My account value reaches $600,000 for the first time; launching incubator hedge fund

[Rodney King]

Quote from the1:

I worked on the taxes after hours and on the weekends. It didn't interfere with my trading and as a result I learned a great deal about taxation.

"After hours and weekends" sessions would be better spent on research and development. But to each his own.

 

[dwpeters]

Quote from lazar206:

I guess in the next 3 years will have a chance to see how my account is handling a downturn market. From my point of view, if the market goes into a panic mode, that's the time that you can find the greatest values if you can meet the following conditions.
1. You keep buying on a consistent monthly basis.
2. You are very well diversified.
3. You are a buy and hold investor.
4. Have enough liquidity not to get a margin call.

I have used that by the last bear market (Dec 2008- March 2009) and it worked out extremely well…

Buy and hold is a scary strategy. I noticed that you did not respond on what your correlation to the market was. Perhaps your returns were due mostly to beta rather than alpha? I learned the hard way that strategies that can make money exceptionally fast may also lose it exceptionally fast, even if that was not yet seen in backtesting or live trading.

And the qualities necessary to succeed in trading are very different than those necessary to launch a hedge fund. Given your returns and account size you could make a very nice living just trading, even if your future performance is less.

 

[lazar206]

Quote from Cache Landing:

Should be easy enough to notice correlation to the broader market. Anything higher than about 50% correlation and his performance is simply average. OTOH, 20% correlation and it is respectable, but still not abnormal.

My focus for the last 2 years was, to buildup my account value with limited risk. My goal has been, and still is to be able to get annual decent returns over the long term no matter which side the market goes. There will always be drawdown’s when the market tanks and goes into panic, but it’s the performance from quarter to quarter and year over year that I am most concerned about, and with that I have been very successful.

 

[atticus]

Quote from lazar206:

I guess in the next 3 years will have a chance to see how my account is handling a downturn market. From my point of view, if the market goes into a panic mode, that's the time that you can find the greatest values if you can meet the following conditions.
1. You keep buying on a consistent monthly basis.
2. You are very well diversified.
3. You are a buy and hold investor.
4. Have enough liquidity not to get a margin call.

I have used that by the last bear market (Dec 2008- March 2009) and it worked out extremely well…

I think you should go the fee-only RIA route. Nobody is going to be interested in a (sic) diversified buy-and-hold hedge fund.

 

[TradeMetal]

So you went long Apple hugh ?!

 

[lazar206]

Quote from TradeMetal:

So you went long Apple hugh ?!

Yes , Apple is currently around a 0.33 of a percent of my portfolio.. (2k out of 600k).

 

[intradaybill]

Quote from lazar206:

Yes , Apple is currently around a 0.33 of a percent of my portfolio.. (2k out of 600k).

2k will buy you 5 shares of AAPL nowadays

 

[atticus]

Quote from lazar206:

Yes , Apple is currently around a 0.33 of a percent of my portfolio.. (2k out of 600k).

You can't be serious. You bought 5 or 6 shares?

 

[Ghost of Cutten]

Have you traded during a bear market? If not, then does your strategy have techniques for avoiding major losses during one? What is your expected performance if the S&P falls 30%, or 60%?

 

[lazar206]

Quote from atticus:

You can't be serious. You bought 5 or 6 shares?

I bought 20 shares of apple last year for $258 each, since Steve Jobs has left because of an “undisclosed” medical condition I felt the stock is becoming more of a gamble, I sold most of the positions for $337. I still hold 6 shares.