03 July 05

Commodities Trading

Whoosh! Long Island is up 91% in his hypothetical commodity trading account started on May 27th 05.
Here are our results thus far: (up until June 7th 05)

Jon’s Account: Open price Close price Profit/loss

Short 20,000 Swiss Franc .8116 .7986 240
Long 3,000 Soybeans 6.665 Open 237.5
Long 300 Crude Oil 51.97 55 880
Short 100 Coffee 118.05 122 -420
Long 40,000 Japanese Yen .9283 Open 410
+1347.5


Long Island’s Account:

Short 200 Cattle 85.02 84.7 44
Long 150 Cattle 84.7 83.55 -192.5
Long 3000 Sugar 8.68 8.76 220
Long 200 Hogs 71.4 68.4 -620
Long 300 Crude Oil 51.97 55 880
Long 4000 Natural Gas 6.789 7.127 1332
Short 300 US Dollar 88.04 Open 158
+1821.5

Our starting capital was $2000, I have deducted $10 commission per trade, and we are operating on a 5% margin requirement.

In less than one month Long Island has almost doubled his investment and mine is up two thirds.

These are spectacular returns! Long Island’s performance is remarkable considering that I have only been teaching him to trade for two months. According to the Professors of Finance Edwin Elton, Martin Gruber and Joel Rentzler the average yearly return for professionally managed commodity funds over a surveyed nine year period was a measley 2.3%. (Source: Investments Vol 2) I suspect that Long Island and I have just outperformed most of the highly –paid professionals.

Simplicity is the key to our success. We receive no news nor do we have access to multi-million dollar computer programs. We are trading from five month price, volume and momentum charts in the Investors Business Daily.* I feel that our seclusion is helping us maintain psychological equilibria as we are not bombarded by the disinformation prevalent in the media, which could taint our decision making processes.

Long Island has become so enthused about trading the financial markets that he has written to the NASD requesting information about getting a Series 7 license and becoming a stockbroker. He is fully focussed and I expect him to do well when he gets released in Dec 05.

*I’d like to thank Barry in Tonopah for the subscription to the Investors Business Daily, the arrival of which is now the high point of our day!

***Readers please note that our trading is not for real, we haven't the facilities or cash to trade on the stock market.

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