30 December 2016: A new cold war?

On Thursday, US President Barack Obama posed sanctions on Russian companies and expelled dozens of suspected intelligence operatives from the U.S. It is a punishment for the alleged involvement of Russia in cyberattacks that interfered with the presidential election in the US and is one of the biggest diplomatic confrontations between Washington and Moscow in the last decades. What will the reaction of Vladimir Putin be? Will we enter a Cold War 2.0? We cannot tell what the outcome is, but it might be the prelude to the uncertainty that will be characteristic for 2017. Be prepared for rising volatility…

white-chapel-logo-smallUS indices hardly moved. They all suffered small losses, but no more than 0.12%. Volatility made moderate gains: the VIX added 3.2% and our UVXY ETFs rose 2.7%. Return for the year for White Chapel went up to 286%. Return for the quarter is above 25%.
White Chapel did not give a signal at the end of yesterday’s session. We’ll finish the year with UVXY ETFs in our portfolio.

Accumulated capital at close of previous trading day

Return since start

Return this year

Return this quarter

$38,607

+286.07%

+286.07%

+26.1%

Our initial capital was $10,000 at 1 January 2016. Our average Annual Return is 293%.

RS_v05-small

René’s Reflections @ Friday: Salt

If there is one thing I’ve learned from 2016, it’s that predictions and forecasts should be taken with a grain of salt. Maybe it’s because of the dynamics of today’s over-connected technological society. Everything seems to change more quickly by the day, at a pace so fast, that even with the help of our highly advanced big data analytics tools, we are not able to get a grip on the underlying currents that move our society in unexpected new directions. Predictors and forecasters are continually baffled by the unfolding of new realities that have little or nothing to do with whatever it was they saw coming. There may have been times, when predictions could be made with a certain, acceptable degree of accuracy. But these were simpler, slower times. And they are gone. I think that anyone who is still pro-actively adjusting his or her investment portfolio based on predictions and forecasts, should think again. Nowadays, a drunk monkey with a dart board might be just as good (or bad) a forecaster as anyone else.
Some headlines from the media in January: “Analyst: Here Comes the Biggest Stock Market Crash in a Generation” (Fortune). “The market will drop more than 20%” (CNBC). “The January Effect May Predict a Dreary 2016 Market” (TheStreet). Not to mention Brexit, in June. And Trump, in November. The list is endless. Let’s face it and call it for what it is: we-really-do-not-have-a-clue!
Now I’m off to the supermarket – I ran out of salt.

These Dutch Guys wish you a happy, healthy, and prosperous New Year 2017!