Frequently Asked Questions
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Q. What do you trade?
A. I trade stocks and stock options. This is where much of research is focused and resources are devoted. Foreign currency futures are traded to manage the exposure to the value of the US dollar. Commodity futures have also been traded infrequently during the life of the portfolio.
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Q. What was your return in 2006?
A. 28.6% for the full portfolio. The stock and option portfolio alone earned 22.9%; this should be viewed as a part of the return of the full portfolio. The difference is due to trades in futures.
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Q. What was the total return of the S&P 500 index in 2006?
A. 15.6%, including 1.79% estimated contribution from dividend payments of the constituent stocks.
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Q. What was the standard deviation of your daily returns in 2006?
A. 1.29% for the full portfolio. If only trades in stocks and options are considered, the figure is only 0.79%. The difference is due to contribution to daily P&L of positions in futures.
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Q. What was the standard deviation of daily returns of the S&P 500 index in 2006?
A. 0.63%