Life On The Buy Side

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I’ve studied the metagame for a very long time. My entire adult life in fact. That having been said, I can tell you that if you study it long enough, at a certain point you realize that the whole point of studying the meta is to more effectively play the underlying game. Not relevant to your life? I dunno. Maybe you’re right, but the way I see it we’re all playing a game whether we want to or not. Life - despite how you may view it – is a game that many people would like to win. I happen to be one of those people. Unfortunately, the life I had been living outlived its usefulness and needed to be restructured. I couldn’t hit my future goals without shedding certain legacy items. In effect I needed to go from zero to fully functioning hedge fund within 6 months, and when you set that kind of goal for yourself; it really clarifies your priorities. You’ve no doubt noticed that I haven’t been around the site much lately. My apologies for that, but I had bigger problems to deal with ...

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Where we are…

I feel like I should explain a few things. The portfolio is down 4% and moving lower. I imagine there are at least a few of you wondering WTF. I’m obviously stressed about it. How could I not be? But in the larger picture the drawdown we’re experiencing is not only expected, it’s almost preferred. Coming into this business has, and will continue to, require the development of complex new skills. Skills I continue to work on every day and skills I don't even know I need. And every skill I’m forced to learn is going to cost me some money. Here’s what my $4k education bought me: 1. An appreciation for the differences between intraday and longer term portfolio based trading. 2. A real world test of the allocation model. We had an opportunity to find and clean up the bugs, as well as restructure a few components so that they better fit my trading style and personality. 3. The ability to psychologically handle up to $2k USD in daily volatility. 4. A working knowledge of how to lever the firm’s balance shee ...

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Dealing with the stress of trading

This business is stressful. This week was the first time I’ve ever had to hold substantial exposure through a troubled geopolitical environment, and I’m not going to lie; it was more difficult than I expected. It’s not the fear of getting caught out. I accept that the associated positions could drop to zero at any second. There are things you just can’t account for and nobody is gonna fault you for taking a hit on a true black swan. What makes it so stressful is the constant need to pay attention. Getting wiped out in a flash crash event is one thing, getting wiped out because you were slapdicking about when you could have done something to avoid it? Yeah, that’s just unforgivable. Still, it’s a temporary problem. There are different levels of crisis and while there is definitely some risk associated with the current Greece and China situations; both appear to have run their course. The powers that be in China seem to have made enough threats of violence to arrest the selloff, and Mr. Tsipras’ “No” referendum ...

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A final “May luck be with you”

Notice Trading is not a get rich quick business. It takes a LONG time to learn everything you need to start earning serious money. Of course, the upside is that when you do finally arrive you can become “Infinity Rich”, or wealthy beyond your present comprehension. Most people talk about wanting to become rich to one degree or another, and I think most people do really want to. Unfortunately, very few people are willing to put in the effort required. They want the magic pill for the quick fix or fuck it; it’s just not worth pursuing. I’m sick of dealing with those people. I’ve spent the better part of my life learning about and trying to master the trading skill-set. I am where I am because I took it seriously. I studied hard and focused on becoming the person I needed to be to succeed. For someone who really wants to make a career of trading - without having an MBA - you’re going to struggle to find anyone better suited to help you than me. You are the type of person who I respect, who I would be happy do ...

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Be Prepared

The incubator fund is now live.

See you Monday on the Trading Floor.


Getting ready to launch

Inevitably everything takes longer then it’s supposed to. It’s a given. And I try to bake it into my expectations, but I still seem to underestimate. I’m not going to bore you with all the details of why I haven’t been able to do much with the site these last couple week. I imagine the delays in launching the incubator fund give you some idea already. What I will say is that we’re right at the finish line. I have the LLCs for the firm and the fund registered. The bank accounts will be opened Monday. The brokerage account application has been submitted and should be open (hopefully) Tuesday or Wednesday. Soon as that’s done, I have $50k to start building a track record with. :D I’ve also plotted out the general outline of what we need to do to reach $5m AUM over the next 18 months. It’s not Ferrari and hookers money, but it can pay the bills and throw off some additional working capital for the firm. That having been said, there is a LOT of work to do. Thankfully it comes in stages and the one I’ve been in i ...

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The Role of Soft Skills in Trading

For most of my adult life, I've had a problem. While I've always been great at analytical processes like logic and dealing with numbers, I was at best socially insecure. For many years I went out of my way to avoid people. I didn't have many friends and those that I did have were kept at a distance. And the very idea of actively trying to make new friends was utterly terrifying. That was my problem really. Being insecure about my social skills meant a constant fear that I would say or do something foolish in the process of socializing and be forced to bear the emotional turmoil that comes with rejection. And it was debilitating. There was a time not long ago when I feared ordering a pizza over the phone and would make my girlfriend do it for me so that I wouldn't have to confront my social anxiety. Let's just say it was pretty bad. So when I tell you that the application of soft skills toward growing the fund is the highest and best use of my time, you should appreciate how hard it was for me to get there. Wh ...

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What it means to dream big

I recently re-watched Wall Street Warriors, and while I was watching it I was struck with a flash of valuable insight. In the second season of the show there is a 28 year old private equity guy named Brett Hickey, who at the time of recording had over $100m under management. As I'm watching this show I find myself asking a question; how is it that this guy at 28 years old has already accomplished so much? I'm 38 and I still haven't come anywhere close to that level of success. Which REALLY got me thinking... What is the difference between him and I? How is it that this kid can be 10 years younger than me, yet he's pulling down orders of magnitude more money? Is he really so much different? Is he better? Was he imbued with some massive advantage that I wasn't? In short, why him and not me? Then I started thinking about a friend of mine. He is a very successful man. He's built several multi-million dollar a year businesses, he's been 100% ethical in the process, and he really makes sure that everyone who is a p ...

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Things are evolving so quickly

Things are evolving so quickly and I'm struggling to manage my time. I really do enjoy the process of writing. It helps me organize my thoughts on a wide range of subjects and while I'm sure other have their own opinions, I think I'm pretty good at it. Long as I know what I want to write about anyway... Historically that was the problem. I wasn't sure what my site visitors would be interested in reading and the act of trying to figure that out was in itself destructive toward my creativity. So I wound up writing very little. And the sparseness of the site was testament to that fact. But with this new business model... this new purpose for the site and my life generally, I now struggle with getting the content out fast enough. Every day that goes by I'm finding new insights to share, and discovering more knowledge that I need to convey to those who seek to follow me on this path to becoming a hedge fund billionaire. Just this week Effy and I have made huge strides in optimizing our trade discovery and analysis ...

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How to learn financial markets and trading

How do people really learn something? It probably seems like a question without need of an answer. After all we are all constantly learning things. Hell, babies and children do it automatically. How hard could it be? And if it happens automatically is it even necessary to think about how it happens? For most people in most situations it probably doesn't matter all that much. However, for better or worse I've taken it upon myself to teach a small army of people how to do something extremely complicated, and that being the case, I think about that question often. I do a lot of research on it too. As a byproduct, I've come to learn a few things about... well... learning. One of the big things I've learned is that different types of knowledge are learned in different ways. By that I mean; different types of knowledge require different PROCESSES of learning. For example, if you wanna learn how to be a plumber, the most effective path is for you to follow along with a master plumber for a few years. As you follow ...

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  1. Re: Dealing with the stress of trading

    @francaselles Agreed 100%!


  2. Re: Dealing with the stress of trading

    Hi There, The stress in trading is horrible as in any profession that involves RISK. As a traders we...