Sure, Happy To.
Jesse Livermore, my (and every other trader in the world) guru said 'In a twelve horse race only one can win'.
The idea of course is to pick the winner, and sit tight as it runs around the track, not selling it running five lengths off the pace half way around.
Now what I've done is to simplify the 1/12 chance of picking a winner by reducing the field to eight, and then grouping them in pairs...1 and 1A, 2 and 2A...etc.
So now I'm down to four bets, with the task of figuring out which nag of the pair is the best.
And then I go all in. Just like the Boy Plunger. No portfolio balance whatsoever!
The four pairing represent the four seasons the global economy can operate in: Spring = both faster inflation and growth. Summer = slower growth, but faster inflation. Fall = faster growth, but slower inflation. Winter = slower growth and slower inflation.
The paired assets for each season are: Spring = TBF/HYG or HYEM (depending on the direction of the USD). Summer = LTPZ/GLD. Fall = MBB/LQD, and Winter = TLT/SJB.
I also have a running side bet on the USD with UUP and UDN.
So now it's time to allocate bucks, with a zero hedge possible among the eight ponies.
I use propriety measurements to determine both the season and the favored horse in the pair.
Yesterday was a pivot point with in the Spring season, so I moved from HYG to TBF. I'm also long the USD, and have 2% in cash waiting on a very close signal to move into XIV.
Spring is so solid it's scary, so the choice will between Junk or TBF for some time. Junk of course is 1:1 correlated to equities. Prior to yesterday by choice of Junk was HYG based on recent USD strength.
How this answers your question.
