No More Short Selling

I covered all of my shorts last week. 

Six were gains: Google, Mosaic, Research In Motion, Cimarex Energy, Transocean, and Akamai Technologies; and eight were losses - CME Group, Riverbed Technology, Cognizant Technology Solutions, F5 Networks, Cummins, Priceline.com, Caterpillar, and Aruba Networks.

I didn't cover in any kind of panic over the direction the market was taking, but I was eager to eliminate each and every one of my short positions once I completed a research project I'd been working on for the last month. 

After studying all 198 trades I've made over the last 8 years, I determined that short selling was clearly doing my portfolio more harm than good.

Here's a quick look at the actual performance:

Total trades: 198

Winning Trades: 122 | 61.6%

Losing Trades: 76 | 38.4%

Avg. Winning Trade: $40.77

Avg. Losing Trade: -$10.66

Avg. Trade: Gain of 71.6% | $20.12 | Risk-to-Reward Ratio (R): 2.51

Now, what if I had taken only the long signals?

Total trades : 102

Winning Trades: 78 | 76.5%

Losing Trades: 24 | 23.5%

Avg. Winning Trade: $49.60

Avg. Losing Trade: -$10.35

Avg. Trade: Gain of 140.0% | $35.30 | Risk-to-Reward Ratio (R): 4.96

Of course, past performance is no guarantee of future results... but for the foreseeable future (at least the balance of 2011), I'm going to try running a long only portfolio and we'll see what happens.

Just for the record, this leaves me long Apple, Intuitive Surgical, Precision Castparts, CF Industries, Crocs, Wynn Resorts, Netflix, Salesforce.com, Boeing, Potash Corporation, Shutterfly, Baidu, Acme Packet, Diamond Offshore, VMware, Deckers Outdoor, Citrix Systems, and Joy Global.