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Why I do not see pure stock strategies investing in large caps?

C2 is a great idea. However, I see many strategies which are ultra risky, based on market timing and do not rely on proper risk management. None of these portfolios will be in a serious hedge fund.
Isn’t there proper filtering of those strategies or simply the folks here do not understand the characteristics of good portfolios in general and therefore supply of good strategies suffer, because no one appreciates them?

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Thats absolutely right as it seems that most of the subs in C2 seem to gravitate towards high return strategies not aware that they could potentially lose their entire capital. The 10-20% monthly returns expectations seem to be the norm here.

In fact, those strategies that tend to make on average 1-2% monthly have very little interest. The only assumption is that most subs are unaware of the risks of high leverage systems or that they are only investing a portion of their funds in these high risk systems and have invested the majority of their funds in other investment vehicles like real estate or gold or ETF’s.

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Agree, two options are probable and both of them not good for C2.

First, the investor base does not understand risk management and seems C2 is not educating them and leaning them to high return / unmanaged risk strategies for some reason. Which is reinforced by human nature to seek the maximum outcome.

Second, may be strategy developers with wide investment universe are too smart to put anything valuable here.

I am thinking of putting long/short stock strategy, but I do not like that everyone can see the trades even before buying the signal, as it is more fundamental and low turnover. Although, here again C2 encourages you for high turnover. I would rather prefer leave my strategy for some incubation period, so C2 and other investors know this is a good strategy and then be able to charge for it, simultaneously not allowing non-subscribed investors to see my recent 3-months trades. I wish there was such an option. If I am not able to lock my trade data for some time, very likely I will not be using this service.

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Hello HaykGrigoryan,

You write the right things and think correctly, but here it will not work and you will not have followers. Strategies with a profit of 10-20% per year are not popular here. There are other projects for this, where you can show your talent in trading and get at least 10-20 times more than here.

Michael

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Simply rotating SPY, GLD and TLT one can achieve annual return of 8-9% for free. Rotating TQQQ and TLT one can achieve 15% annually for free as well. So no reason to pay for such strategies 150+$/mo. :slight_smile:

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The person can buy your signals for one month and get the whole previous history. :slight_smile:

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Thanks Michael,

Yes, my strategy goes one mile wide and one inch deep. I do not see any improvement neither in backtest nor in live signals when I squeeze the signals into the trails. Higher return is not justified by less hedging capability and diversification.

Trading only several instruments and hope on good timing sounds more risky to me. I am not a judge, never tried to build a system which will try to time the market. May be people here are more successful. Anyway, I agree I will not be putting my strategy which involves buying and selling 150 stocks in largest 500 caps simultaneously.

Yep, that is additional drawback. Although that is ok, since after 2-3 months they would like to return if they see a result.

I do not think there is a free lunch. If that 8%-9% is free, why it is not taken away?

If you can make 15% a year consistently even during a recession you would be one of the best managers in the world…

You can compound that like whoa, if you can do that start a real hedge fund

Some time go I was looking on US stocks and the conclusion I made - in case of really bad market crash (like 2008) they all go together as a single instrument. During market growth phase yes, they are more or less individual.

Man, we are not going be rich. :frowning:

Recipe is above, nobody hides it.

US market grows. I bet that your system is profitable due to the same reasons.

it’s not 8-9%, sp500 has done 3.7% CAGR over the past 20 years

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Well, my strategy is long/short, I cannot claim being completely beta neutral, but still strategy on average performs relatively better during bad years, which is a good hedging property. Sharpe Ratio is 1.00, combined with slight beta Sharpe Ratio becomes 1.2. These results since 2004 in the backtest. In live signals since 2018 the Sharpe is even better around 2.8-3.0. Although it is better than historical, I will stick to expected Sharpe Ratio of 1 going forward.

Yea, from peak of 1999 not much to geain

That’s true, but I didn’t talk about S&P.

What was then? In general if some return is easy to get, then that is not alpha, but rather contains certain risk factor. For example, I can sell dollar and buy emerging market currency and with that local bond with high yield. Very likely I will get both good returns on interest and on appreciation of the currency, but things might work for ten years and then all of a sudden crash and losing 90% of capital. May be that never happens in 30 years and my impression I am getting risk-free return.

Actually many hedge funds work with that model and it is legitimate way of earning money. Basically they are selling insurance and are compensated for that by the market. But it is not purely risk-free endeavor.

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