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iamnik77 (95.64)

June 2009

Recs

1

Anyone like to hold both long and short positions in their real money portfolio?

June 22, 2009 – Comments (9)

Suppose I have a knack for picking stocks (both short and long positions) that outperform the S&P 500 by a sizable margin. And suppose that my portfolio has a 50/50 allocation to short and long positions. My short positions would consist of overpriced and hopeless companies and my long positions would consist of bargain priced companies with bright prospects. Of course, this portfolio would underperform a portfolio consisting only of my long positions in a bull market and underperform a portfolio consisting only of my short positions in a bear market. Do you think my 50/50 long/short portfolio would outperform an all long portfolio over a 20 year span? What about a 10 or a 5 year span? Thanks in advance for your input.  [more]

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