What Worked In 2011... And What Didn't

Tyler Durden's picture

Back in mid-May just after the market had topped for the year, in a post titled "The Great QE Unwind Compression Trade(s)" we told readers to "focus purely on Utilities and Consumer Staples as the long leg in a compression trade, while shorting Industrials and Consumer Discretionary, leaving Financials alone (John Paulson's projections of Bank of America hitting $30/share by the end of 2011 notwithstanding)." Granted Financials were by far the worst performing trade of the year although with the possibility of a Fed bailout around every corner, it was imprudent to be short the sector (rather going long various unique opportunities such as MBIA proved to be a 100% return in months if not weeks). Instead, we referred to precious metals, namely gold, as a natural hedge against any potential Fed (and global central planner) stupidity. So how did anyone who followed our 2011 advice do? Well - the above three suggestions represented three of the five best performing sectors in the year (with the shorts not offsetting any gains). As can be seen below. Which we merely bring up to those who, counterfactualy, desire to brand this site as some fringe lunatic goldbug asylum. Which we are not saying it isn't: we urge most people to stay out of stocks entirely: the possibility of another flash crash is always present. For those for whom capital preservation is of paramount importance, precious metals are the way to go. But we realize there are those for whom career risk means being involved in stocks, and we realize that they represent a substantial portion of our readership. Which is why we try to be of use to everyone who comes here.

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nope-1004's picture


we realize there are those for whom career risk means being involved in stocks, and we realize that they represent a substantial portion of our readership. Which is why we try to be of use to everyone who comes here.

Even MillionDollarBonus_?  Tyler, you're too nice.

Gold and silver is the common mans' only protection as the corruption train chugs along.

trav7777's picture

utilities did pretty well...totally defensive, risk-off year lol

AldousHuxley's picture

The best investment of 2011?


Long term US Treasury bonds....TLO....up 30%



fear ruled.

trav7777's picture

in terms of large asset class, yeah.  My personal accounts that I trade did very well, I hit some homeruns on some energy stocks, specifically Trilogy Energy I got into at 6.2.  The MLP class did pretty well.  It is the 401k mutual funds that blew chunks.  And to think that all of us pay these people to do worse than we can do on our own.  Would have rather had the whole pile in KMP, at least it pays a dependable yield.

Max Fischer's picture



Trilogy (TETZF) never traded at $6.20. 

It started trading in April 2010 around $8.50 and only briefly dipped into the 7's.  Not to mention the fact that it trades only 1K or 2k shares/day.

Max Fischer, Civis Mundi

smiler03's picture

New Avatar CPL?? Less conspicuous ;O)

francis_sawyer's picture

What worked in 2011:

MONEY PRINTING.....................................................MONEY PRINTING........................MONEY PRINTING...................................CAN KICKING..........................MONEY PRINTING..................................................................................................................MONEY PRINTING............................................................................CAN KICKING..............................MONEY PRINTING....................................CAN KICKING.........................................................MONEY PRINTING....................................MONEY PRINTING...........................CAN KICKING

What didn't:

Everything else (but it looked like it did & the Ministry of Propaganda tells you it did)...

--- There, fixed it...


economics1996's picture

Eggs up 81% and milk 11.2% this last month or two.  Here comes the bull rush.

mophead's picture

What worked and what didn't? Who cares. Did anyone notice that we opened and closed the year at SPX 1257 ??? Hmm... what a coincidence.

Max Fischer's picture



Gold and silver is the common mans' only protection as the corruption train chugs along.....

In a thread entitled "What worked in 2011," it seems somewhat laughable to include silver.  Or perhaps someone could explain how silver "protected" investors from manipulation and corruption this past year? 

Silver has done basically nothing for most of modern history, with exception of a small bout of mania in the late 70's/early 80's.  We happen to be in a similar period of lunacy, but it's quickly deflating like it did before.  In my judgement, silver is a awful long-term investment - totally dead money with periods of extreme volatility and mania.  


In the following link, look at the very bottom chart.  Doesn't look good:


I've never been able to understand why silver gets worshipped like it does.

Max Fischer, Civis Mundi



nope-1004's picture

I agree, silver did awful in 2011.  The takedown was enormous and the 5 margin rate hikes in 8 days really should have killed it.  But it ended the year basically flat.

Amazingly resilient.

How did your hedge fund do?

.......  oh, sorry.


