Mea Culpa.. Kind Of
March 9th, 2007 by Buck Woodford
I was wrong.
Thankfully opinions do not always reflect results. The story of this recent trade for our ManyPeaks Absolute Return accounts in the Dow Jones Transportation index (symbol IYT) reflects that fact.
I really liked both the fundamentals and chart of this sector, and bought the first position in anticipation of a cup/handle pattern occurring. After selling into the big multi-day move, we quickly reloaded during that period of range contraction. Then, in what turned out to be nearly top-ticking the trade, we sold out just before an all-out collapse. 
Many trades aren’t this perfect. And I honestly thought the transports (railroads in particular) were on the verge of being the best trade of 2007. We owned some relatively large positions in UNP, BNI, and CSX which basically ended up breaking even after teasing me for a few weeks.
The point is that with an active approach and good risk management, you don’t have to be “right” to make money. I was wrong on a bigger timeframe, but this IYT trade was one exremely efficient use of capital.
