Cross Country Solo and heading back to LA

Been racking up the hours in the plane. Mostly for utility but also for training. I am 7-9 days away from the check ride and from that point I’ll insta do my IFR. I’ve already got 230 hours with 9 hrs solo. Yesterday I flew CNC3 to CYKF and back solo which was cool but also not that complicated or hard especially compared to a busy uncontrolled circuit at a training heavy airport like CNC3 (Brampton).

I found KVNY (Van Nuys) the busiest general aviation airport in the world to be easier because it’s controlled. The ATC spaces you and tells you what to do. AT CNC3, which is busy and uncontrolled (there’s no tower), there’s like 7 students training in the circuit at any given time. On my second day of solo circuits, I had one student line up on the runway as I was like a 1/4 mile final. Literally about to land but he’s there! So I had to full throttle. pitch up and apply right rudder and do a go-around which can be somewhat unsafe (lots of accidents happen from this). I radio’d to the guy, while I am doing this, and told him I was on short final and that I am initiating a go-around and to hold tight (don’t take off). He nervously acknowledged and realised his (big) mistake. He obviously wasn’t paying attention and didn’t check final or hear my radio call. Bad form. Like I said above, it can be a tiny bit dangerous if not done coordinated. You’re full power and pitching up which causes the airplane to yaw left (p-factor and all that). If you don’t put good right rudder and manage the plane, you can have an accident as you’ll flip to the left and dive/stall into the ground. There’s been a few fatalities this year already in the Cirrus. The G6 new generation I have does have envelope protection and loads of great safety features but you still have to be diligent and slowly advance throttle, pitch-up (but not too much, just the typical nose up climb attitude) and right rudder and don’t put up the 50% flaps too quickly (90 knots or above)! That’s a huge mistake people make.. In a plane this powerful, you can just arrest the fall and then coordinated and carefully/diligently do the go around. All in all, I’ve had to do 7 go-arounds @ CNC3 due to improper spacing and the incident noted above.

In other personal aviation news, I demo’d a sweet M600 SLS last week. It’s a jet Turbo prop. I’ll eventually outgrow the Cirrus as the kids get larger. It only fits 5 and with dogs, I can’t take even close to full fuel. The M600 SLS is pressurised, it’s a jet-engine which is 10x more reliable, and you can fit tons of weight into it and get 1400 NM. I’d be lucky to get 700nm fully loaded. But it’s a spicy meatball. The 100 dollar hamburger becomes the 1000 dollar oyster 🙂

I think the demo pilot thought I had a lot more experience than I did because he let me fly the thing from start to finish (an unassisted take off and landing). The thing felt so different from a piston. The controls were super heavy requiring a lot of trim after take-off. But get this, it’s approach speed is the same as the Cirrus. 85 knots. The landing was a tiny bit hard but man for the first time flying a turbine, I was pretty happy with it.

We’re off to LA tomorrow and I’ll drive the family to Chicago where they will board a flight. I’ll then drive the rest of the way for another roadtrip with Chris

(Chicago–>Lincoln–>Denver–>Utah–>Vegas–>LA)

I’ll spend a week or so in LA then fly back to finish up the PPL and then we’re off to Necker for Ash’s 40th. After that, I am back for the WSOP (hopefully it’s going to run) and I’ll finish up IFR and by December hopefully I’ll be flying Ash and I around for mini weekend vacations. I also might go out to Europe to see Heaven Shall Burn (fav band) perform. The idea was that I’d rent an SR22 there and fly to 3-4 of the shows. We’ll see! By the new year, I’ll be flying the family around having hopefully racked up 400+ hours and IFR rating in pocket.

As for the trades this quarter, it’s been a slow period of low vol and I expect it to be pretty lack luster relative to the other quarters. Probably a 5-8% gain but who knows. We’ll see how it all plays out. We’re half way thru the quarter now and it’s been like 1-2% but with decent of theta and opportunity for EOQ.

That’s it for now, gotta go pack and get ready for months of travel and experiences…first thing I am doing when back in LA is a comedy club ! One of my favourite activities. I went like 5x when we were there in May.

Trades: The Year so Far

For the last several years, I’ve gone deep into the “lab” working on backtests and coming up with portfolio compositions that work. The focus has been on the reduction of variance by diversification which in turn increases geometric return and lowers time spent in draw down. We aren’t perfectly diversified but every little bit helps. We focus on what we can do which is spreading out the time of entries, spreading out the types of income trades (each with their own nuances and own particulars) and we spread out the type of black swan hedge each has. A fully entered campaign takes 11-13 weeks and involves putting 1/13th the portfolio in action per week across 3-4 different types of income trades. Each week is a different spot in the market and represents different strikes. This gives us skew diversification and naturally allows for older trades to hedge/protect newer trades. Not only that, but the entries of the black swan hedges (inherent and built into each income trade) are also spread across different strikes naturally through time.

Are each of the income trades perfectly diversified? No, but they are a bit and that’s the best we can do. They each have their own quirks and weaknesses and any bit of help we can get in diversity helps with the reduction in variance especially by having their entries spread over time. As well, each income trade has it’s own brand of BSH which is quite different from each other. All of that helps.

