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Hi Mark,
We have thought about putting a disclosure statement together, and have been
approached by several friends to put a small fund together but I'll go into
that later. And yes, we do have our futures statements for 1999 as well as
stock trading statements from the end of June last year, when we started
trading stocks.
We (that's me, my brother and my dad) have been trading futures for almost
50 years (actually my dad has been trading for well over 50 years as he's
91) and have made a lot of money and lost a lot, just like most futures
traders. What we're trading now is the result of too many years of work.
If you add all of the development time together, we probably have over
300,000 hours in the development of our system. I agree with your analysis
of my comments about the profitability of our system. You would think that
we would rule the financial world and Warren Buffet would be asking us for
advise, :) but if you search out some of my previous posts a year or two
ago, you would discover that while our trading systems and signals are
fantastic, we never, in 50 years of trading, looked into money management.
I have no excuse for this other than the fact that we are technicians and if
our system lost money, we would simply go back and revise the trading system
in order to improve it.
Thanks to several members of this newsgroup, we were pointed towards some
money management books and have started to apply these techniques to our
trading. Once we researched money management, we discovered that we were
guaranteed a 100% risk of ruin based upon how we managed our trading (even
with a system that was correct on at least 70% of its trades). And we
proved that over and over again. :) We have now modified our investment in
order to reduce the risk of ruin to less than 1%. Hopefully that will keep
us honest and continually growing (if we can keep the greed under control as
well as the walking on water when we get to many trades right). Under our
old methodology, we would have gone broke last November with our large loss.
Using our new found money management techniques, we made back 80% of the
November loss in December.
We're fortunate that we are able to fund our own trading and currently have
four futures accounts (for tax purposes), so this year should be a telling
year. Our stock trading is new, to us, and we only go back to when we
started in June, 1999. I'm looking into building a web site and posting our
equity curve, trades, results etc., but that's mostly an ego trip.
With regard to trading for other people, we're still discussing it. John
Bollinger is a friend of mine (he lives a couple of blocks over and our kids
went to preschool together) and he recommends we stay private. My brother
wants to stay private and build our own empire, but of course he is sitting
on a bunch of money from the sale of a startup to Lucent last year. I, on
the other hand am the poor one and would like to set up a fund where we
charge no fee, other than actual out of pocket professional fees like from
the auditors, and work on a 25% of the profit basis. My thought is that a
25% return from a large fund is better than 100% of our own accounts. We
have several people interested in doing that with us and we can set one of
those up here in CA as long as we keep the capital to $200k or less and the
number of people to 15 or less. Since we can do that on our own, even I'm
not interested. My thought is more along the line of a $2-5mm fund, so that
the numbers make sense. We have a lawyer looking at what we have to do if
we decide to go in that direction. We're not moving too rapidly and are
just continuing with our trading because as you say, if we can keep going
the way we've been going, in a couple of years we'll be talking real money.
Regards,
Guy
Fax (630) 604-1589
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]On
Behalf Of Mark Brown
Sent: Wednesday, February 16, 2000 8:01 AM
To: Guy Tann
Cc: metastock@xxxxxxxxxxxxx
Subject: Re[2]: Trading goals
Hello Guy,
GT> Nicholas
GT> Our "minimum" goal is a 100% annual return on total capital.
GT> Regards,
GT> Guy
GT> Fax (630) 604-1589
Guy think about what you said above OK .. If you were able to do that
you would own the world soon. Good luck on the road to reality, and
remember that a few trades taken on a very small sample should not be
annualized and expected to hold up to such a standard.
Professional Trader, Mark Brown
ps if you have a disclosure document send me one showing audited
profits and if they are as your goal states I'll invest with you and
quit trading!
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