Notes On Q1 Performance, Gold, Ethereum, EURUSD

He also taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.

That’s from Bruce Kovner talking about one of the many important lessons he learned from his mentor, Michael Marcus.

We’re going to dissect that here in a bit. But I want to first get through some quick accounting. Then the rest of this note will be a short stream of consciousness, covering some things and trades.

First, the numbers. The Macro-Ops portfolio finished the quarter up roughly 25% year-to-date. That’s down from a YTD high water mark of 39%, but still not too shabby. Our overall execution has been decent, though I think we can improve on the way we think about and carry out hedging — that’ll be an area of focus for us going forward.

Our higher-than-normal portfolio volatility is the result of carrying Micron (MU) DOTM calls that have grown into a monster position. Which is a problem that we don’t mind having, but greater portfolio volatility should be expected as the calls get closer to in-the-money.

In other news, I’m trading in the World Cup Trading Championship this year. I’m in the Futures division. It’s a bucket list item for me to place in this. I competed years ago and was in the top three for a while, but then I blew out. I got a late start. The tournament kicked off on Jan. 1 but I didn’t get my account up and funded until mid-February. I’m up 16% at the moment and have my work cut out for me if I’m going to get into the top 3 (first place is up 83%).

I think it’s doable, as the strategy I run attempts to exploit Pareto’s Law to the max. In other words, its returns are very bunchy. I go through long periods of performance chop followed by wild bursts in returns off just a few trades. The strategy is an aggressive macro discretionary one. It’s one I started trialing last year. Here are the nine-month return and performance metrics via FundSeeder.

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Disclaimer: All statements are solely opinions and are for educational purposes only.

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