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Long And Short Ideas From May: Here's How They Fared

Published 07/07/2020, 04:12 AM
Updated 07/09/2023, 06:31 AM

Late in May, I put together a post called The DMC Challenge in which I put together two hypothetical portfolios: one had nothing but my favorite short ideas, and another had nothing but my favorite long ideas.

It’s been quite interesting to watch. As of today, the short portfolio had suffered a hit of about 8.1%. However, the long portfolio was up 25%. In other words, in the face of this ascending market, my long ideas outperformed my short ideas 3-to-1. One could have taken positions in every single long and short idea and still be ahead by about 17% over the past five weeks or so.

Here are the top three worst performers in the short portfolio (for instance, NLS has gone up 64%, which would be very bad for a short position):

  • Nautilus Group (NYSE:NLS) 64%
  • Lithia Motors (NYSE:LAD) 33%
  • Owens-Illinois (NYSE:OI) 33%

And here are the three best shorts.

  • Valero Energy (NYSE:VLO)13%
  • Cirrus Logic (NASDAQ:CRUS) 16%
  • Phillips 66 Partners (NYSE:PSXP) 24%

As for the all long portfolio, here are the three worst ones. Indeed, out of the whole portfolio, only two of them had a loss at all.

  • AudioCodes (NASDAQ:AUDC) down 12%
  • Intel (NASDAQ:INTC) down 4.8%
  • MongoDB (NASDAQ:MDB) up 2.5%

Whereas the three top long gainers were……….

  • Vapotherm (NYSE:VAPO) up 63.8%
  • Ballard Power Systems (NASDAQ:BLDP) up 95.1%
  • Plug Power (NASDAQ:PLUG) up 141.8%

Here is a chart of the short sale champ:

PSXP Chart

And, with a triple-digit return, here’s the long position champ:

PLUG Inc Chart

What’s the takeaway from all this? Well, I think it shows how effective technical analysis can be, because although my shorts suffered, my long ideas more than made up for it, even when we had no idea what was going to happen over the next five weeks.

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