YTD - January 2026

Lotus

— 4 min read

January review

My best month as well as best start to a year. Returns were mostly from commodities. I traded around a bit, but anyone with a heavy portfolio weighting towards that or HBMs this month would have done really well by just buying and holding. While I feel good, I also feel like I was just at the right place at the right time.

Most of the month felt easy - everything just kept going up. At one point, when the portfolio was up around 25%, I started to feel like I should reduce exposure to protect gains, and wait for a pullback. Everything was working though - and I know that I need to push when things are working - so I stuck to the plan as best as I could, trimming when names got extended, and re-entering names at pullbacks.

When the YTD returns approached 50%, I started to feel a mix of disbelief, fear, and confidence. Again, made a conscious choice to keep pushing. At this point, SPY, Google, and various themes looked like they wanted to break out, which made me even more bullish. I started to get loose - began chasing different themes with poor entries, and got stopped out of most of them. Impatience combined with the confidence of having a nice buffer of profits had me feeling like everything was going to work.

Eventually, the blow off top in precious metals came. Rumors of Trump's new Fed chair was supposedly the reason reason for the drop, and most names I had exposure to sold off. Returns went from a peak of around 52% on 28th January to 40% on the 30th, as I rushed to reduce exposure when gold and silver came crashing down.

Strategy conflict

I am not dogmatic about how I make money in markets, but have in the past year concluded that swing trading is the best fit for my personality and timezone. For a period of time I was more of a buy and hold guy, but I can't get away from the feeling that profits are wasted when the positions round trip. Since then, I have been constantly trying to reinforce the habit of closing trades fast, whether for a profit or a loss

In the last couple of months though, I started accumulating positions in various junior miners trading at very low multiples, after coming across the idea in an investing service I am subscribed to. This presents a problem because these are longer term holds.

After a bit of a struggle, I decided that I would hold onto them and let them play out - if these positions re-rate like I think they can, they will contribute nicely to the portfolio performance. Profit is profit, regardless of time frame and style. As an additional bonus, they can potentially also act as an uncorrelated hedge against my trading.

What I could have done better

I made plenty of mistakes, but these ones stuck out for me this month:

  • Missed the leg up in silver starting on 28 November - I think I covered this previously, but looking at the size of the move now that it is over, it still bothers me that I missed the entry. I got the first leg up, from 27 August - 20 October, and also traded the 2 contractions in the pullback, but was caught off guard when it took off on 28 November. Did not help that it barely pulled back.
    • How to fix this: Be more aggressive if I really want to be in a position, i.e. if I have a strong view - at least take a smaller position to get exposure after it has broken out. When it starts to move up, and there is a buffer, I can then look to size up more. Alternative is to buy in more size at the bottom of structures, and trade around using partials, but holding on to the core to make sure I don't miss the bigger move.
  • Missed the silver blow off top - shorting has never really worked for me, so the likelihood of this working probably would have been low even if I tried. However, I do know how to look for topping signs, and after seeing a post by TheShortBear on X showing how puts on some silver miners went up as much as 150-200x in the crash - it was clear that I should have at least tried. Will be more ready for something like this moving forward.
    • How to fix: Still unsure, first step would be to spend more time keeping an eye out for topping signs in names/sectors, and explore different ways to express trades on the short side.
  • Closed out PBR 2028 LEAPs early - I bought these when PBR was at the bottom of its trading range. My thesis was simple - oil was weak, but PBR has a very low cost of production, which would allow them to keep paying their regular dividends, which should in theory support the price. Emerging markets theme has been strong, and Brazil has elections this year. Quite a bit of asymmetry if a couple of things went right. I sold the position to lock in small gains, because the price approached the top of the trading range, and I figured I would be able to re-enter when it pulled back again. Of course it kept going up, and while I did profit from the trade, I would have made about triple what I made if I had just held on until the end of the month.
    • How to fix: If buying LEAPs - I should hold on for bigger moves. If I want to lock in gains, trim and leave some to run.

Summary

Overall, happy with how the month turned out despite the big drop at the end. Looking forward, I feel more cautious than at the start of January, and am hyper aware that despite the strong performance, I could give it all back very quickly if I don't manage my risk well. For the most part, that means being patient and waiting for good setups, sticking to themes with tailwinds, and keeping stops tight.

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