I figured that’s the first thing someone would think of upon hearing “7x” which is why I mentioned “This was done using a variety of strategies across a large number of individual names” in the OP.
Right, I wasn’t disagreeing with you, just explaining why 7x isn’t strong evidence in my own words.
Can you please give some examples of such people? I wonder if there are any updates or lessons there for me.
Yes, but I don’t think there’s a huge amount of value in doing that. If you spend any time following stock touts on twitter / stock picking forums etc you will see these people quickly.
To be clear, I have no interest in dissuading you from trading. You’ve smashed it—you have confidence in your edge—go wild. I’m more cautioning people from following you thinking this is easy. Financial markets are extremely competitive and hard. It’s easy to mistake luck for skill and I don’t want other people losing money they can’t afford. I generally find posts like this are net-negative EV.
But why would you need ~1k trades to verify that I was not doing particularly high variance strategies?
I wouldn’t with something like that. However, assuming 250 trades each done on 5% of your capital, you’d need to be returning >15% on every single trade to return 7x. My experience say that’s unlikely, but ymmv. If that is the case then yes, you have serious edge and please take my money. (Especially if those are after tax returns!).
I don’t supposed you’d actually want to do this? (I also have some privacy concerns on my end, but maybe could be persuaded if the “value added” in doing this seems really high.)
I’m not sure what the value would be for me doing it? I’m not sure adding my word saying “I think this guy is legit because I saw a track record” would bring much value to either of us. I guess if I worked for a fund which might have interest in hiring people then I guess I might. But at the times when I have been in those roles, if someone turns up and makes implausible claims about returns, I politely show them the door.
I’d guess 20-50% above market returns is a realistic expectation if market conditions stay similar to today’s, and I hope I can still outperform if market conditions go more “out of sample” but I currently have no basis to say by how much.
I wish you the best of luck. I have never achieved anything close to those levels of returns, but would sorely love to do so.
If you spend any time following stock touts on twitter / stock picking forums etc you will see these people quickly.
The people I follow generally don’t advertise their track record? For the hedge fund manager I mentioned, I had to certify that I’m an accredited investor and sign up for his fund letters to get his past returns. For the ones that do, e.g., paid services on SeekingAlpha that advertise past returns, it has not been my experience that they “then fail to do so out of sample” (at least the ones that passed my filter of being worth subscribing to).
I generally find posts like this are net-negative EV.
Personally, I wish I had seen a post like this 10 years ago. My guess is that there’s at least 2 or 3 people on LW who could become good traders if they tried. Even if 10 times that many people try and don’t succeed, that seems overall a win from my perspective, as the social/cultural/signaling and monetary gains from the winners more than offset the losses. In part I want LW to become a bigger cultural force, and clear success stories that can’t be dismissed as “luck” seem very helpful for that.
Especially if those are after tax returns!
Pre-tax.
I have never achieved anything close to those levels of returns, but would sorely love to do so.
Maybe try some of my tips, if you haven’t already? :)
Right, I wasn’t disagreeing with you, just explaining why 7x isn’t strong evidence in my own words.
Yes, but I don’t think there’s a huge amount of value in doing that. If you spend any time following stock touts on twitter / stock picking forums etc you will see these people quickly.
To be clear, I have no interest in dissuading you from trading. You’ve smashed it—you have confidence in your edge—go wild. I’m more cautioning people from following you thinking this is easy. Financial markets are extremely competitive and hard. It’s easy to mistake luck for skill and I don’t want other people losing money they can’t afford. I generally find posts like this are net-negative EV.
I wouldn’t with something like that. However, assuming 250 trades each done on 5% of your capital, you’d need to be returning >15% on every single trade to return 7x. My experience say that’s unlikely, but ymmv. If that is the case then yes, you have serious edge and please take my money. (Especially if those are after tax returns!).
I’m not sure what the value would be for me doing it? I’m not sure adding my word saying “I think this guy is legit because I saw a track record” would bring much value to either of us. I guess if I worked for a fund which might have interest in hiring people then I guess I might. But at the times when I have been in those roles, if someone turns up and makes implausible claims about returns, I politely show them the door.
I wish you the best of luck. I have never achieved anything close to those levels of returns, but would sorely love to do so.
The people I follow generally don’t advertise their track record? For the hedge fund manager I mentioned, I had to certify that I’m an accredited investor and sign up for his fund letters to get his past returns. For the ones that do, e.g., paid services on SeekingAlpha that advertise past returns, it has not been my experience that they “then fail to do so out of sample” (at least the ones that passed my filter of being worth subscribing to).
Personally, I wish I had seen a post like this 10 years ago. My guess is that there’s at least 2 or 3 people on LW who could become good traders if they tried. Even if 10 times that many people try and don’t succeed, that seems overall a win from my perspective, as the social/cultural/signaling and monetary gains from the winners more than offset the losses. In part I want LW to become a bigger cultural force, and clear success stories that can’t be dismissed as “luck” seem very helpful for that.
Pre-tax.
Maybe try some of my tips, if you haven’t already? :)