Let’s review what I’ve been doing to re-…

Let’s review what I’ve been doing to re-build my portfolio in broad terms.

From a strategic standpoint, I’ve been buying the best companies I can find in the App Revolution and the Cloud Revolution which I think will explode into a new bubble in coming years and I’ve complimented those longs with long positions in the commodities-we-consume like the DBA and a huge opportunity to catch the upside in the best companies in an upcycle like the auto industry and our Visteon long. I’ve been shorting the worst culprit of the mortgage service crisis and the too-big-to-fail banks who remain dependent upon welfare from the government to survive and also shorting companies and some of the companies on the wrong side of the App and Cloud Revolutions like Cablevision.

From a tactical standpoint, I’ve been buying when the markets have taken big hits like they did just days after I started building this portfolio and the Japan tsunami hit, crashing our markets and theirs for days. We bought common and calls and I highlighted each common stock and option trade I’ve been doing as I’ve been doing them for you dear readers. Likewise, I’ve been buying puts and shorting stocks after big rallies to the upside in the broader markets, using the higher prices as opportunities to build the dark side short bets.

And the fact is that both the strategies and the tactics have been working very well, as some of these readers have attested in recent emails:

Really enjoying your trading with Cody subscription. I just joined and I am slowly building up my positions and love the story. So far all my positions are up, unlike my other stock newsletters that I cancelled today. – Clay

Hey Cody, I’m delighted with your analysis, and I’ve made way, way more than your subscription price on my trades. My NUAN Jan calls are up 157%! – Jim

First of all, CY, and now NUAN have many times over paid for my subscription, with every other trade above water, except RVBD [editor’s note: RVBD is up 10% since we received this email]. – Dan

You paid for my subscription for the year. Bought the ZSL yesterday and probably sold early but got a 20% return in 24 hours. Great call. – Sarah

Like Sarah, I made 20+% shorting SLV. I also made 100+% on SLV puts. Also like her, I had to take the big profit off the table. Hopefully there will be another opportunity coming with SLV. I kept my short on GLD. Great timing from you. Thanks. – Larry

But let’s step back for a moment and set some expectations here. It’s not normal to correctly pick and trade 20 new positions over the course of 75 days or so, which is how long I’ve been re-building this portfolio now. We’ve had some big winners in the portfolio already, especially in some of our options trades, most of which were done with long-dated in-the-money calls because they weren’t even supposed to be short-term bets, even as I correctly thought we could juice our profits by navigating the swings like we did.

But here’s the real deal when it comes to trading — great traders aren’t going to be right 100% or 90% of the time. They won’t be right 70% of the time. Great traders build their portfolio slowly but surely, staying in the game at all costs, but they really only need to get 55% or so of their trades right over the course of the next ten years and we’ll be very successful investors with huge gains in our personal portfolios.

I’m proud and thrilled that we’ve got so many positions going so right for so many of our subscribers. But I want to be clear that I do not have a magic bullet for picking stocks and I will get some of these trades very wrong sometimes. I am human and I am fallible. I will guarantee you this much though — nobody will work harder, think freer or bring you more challenging analysis than yours truly.

In the meantime, respect the winning streak! And enjoy it.