rcl

Trading. Trying to: ignore small sample size variability; get rid of ego; listen rather than predict. "There are no solutions, only trade-offs".

[rcl @rcl_twt]

A revised slide to help my terrible intuition with regard to compounding (and particularly the damage of '1 poor year'):

[rcl @rcl_twt]

@Anon_Progress A lot of what we have to think about with trading is subjective or has an element of randomness, but the maths of compounding is pure, objective fact.

So if, like me, your intuition about compounding maths is errored, it seems sensible to create some mental guardrails to help.

[rcl @rcl_twt]

A revised slide to help my terrible intuition with regard to compounding (and particularly the damage of '1 poor year'):

[rcl @rcl_twt]

@Anon_Progress Thanks. When I was doing the pairs, particularly the +140% & -35%, my intuition was "that clearly must be better than a sequence of +25% and +25%".

I had to redo the maths to prove to myself it's the same. And that was just a pair - my intuition gets worse with more periods.

[rcl @rcl_twt]

End of week update.

Exited: AUTO; KNOS; MSI.
New: None.

Pics:
1) Holdings in ⬇️size (<1% cash).
2) Completed trades (exc. PYX) per-month stats.
3) Completed trades (exc. PYX) rolling 12-month stats.
4) PF (inc PYX) M2M total return/CAGR/per-year history/indices.

[rcl @rcl_twt]

Exited today: MSI (just a tiny, remaining stub not worth the mental bandwidth).

Current holdings in decreasing size:

[rcl @rcl_twt]

@kab604 One of my favourite quotes:

[rcl @rcl_twt]

Exited today: AUTO.

Current holdings in decreasing size:

[rcl @rcl_twt]

@kab604 Individually, I have no clue either. I try to apply the same principles to general market as head/tailwind.

Like tossing a 60/40 loaded coin, it can still come up the 'wrong' side many times in a row. Just gotta keep betting on the 60 side and still have money to keep playing.

[rcl @rcl_twt]

@A1Mhigh To address your concerns about not having losing stocks and the returns being too high, think about each entry as being 'portfolio returns per decade' instead.

I think this still illustrates how I (and maybe others) incorrectly intuit compounded relative performance.

[rcl @rcl_twt]

Sorting out my emails and came across this old note to myself from years ago.

Still feels counter-intuitive to me that B's run is superior to A's, even after years of trying to ram this basic concept into my brain!

Trying to focus on routines that force me to 'be more like B'.

[rcl @rcl_twt]

@kab604 My typical holding period is ~1 month, so I'm happy to buy back in if a subsequent, suitable swing occurs (I appreciate it may not and carry on rising).

I try not to put too much time into understanding the companies as it biases me and I'm too thick to do it with any advantage.

[rcl @rcl_twt]

@kab604 Just seems like broadly positive news flow, with price low in range.

I find the less I know, the easier it is for me to sell on a rally and keep my turnover going.

I appreciate this may sound pretty dumb.

[rcl @rcl_twt]

@kab604 Just to be clear, by 'focus on turnover', I mean increasing the rate at which I turnover my portfolio.

[rcl @rcl_twt]

@kab604 My 'why' is probably not worth anyone's attention, but this year I've increasingly tried to focus on turnover, buying stuff that looks like it might be 'low' in range or trend (typically on daily timeframe), and sell it on the rally.

Most of the proceeds went to buy more MGNS.

[rcl @rcl_twt]

@kab604 Still have tendency to buy too early and sell too early on the swings. The 'day (or two) later' version of myself might do significantly better...

[rcl @rcl_twt]

Exited today: KNOS.

Current holdings in decreasing size:

[rcl @rcl_twt]

End of week update.

Exited: None.
New: BMY; MGNS; PBEE.

Pics:
1) Holdings in ⬇️size (<1% cash).
2) Completed trades (exc. PYX) per-month stats.
3) Completed trades (exc. PYX) rolling 12-month stats.
4) PF (inc PYX) M2M total return/CAGR/per-year history/indices.

[rcl @rcl_twt]

New entry today: BMY.

Current holdings in decreasing size:

[rcl @rcl_twt]

New entry today: PBEE.

Current holdings in decreasing size:

[rcl @rcl_twt]

New entry today: MGNS.

Current holdings in decreasing size: