A simple arithmetical error has me pretty embarrassed today. I have under-reported annual (and monthly) gains. The error was dividing the difference between the current balance and the previous balance by the current balance. I should have divided the difference by the previous balance. So at least I have that to smile about, however sheepishly.
Gains for this month were 3.34%. For the year, a solid 14.34% realized, which annualized is on track for 30%. Position interest came in at just under 9% of this month’s gains. Very healthy given that this month the carry was not a conscious strategy. I have resolved to watch for more trading opportunities and as a consequence I’m in more losing positions, but trade rotation has kept realized gains apace. Still carrying more than -2%. I’ll just have to get used to this “new normal” until I can work my way out of a few poorly trades. Accounting for NAV (at a little more than -3% as I write this), the Knotty has earned a smidge over 11% for the year, if marked to June 30th. Not bad.
July will prove challenging, with several deadbeat positions still to turn around, but with a healthy yield to mitigate somewhat. I expect a bit of a resurgence in the desire for the positive carry, which I’m badly positioned for. And of course, I expect this to happen only when prices are more favorable for fresh longs, which means my positions will have gone from bad to worse. I should be averaging about -5% in daily NAV if this occurs. If this doesn’t play out, I suppose I’ll have to stick to last month’s plan and add more positions with neutral to negative roll, if the right setups present.
I’m not making any sense to myself, so I’m sure I’m not making sense to anyone else. Good night all.