How our 2018 trading tips fared
Matthew Partridge tots up the results of the year's trading tips With Petrobras, Greene King and IG Group among the year’s winners, are we in the black or the red?
Petrobras, Greene King and IG Group are among the year's winners.
I'm going to use the final trading page of the year to see how our tips have done. This section focuses on the 15 trades that we closed. Our open ones are assessed in the column on the right.
We started the year with six positions carried over from 2017: long positions in IG Group, Petrobras, AA and Renault, as well as short positions on Facebook and Tesla. During the course of the year, all six were closed. First to go were Facebook and Tesla both closed for a loss in the first magazine of the New Year (issue 880). We later disposed of AA (883), Petrobras (889), Renault (895) and IG Group (915). While AA lost us £455, Petrobras made £646.25, IG Group returned £559, while Renault was £355 in the black.
In issue 883 we shorted the S&P 500 for the first time at 2,673 for £5 a point. However, thanks to a market rebound we were forced to cover it at a loss of £500 almost immediately. Next, in issue 885 we went long on Micron Technology, closing it out in issue 909 for a modest profit of £50. Failing to learn our lesson from our first S&P 500 short, we decided to short the S&P 500 again in issue 887, which cost us £480 when we had to cover it in issue 903.
In issue 893 we revisited another position, recommending that you sell short electric-car company Tesla at $283. This was a very volatile position, shooting up in the wake of Elon Musk tweeting that it was about to be taken private at $420 a share. After that share-price surge dissipated, our position temporarily moved into the black before the price rose to $353, where we covered it at a loss of £280.
In issue 897 we tipped builder Redrow at 623p for £3.50 per 1p. Sadly, its subsequent performance was disappointing and we ended up closing it out six months later for a loss of £342. An even worse fate befell our punt on new airline Wizz Air. Opened in issue 899, it was closed out 18 weeks later at a loss of £960.
Next was another misadventure. Tipped in issue 903 at £59.46, we ended up closing it out at £50 in issue 925 for a loss of £946. Premier Oil was another dud. We tipped it in issue 907 at 127p. We then had to close it at 88.5p, for a loss of £900. Overall, we've made money on only four of the 15 trades that we've closed this year (IG Group, Petrobras, Renault and Micron). The total running tally for all closed positions since the column started is -£2,945. But this gives a rather misleading view of our total performance because we've brought in a policy of closing any trades that don't make money within six months. This means that many of our best bets are still active.
Open bets areon the money
While our closed positions haven't done that well, our open positions are performing much better. We currently have five long positions and seven shorts.
We tipped Greene King in issue 891 (13 April), and it is currently making us £240. Shire was tipped in issue 905 (20 July), and has produced £306. Our long position in Saga, which we made in 917 (12 October), is currently losing us £525. We tipped Cineworld in issue 921 (9 November), which is losing £300, but we still think it has a good business model and we'll stick with it. John Laing Group has lost £252 since we recommended it in issue 923 (23 November).
We started the year in issue 880 by shorting bitcoin. This has proved our best bet yet, making us £1,994. We recommended shorting Netflix in issue 909 (17 August) and it has made us a profit of £473. Our Twitter short in issue 911 (31 August) is losing £306. Our Snap short, recommended in issue 913 (14 September), has made us £394 so far.
The Just Eat short in issue 915 (28 September) is £246 in the black. We shorted Weis in issue 919 (26 October) and our position is losing £252.
Overall, our long positions are in the red by £241. However, our shorts are making us a collective profit of £2,307. This means that our 12 open positions are making us a net profit of £2,279, which nearly balances our losses on the closed positions.
Because we remain convinced we made the right original call in each case, we will keep all 12 positions open. But because we've held bitcoin for nearly a year, we'll explain in more detail why we're not closing it in the box to the left.
Bitcoin has further to fall
It's amazing to think that this time last year, the big question was not whether bitcoin would breach the $20,000 mark, but when. In the event it narrowly failed to reach this level, peaking at $19,783 on 17 December 2017, only to plunge thereafter.
Despite a brief rally in mid-January, by the time we recommended that you shorted it in issue 800 (26 January) it had already fallen to $11,255. At the time of writing, it is trading at around $3,250, down nearly 85% from its peak. So should you take profits?
We think you should maintain the short position because the currency looks unlikely to recover. Today's price may seem low compared with the madness of last December, but it only brings it back to where it was in August 2017. Indeed, if you had bought into the cryptocurrency two years ago, and held on through the bubble and the bust, you would still have more than quadrupled your money. This suggests that the rout has a lot longer to run.
While the blockchain technology that underpins the digital currency may have plenty of long-term potential, regulators around the world have made it clear they don't want cryptocurrencies to become a major part of the financial system. Besides, bitcoin's volatility defeats its purpose as a store of wealth. Rising interest rates will make conventional currencies much more attractive over the next few months.