This is a short overview of my performance for the third quarter of 2022. Historical quarter write-ups can be found in the links below:
Summary
The overall strategy for Q3 2022 was simply to ride core thermal coal holdings higher while tactically shorting overvalued parts of the market. It worked to perfection.
July was +14.47%
August was +21.44%
September was +36.14%
Overall for the quarter I was up 89.3% (and +575% YTD). The equity rug pulls were especially vicious over the past few months, and I was nimble enough to take advantage with downside exposure, mostly through puts but also utilizing inverse ETF’s. But the big contributors were the seaborne thermal coal producers. WHC, TGA and NHC were severely undervalued and have seen a recent surge higher in share prices as market participants begin to figure out the value proposition and long runway for coal suppliers during this energy crisis.
Performance
Herewith the performance metrics and risk analysis for 7/1/2022 through 9/30/2022, according to IBKR’s reporting functionality:
Overall Performance = 89.25%
Max Drawdown = 13.91%
Sharpe Ratio = 4.14
Sortino Ratio = 8.01
Standard Deviation = 4.07%
Downside Deviation = 2.10%
Mean Daily Return = 1.05%
Positive Periods = 36 (54.55%)
Negative Periods = 30 (45.45%)
Capitalization throughout the period was:
Position Contributions
The top 5 individual trade contributors during the period were the following:
WHC common shares contributed to 9.96% of the overall performance
OKTA Oct21 90 Puts contributed 7.39%
TGA common shares contributed 5.33%
NHC common shares contributed 5.21%
FNGD common shares contributed 5.18%
Bottom 5 trade contributors:
QQQ Aug19 322 Puts contributed to -3.73% of the overall performance
TSLA Oct21 300/100 Put Spreads contributed to -2.45%
QQQ Aug12 300 Puts contributed to -2.33%
AMR Aug19 120 Puts contributed to -2.25%
META Sep16 155 Puts contributed to -1.97%
The following is a summary of the recent Coal & Energy news, curated by The Coal Trader along with a short snippet on the implications.
The Latest Coal & Energy News:
The Heating Season Started Early in Germany
Could the shoulder season be cut short in Europe?
“The days of sub $150/mt for coking coal are in the rear-view mirror”
Listen to these experts, they know coal better than almost anyone.
India to Boost Coal Power Fleet 25%
Here’s the reality of the world’s coal policy stance.
What if US Shale Production Disappoints?
There could be a long term shale production and productivity problem.
Germany’s Steag ready to bring back 2.3 GW of coal capacity
Will Germany give coal operators a longer runway?
The Eucalyptus Paradox – Mining Metals Supply Chain
The Koala explains supply chain and capex paradox.
Alexander Stahel’s epic tweet storm on European electricity
This thread is so good I had to save it there fore reference.
Wood is now Europe’s Largest “Renewable” Energy Source
This shouldn’t be a surprise, humans always tend to use the most energy dense fuel source allowed.
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Any views on TER.ax? I don't want to clutter my portfolio too much but it has performed well.
CT - Any thoughts on TGA. Figure the strike can’t drag on for too long.