2009 to 2019? Is this bounce almost over? Was Feb 20-Mar 23 a total fluke that won’t happen again in our lifetimes?

It’s too scary to actually risk money on hypotheticals, but I decided to go “all in” (virtually speaking) with an entirely long portfolio and an entire short portfolio. Here are some common properties of these two portfolios:

  • They will all have entry prices equal to the closing price of May 22nd;
  • They are all equally sized dollar amounts;
  • Each portfolio has a hypothetical $500,000 invested ($4,000 in each of 125 short positions and $20,000 in each of 25 long positions)

Let’s take a look at the longs………

dmc long
Long Positions

……….and the first portion of the shorts………..

dmc short
Short Positions

The DMC, by the way, stands for Devil May Care. This is bound to be an interesting experiment to see how these two purely bullish and purely bearish portfolios do in the weeks and months ahead. I’ll do a post from time to time to see how they’re doing.