Benchmarkless

Some of my peers are obsessed with their returns on a day to day basis. My view is: life is long and many things can happen. What might appear to be a gift today is an albatross tomorrow. I used to compare myself to others, benchmarks like the $QQQ and become morose when underperforming. But once you’ve achieved an unshakable confidence in your abilities fully knowing that on a long enough time frame things will spill your way – the only benchmark you have to measure against is time.

Today I made only 59bps, giving up 40bps in gains from an intraday peak. My longer term accounts, which are static, were higher by 1.5%. On the surface, this is miserable performance. But on a longer time horizon, my trading is +0.4% for April, compared to down 5.5% for my strategic and +13.5% for 2024 vs +4.5%.

Today could’ve been a +5% day for me had I concluded yesterday this was going to happen. I could’ve placed my entire account in $TNA and bask in my riches today. But that would be poor form and decorum, an unsustainable trading method that will undoubtedly lead to ruin.

Everyone has their methods and we are teeming with strong opinions about the future. But one thing about trading which is universal and not up for debate is position sizing portfolio volatility. I’ve said it a million times and I’ll say it once more for sincerity: position sizes should not be more than 5 to 7% for pros and for amateurs 3%. Overall portfolio beta should not be greater than 2 and more often, even for aggressive trading, be more than 1.5x.

Into tomorrow, I am 6% cash, 5% hedged via $LABD and the rest long, looking for a bit more in this bounce.