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Individual Investor
Alpha Trapper
The Alpha Trapper strategy takes a long-short approach. It seeks balanced growth for the long investments. I also take short positions in ETFs in an effort to help me hedge the total investment risk and to add to potential returns.
I try to estimate the potential long-term returns for every position, whether it is long or short. I seek long-term investments. But I will shorten the holding periods for individual positions if my long-term expectations are invalidated or if price targets are reached sooner than expected.
For the short positions, I gravitate toward what I believe are poorly constructed ETFs that in my opinion will lose value under most market conditions.
For the short positions, I gravitate toward what I believe are poorly constructed ETFs that in my opinion will lose value under most market conditions.
All research data comes from publicly available resources. Those include company reports and regulatory filings. I examine both current and historical data in researching every potential investment.
The Alpha Trapper strategy typically holds 3 to 5 long positions. Most are in stock and bond index funds. Short holdings could range from 0 to as many as 10 positions. I attempt to allocate the most capital to what I believe are the best overall opportunities.
Positions are typically closed when I have either reached my price target or when conditions have changed to invalidate my original expectations.
For commonly shorted ETFs, I use mathematical formulas to determine how much to sell or buy back. I may make decisions on a case-by-case basis for ETFs that I do not short very often.
For commonly shorted ETFs, I use mathematical formulas to determine how much to sell or buy back. I may make decisions on a case-by-case basis for ETFs that I do not short very often.
I may buy individual company stocks if my research suggests that there are ones that are extremely undervalued.
In addition, I may buy stocks to hedge an existing short position. For example, the strategy may buy a natural gas royalty trust to offset a short position in a natural gas ETF.
In addition, I may buy stocks to hedge an existing short position. For example, the strategy may buy a natural gas royalty trust to offset a short position in a natural gas ETF.
Model commentary
I pounced when Apple fell below $425
11 March 2013
Apple has a low PE, an incredible balance sheet, and potential for further growth.
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