The tests we’ve done (we can only really do from 2014) suggest an annualised return of 43% or so without the black swan factory (which is a separate portfolio of trades). We’re on target for 25% this year so far and we’re at 41.11% since April 1st, 2020. If you go 1yr, it’s better, at 50% for the last 12 calendar months. Pretty closely matching. We’ve had no Black swans since April 2020 so the results match. Now, If you couple in the BSH factory the returns go drastically up (due to the events of Aug 2015, Feb 2018 and March 2020) to an average of 70% a year backtested.

Of course, now that everything is compiled and running, I am just following the system and doing the trades as they were tested. It’s got to be the most boring year of trading I’ve ever experienced and that’s by design. It’s systematic and there’s little draw down or stress. I am fully aware that during an event or crisis, it’ll be a fun few days but there shouldn’t be any draw down to deal with, just a maniac removal of risk and locking in BS profits. It won’t be boring and that’ll come sometime but during the normal days, it’s about as benign as you can get. Systematic, emotionless, and predictable.

The active research is naturally to find a 4th or 5th strategy that we can combine into the already existing infrastructure to further reduce variance. Eyes are open but nothing makes the cut just yet. It’ll take a lot to make it into the mix. The focus now is on opportunistic addition of BSH during IVTS spikes and black swan factory composition research. My life job is to eye up new strategies (that are in my realm of skill) and to see if they’d work and fit well, to focus on convexity and composition of trades that provide convexity (positive exposure to black swan)

Planes, Gains, and Automobiles – Part 3

We departed Santa Fe, NM for Lake Powell, Grand Staircase in Utah. It was a longer drive but a much much more fun drive compared to the previous legs. We had long stretches of road, I mean, I bought this car so I could “gooo faassster” which is the point of the car, no? Probably my favourite purchase ever. Or maybe it’s a mid-life and I crave too much attention, either or.

Nearly every gas fill-up or stop, people come up and chat about the car, which is cool. Most didn’t know they made an SUV. So it’s mostly about that. One guy had an extra tire back in Albuquerque and wanted to send it to us for free in LA. We exchanged info and he’s seriously going to send it for free when we were back. What a nice guy.

We got to our stop in Lake Powell (Under Canvass) which is a glamping type setup. It’s a series of tents (most have hot running water, fire places etc) with a common area, restaurant, fire pits. Very cool. Comfortable camping. Always sleep pretty well when I stay in Under Canvas. Wish I could have stayed an extra day here, well, actually in each location just to see the sights, but we were on the road each day for about 6-8 hours.

Grabbing some good solid video and shots

At night time, with the ridiculous camera in the iPhone, we got some pretty cool night shots. Went exploring a bit while slamming some Truly’s and Scotch which was probably a bit irresponsible. You can see the stars in the shots. Yeah, we were climbing some small cliffs….bad idea with Davis (the dude below).

Actually, a night shot. It was pretty black out but this is what the iPhone Captured

We woke up pretty early the next day, got ready for the shortest leg which was to Vegas. We had plans to hit up Monzu Pizzeria (best pizza ever), meet up with my poker coach (didn’t happen as we got tied up) and to basically just muck about showing Davis the city (he hadn’t been there). I’ve spent a lot of time in Vegas during the WSOP (a month at a time) and it’s been a while since Covid, man, the emotions of competing flood back in. Though my family does come visit, it’s often just for a week or so and I’m there alone playing tournaments each day which is an interesting mental state deviation from normal life both negative and positive. Hard to explain but I can’t wait for the next WSOP in October so that says something! I’ll be licensed PPL and can fly myself to and from LA (1 hour flight) without disrupting the family too much re having to stay over. I can fly back when I bust a tourney.

We got in, expecting to ball it up and get valet at the Wynn but it was closed so we just parked in the normal structure, got our bags and got to the rooms. We ended up opting for two suites as we were sleeping in the same accommodations the whole way down and they were super cheap being during the middle of the week and Vegas was fuckn’ empty! The most eerie thing ever. Check out the pics here. Not a single person at the pool etc. Was so weird to see. No europeans, No Canadians just Americans …it was like the whole rest of world was removed from the mix.

We ended up having Monzu, going to Venetian, touring the strip and then having some sushi at Sushi Mamba. After that, we got free drinks at the Wynn and played some BJ for fun. We lost. But it sparked me wanting to get back into Card Counting and bringing the team back (Ash and I did on our road trip back to Canada in about 2 weeks from this trip and it was awesome…)

The next morning, we had breakfast and started our final leg into LA. Fresh as daisies, thanks to (I seriously think it’s a life hack) Drip Drop. I take these electrolytes that I found out about in Necker. They’re a powder thing you put into water …I’d do like 1-2 during the night when I am drinking and 1-2 in the AM and I seriously have zero hang-overs and negative effects. Highly recommend. We used every single day this trip and we had some messy nights with zero issues next day.

Next up, LA, which was arguably more messy and eventful than the whole trip!

