“At heart, we simply live by the adage – “buy low and sell high” and apply professional risk measures over that to ensure we stay around to benefit from the well-worn greed-fear cycle.” These were the closing comments from us at the end of our inaugural year here at Titan.
It is fair to say that the last quarter has been the most testing for us since we started and indeed, personally, for a good few years. Just as in the movie Groundhog Day, during the last 6 weeks in particular we seem to be in a rut from which the same events play out day after day… That is what is ludicrously cheap, just gets cheaper. Buying “low” when subsequent days result in even lower lows is not an enjoyable place to be stuck in!
You will note that our largest directional plays have changed from the last quarter. We closed out of our S&P short position as many of our proprietary indicators pointed us to a rebound in the market as we approached early August. This duly came to pass as the S&P in fact rebounded very sharply and printed new all-time highs of over 2020. Ditto on our long sterling v Euro position that we closed. Having entered around 1.15 initially in 2013, our exit level of over 1.25 was deemed to be towards the upper end of the likely move extension. This has also largely played out as expected with the FX pair trading only modestly higher around 1.275 as I write.
What has been a major change in the portfolio for us is the continued increase in our exposure to mining and in particular a leveraged play on silver via the USLV X3 levered ETF which tracks silver but delivers a return of 3 times the underlying.