This is a follow up to my May 2oth Rotation Blend post and reflects a completely new “blended” model containing 7 ETFs. The model invests in the top 3 performers each week, re-assessing rotational relative strength each week to determine the projected top 3 performers for the coming week. By holding the top 3 ETFs we significantly reduce drawdown as can be seen in the tight linearity of the equity curve. I am not going to post the model ETF components at this time but will offer as a members-0nly feature of the soon to be deployed new Prophet format. The Lazy Man models are the crux of my investing and trading strategy, whether on 2 minute bars or daily bars. Using a fractal approach to rotational model analysis can provide a scalable and adaptable risk management tool that will help minimize those Prozac moments.
Curtis Faith was 19 in 1983 when he was chosen to become one of the legendary Turtles. One of his quotes that resonates with me is the following;” Trading is a bit like flying an airplane. Most of the time it’s not very interesting but every once in a while it’s horrifying.”
The Lazy Man RM model reflects a kind of dynamic safety net portfolio to avoid those horrifying moments. The model is essentially a long/short approach of non-correlated investment vehicles with highly linear equity curves. And, just to keep things interesting, individual components of the basket may be culled and replaced over time if their equity curves fail to maintain that linearity. This is obviously a work in progress but the results to date have been more than encouraging to me.
Related posts:
- A Blended Rotation Model
- Lazy Man Likes XLB
- SPY & the Lazy Man
- Lazy Man Update
- IWM & Lazy Man
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