TheFourthStooge-ing's picture

nope-1004 laid out the facts:

I agree, silver did awful in 2011.  The takedown was enormous and the 5 margin rate hikes in 8 days really should have killed it.  But it ended the year basically flat.

Amazingly resilient.


Silver - it takes a licking and keeps on ticking.

How did your hedge fund do?

.......  oh, sorry.

It's funny because it's true.


Pegasus Muse's picture

"I've never been able to understand why silver gets worshipped like it does."

Silver Shortage This Decade, Silver Will Be Worth More Than Gold -FutureMoneyTrends.com


If Silver Goes Down All Hell Will Break Loose In The Physical Market: Silver Investment Update


Might be time to getcha some. 

suckerfishzilla's picture

Silver has been in a bear market for over 600 years.  40,000 tonnes of Argent mined from Mt. Potosi in Peru on the backs of slave laborers and brought to Spain helped to usher in the decline of Silver prices.   The establishment of the Bank of England in 1694 has probably had a huge hand in the shorting of Silver prices.  Not to mention the looting of Silver of both China and India which was then dumped on Europe's economies.  That was during the Victorian era.  The crux of the matter to me as a buyer of Silver is not the investment potential.  That is a disingenuous discussion.  The markets are rigged.  I am part of a collective effort to force price discovery in the Silver market while guys like you pretend like none of this happened.  While guys like you pretend that 41 bn ounces of Silver hasn't been unmined I have been buying.  While the real Au/Ag ratio is most likely less than 10 guys like you have been pretending like it isn't.  Guys like you have been pretending that the worldwide Gold inventory hasn't grown larger than the worldwide Silver inventory.  It's guys like you that inspire me to buy even more Silver.  I would find it very entertaining indeed if you didn't own Silver. 

suckerfishzilla's picture

Excuse me.  There was a bear market in Silver for over 600 years.  The recent Bull market has only been running since 2001.  This Bull Run might last 100 years or more.

I am a Man I am Forty's picture

oil stocks did well this year, apple did well this year, anyone who is anti-stock is too fucking dumb to pick winners, many stocks are natural inflation hedges, verizon has been a great stocks to own, there are many great companies to own.

i am a big fan of gold, but i get so fucking sick and tired of u tunnel vision assholes that think you are fucked unless you only own physical gold.

I posted a couple weeks ago to buy HTWR below 64, it's now at 73, easy money.

Yeah i'm drunk, so what. 



trav7777's picture

yeah, there are a lot of issues out there, if you can pick good stocks, that did very well.  I've only had a very few losing trades on these types of things lately, due to geopol risk on miners.

Pike Bishop's picture

I'm pretty sure I'm the only retail equity mid-term trader left.

At least once a week the algos wake me up, so they have somebody to play with.



maxw3st's picture

For those who like to brand this site a "...fringe lunatic goldbug asylum." How did you do last year? Ready to start paying attention yet, or would you prefer to just keep shoveling your money into your broker's pockets?

YesWeKahn's picture

Only played long and short ETFs, got 50% return in 2011. But, ZH is still the best place to find truth.

One suggestion: please post possible bullish news as much as bearish news. I found that I only discover them on ZH two days later when ES already reflects it.

maxw3st's picture

I'll stick to forex, where the manipulation is more transparent and therefore useful to all concerned, not just insiders.

monopoly's picture

I just do not understand why any of you listen to what Zero Hedge has to offer. Makes no sense. All you have to do is follow Robots advice along with a touch of Million dollar bonus and you are all set.

Easy money. :)

And then there is this bridge in Tuscon AZ. I am trying to sell...Hmmmm!

stopcpdotcom's picture

I've got a better bridge in London for sale.

Honest guv.

smiler03's picture

All you have to do is follow Robots advice

Yep, provided you have a working time machine :O)

ZeroPower's picture

Wonder what will be advocated by the ZH crew throughout '12.

My first guess is gold, silver (x1000), stamps.

My real guess is gold, US/EU IG, and MBIA.

Tyler Durden's picture

With QE a matter of time, financials may ironically (for the career risk crowd that is) be an interesting bet for those constrained to equities.

As for everyone else, we agree with SocGen on their top QE anticipatory trades.

One thing we can guarantee with 100% certainty: debasement of paper currencies will continue.

Ghordius's picture

"One thing we can guarantee with 100% certainty: debasement of paper currencies will continue" - Ah, at least some certainty in this world!

"...this site as some fringe lunatic goldbug asylum. Which we are not saying it isn't..."

