2016: A year of optimism

Even before Trump won the elections things started looking up again. After what was a blinding fall of MT to below $3, I played into the dilution event that happened in February. With some return to sanity in Iron ore prices I am finally up on the MT trade after 3 long years. I think MT will outperform SPY in the coming years as commodities turn around and so does MT's balance sheet. I look forward to holding on to MT through the recovery.

MSFT once again was a winner this year and I cannot seem to beat the performance I got out of it. Still my best investment to-date and a hold for now. It is getting expensive, but I think there is some more upside to this play as the market is progressively getting positive on this stock and will reach euphoric levels soon.

GE was dead money this year, but it was due for a breather given the run it has had for the size of the company. I suspect it will have a better 2017.

Some of the trades that did not work:

- Tried my hand again on SPY puts that did not work AGAIN
- DDD did not come back and is now dead money. I think it is ready for a turnaround, but my trade was too early and does not really matter anymore as my call options run out

Trades that worked:
- TGT call at 67$
- IBM turnaround from $120
- APPL turnaround from $94
- TBF turned around after the elections.
- XLF split into XLF and XLRE and then rallied after elections
- MT was a great success after the depths of despair on the dilution event.

Year end bet is on FIT. A risky one. Will need to see how that plays out.

Happy New Year!


  1. I don't really agree with your MT prediction (maybe because I've been burned by it badly). Steel supply still seems to be higher than the demand, and the fall from grace for MT was due to huge influx of high quality Chinese steel in the market. China has artificially curbed its steel production, and that might have given it a boost, but I don't think MT could do anything to get around Chinese Govt sponsored steel production.

    1. Fair points. But I think MT is a balance sheet recovery story in addition to a Steel recovery story. Additionally, at some point China will return to growth and will start consuming its excess steel production and go even further. MT also has a beneficial position in a BRICs and Euro zone recovery scenario which has been depressed for the past few years. All these are macro events that would help MT, but the risk with macro events is it is notoriously hard to predict. The investment thesis is that some of these events (if not all) will play out in MTs favor which would have a unusually greater impact on MT compared to the catalysts for SPY in general.


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