Update on Axsys Technology (AXYS) Short Idea

Last Friday as I outlined a series of potential short ideas if you were interested; I said Axsys Technology (AXYS) has the best set up of the list I presented

I like AXYS the best simply because you have 2 resistance levels (sort of like insurance) right next to each other that must be broken to turn from bear to bull.

The stock was at $54 with a day high of $55 with two resistance lines right above it (I'll post a chart later in the day). (I said stop out at $58) In never breached $55 and today it is the $48s.

I'd target the recent lows of $45 and put a trailing stop of about 5% as you are "in the money" here even if the stop triggers.

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On another note, I've only been really able to run half my strategy in Marketocracy.com (which is where I began my mock portfolio) in the past year and a half - just the long ideas with hedging in short ETFs that have proven to be useless except in extreme downtrend days. Hence my performance figures which I have since abandoned (some people have asked me of late about them) are showing half my strategy. Even with that half I've far outperformed the market, but many opportunities that long time readers have seen me "call out" (short restaurants, retailers fall 2007, calling Washington Mutual and Freddie Mac "going to zero" this summer, short REITs winter 2007-2008, short China and emerging markets fall 2007) have only been on the web pages and nowhere to be found in any performance metric.

Frankly I am frustrated by that since I believe my performance has beaten 95%+ of equity mutual funds the past year and a half. And that's with just half a strategy employed (no individual shorting benefit). I do believe, but cannot prove, I'd actually be up since August 2007 if my full strategy was employed. In "year 1" (August 2007 to July 2008) we beat the market by 24% and posted a positive return (+10%) despite the handicaps I've outlined above - we discussed that here. We had some minor gains from our short ETFs but nothing major to talk of; that was almost all long side exposure in a quite bad market.

But as a newer reader, if I came to this site my first question would be "yeh but how has he done with performance?" A very fair question and one I wish I could have an accurate representation over the past 18 months. Readers who follow the blog day in and day closely for months see the opportunities that have gone to the wayside that I laid out on the short side, but I don't expect a newer reader to know or care about that - the bottom line is performance. That was the whole genesis of the website - build track record anyone can follow, explain thesis and theories in detail, attract money... one day, do it for real.

In lieu of the performance page what I've tried to do the past 6-7 weeks is be far more explicit in explaining my trades - this is why I went in, this is where I'd buy more, this is where I'd stop out, this is where I'd exit for a gain. I put that all out ahead of time so people can see the strategy - it is not as good as having a performance page up and running but the thought process is completely explained. Probably that is helping individual traders who are "do it yourself" traders, but not helping me attract investors. So the website is sort of going in the wrong direction in a way - more of a " trading newsletter" audience.

A reader has sent me a new website that allows "mock portfolios" that DOES allow shorting individual equities and DOES allow stop losses - two things that are simply critical to my strategy but I've been without in Marketocracy.com the past year and a half. I am going to be testing it in the next week or so and see how it works - the main problem is, unlike Marketocracy.com, where there was a page an "outsider" could look at performance without having a login, I don't see that option on this service. So showing readers the performance without a login is the roadblock. I'm hoping I can find a way around this - frankly the past 6-7 weeks the success rate of trades has been approaching 90%+ but I sit here without a way to show it unless you sit and backtrack every entry on a daily basis. I am hoping to find a 3rd party source to show this and "rebuild" a performance track record that actually dovetails with my style of investing.

I will also be writing a more detailed explanation of my investing process in the next week or so; I've talked about it in pieces here or there across the past year and a half but not all in 1 entry. If you follow along daily for a few months you can probably figure out much of it, but it will be helpful to have all of it in 1 place.

Onward.