 - Shucks, Now I Am Confused - is it or isn't it?

Yen Cross's picture

 Perhaps, "Roger Waters greatest hits" , is your mantra? Dip shit! I called the usd long in October. Just watch June!

css1971's picture

It's always better to be underestimated.


Zadok's picture

Happy Saturday to you Tyler,

I am going to take this opportunity to present a contrary possibility.  In lieu of the commonly anticipated QE Version X.X and the reason for the delay is because the 'market' is behaving like Pavlov's dog.  

What if it is a set up for the introduction of a new currency based on the 'successful' history of the Euro.  To usher this along we need to extend the pain and crank it up, hence, hinting at more QE but not delivering this time after many times demonstrating that is what will be done.  It will encompass a much larger market, Europe, North America, and Asia perhaps.  Based on the learnings from the Euro.  

In summary, since the robbery has worked so well, and since no one is really held accountable, lets close down the current fraud before it comes apart and institute another one in its place with bigger and grander ideals.  What better way to perpetuate the fraud and kick the can down the road a bit further with newer and upgraded methods of confusing the sheeple.  Essentially, the new currency is a bigger, better, faster, cheaper version of the old one.  

I am throwing this out as food for thought.  Not a prediction though...No significant new QE, new currency introduction within approximately 18 months, no outright collapse but simply a grinding depression that wears away at everything and eventually gets us all.  Wars, circuses ratched up for sufficient distraction, new currency portrayed as the 'solution' to the existing 'failed' currencies.  

Taking the high level view, it seems this is a valid possibility.  



Ghordius's picture

"introduction of a new currency" I heard a rumor about some Dutch, German and Swiss interests planning of setting up a "commercial currency" that would be a mix of commodity financing, a commodity futures exchange and a bank.

This would create a new commodity-based private-currency based on the needs of the harbour of Rotterdam. sf?

Yen Cross's picture

 So you are locked and loaded @ 1.12500 on eur/chf? 

Reese Bobby's picture

I read Currency Wars over the Winter break and I agree with Rickards:  The Bernank's entire playbook is ZIRP and stoking inflation fears.  I also agree with Jim Rogers: All the Fed knows how to do is print money.  Finally I agree with Kyle Bass:  All the CB's will print more money.  So: Gold is on sale.  Buy 'em!

Tyler Durden's picture

One needs to read a book to understand what is glaringly obvious? Odd

GeneMarchbanks's picture

Stimulates the AMZN shares though...

Reese Bobby's picture

You must be the stupid Tyler.  I believe once you assume you know everything you are about to learn a tough lesson.  But I'll mark you down as a "books are worthless" guy.

Tyler Durden's picture

Not everything. Just, as noted, the glaringly obvious - that the Fed will print.

Out of curiosity, does Rickards have a book yet on how LTCM unleashed the same TBTF culture that he enjoys not so much these days?

And, btw, ad hominem always definitively proves one's point. Or something.

Reese Bobby's picture

I bet this is your way of apologizing.  I accept, or something.

Tyler Durden's picture

One is free to bet, or assume, anything. That's what makes a market.

StychoKiller's picture

Free to play/bet with loaded dice -- didn't work out too well for Yudhisthira

Urban Redneck's picture

Books, in and of themselves, ARE worthless

Look at the sheer volume of books put out by the assclowns running for political office (not just the WH) and their ghost writers.

For six and a half centuries books have been a convenient mechanism for recording and transferring information and critical thought.

In the good old days, when we all walked for miles in our bare feet just to get to school, the barriers to successful publishing and distribution at least kept some of the more worthless information and thought from being put into books.  

The internet opened the door to the widespread two-way flow of information and critical thought that was never possible in books, radio, or television 

The internet, however, has also debased, whatever baseline standards ever existied for the widespread distribution of information and thought. 

Pick your favorite or most outlandish and BS nutter consiracy, your fellow ZHers could point you to an entire library's "worth" of books on the matter. 


s2man's picture

Always nice to see you down here in the comment section with us, Tyler.  If you ever reply to one of my comments, I'll print it and frame it, even if it makes me looks like an ass.

Do you like my new avatar?  I wanted a cool monochromatic one like yours.  So I made one of Dale Gribble, because of his penchant for conspiracy theories.  I've swallowed that Thunder Road report hook, line and sinker.

YesWeKahn's picture

I rarely read any book. I still consider myself an intellectual.

Nowadays, knowledge can be acquired in more than one way.