As for trading, the entire trip, the trades just increased in value but we did hit stagnancy in P/L from about Jun 4 to present as the market vol increases. All in all, good results, I think it’ll end up at 25% for the first half of 2021 which is exactly as modelled. It’s been steady since 2018 H2 and quite boring which is what we’re after. Boring trading is good trading. The whole setup is a play on diversification. It’s diversified in time, entries, types of trades, types of black swan hedge and this creates a smoothing of volatility which allows for better compounding. Older trades hedge off newer trades, this most recent down move and vol, is actually preferred by the entire portfolio as we’ve had older trades like Aug, Sep entries that have a hump built up. All of this together, creates a system of trades that don’t care about any market move. That’s the point. It can feel slower, boring and unexciting but it’s steady and it’s $

Planes, Gains, and Automobiles – Part 2

We made it to Austin sometime around 8pm and as we entered the city, three homeless guys came over with metal buckets and shit in their hands dancing around the car, I hadn’t been so nervous in a long time. They just danced and said some stuff and left, thankfully. The nightlife was insane, definitely pre-covid levels. We bar-hopped and had some Indian food and called it a night. We ended up waking up at like 11am which was nuts. We obviously needed the sleep from the flying and driving up to that point I guess. Flying 9 hrs in a prop makes you really tired because of the vibrations and lack of pressurisation. Speaking of which, Chris had got his second vaccine the day before the flight and was reading 76% O2 levels…he wasn’t feeling to good so we reduced altitude. There’s not much you can really do when flying from California towards Texas, Santa Fe is 7500 feet above sea level. Is what it is.

Anyways, we didn’t take many pictures there and left pretty early in the AM towards Oklahoma City. It was pouring rain most of the way which made for slower driving. When we arrived, the valet met us and was super excited, he hadn’t been in a Lamborghini but had it tattooed on his face! We had to ask him for a picture!

The hotel was actually pretty damn cool, it was an art hotel. We admired the art and then made our way into town. At every bar we were asked if we had guns on us. That’s new for me. Seemed like a clean cool small city. But like most of the stops, we didn’t spend much time exploring, more or less, driving during the day and hitting the night life since it’s been so long since we’ve been able to just go out and have some beers in a bar with-out restrictions. The next stop is Santa Fe, New Mexico at a 5-star resort where we had hoped for a more low-key relaxing night.

Here’s some pics of the art:

During this week, the skew changed and I noticed a lot of profits incoming, might have been the most I’ve seen to date actually in $. I think it was about 7-8% total gain on the week period. So yeah, it was a big week for gains which was strange…usually when I go on a trip, I am dealing with chaos, it’s just how it goes for me usually 🙂 Made the trip all that much better. We had gone through a period of about 1 month where the balance did not move at all. I notice that a lot but the piper has to be paid eventually so I knew it was coming in eventually.

On to Santa Fe, I hadn’t realised it was so high up (7,500 feet) but I noticed similar physiological things as I do when flying up high so googled it. I was right. We were high up. I probably should have known that but it was neat that I could tell something was up (no pun intended).

We got there, had some dinner and walked all around for hours, eventually we ended up at a real, and I mean real, local bar. The patrons were literally a cast from the movie clue. It was ridiculous but super fun. We had a biker gang in there, we had a random dude with a peeked hat acting super sketchy, some random old guy rolling cigarettes and then us in bright designer hoodies…The pours at this place, omg, half glasses of Tequila for $6.

Santa Fe is also an art capital of the US. I almost wanted to buy some but it’s gotta wait.

Next stop Under Canvas Lake Powell….to be continued.

Cross Country – Planes, Gains, and Automobiles. Part 1

Ordered a new car in Houston (got it for a steal) and had an instructor pilot fly with me and a friend to drop us off and take the plane back then made a 2000 mile road trip back with a friend to LA. We went Houston –> Austin –> Oklahoma City –> Santa Fe –> Utah –>Las Vegas –> LA. Wild trip in a wild car. It involved planes, some significant gains and a car.

The trip started with some eventful memories. We had planned the first leg to be KVNY to E98 (Benson Municipal), a small airport with some cheap fuel. We landed and the guy that was supposed to be there to fill the plane up was AWOL. We had did some quick calculations and looked for an alternative airport, luckily there was one just 9 min away (we were in the middle of the desert). So there was a chance we weren’t getting off the ground with the reserves we had available unless there was a close by airport.

Beautiful day but the thermals caused some issues with winds, so the landing was one of the trickier ones that I’ve done. We landed with about 45 min reserve which is the Cirrus specified and suggested minimum. We didn’t have much room to the FAA 30 min reserve (we had like 15 min radius to find another airport). Luckily, there was one just 9 min away and after calling to confirm they’d be there, we took off!

Middle of nowhere (Benson Municipal airport)

No Fuel here……

So after doing the calculations, we took off to the nearby Chochise airport where we had another incident, the lady there wasn’t wearing her hearing aid and we told her fill it to tabs (airport slang for filling it up to a specific marker that allocates 60 gallons of 92 total). We were over weight at full and we couldn’t take off if it was above 60. Well, she filled it to full and we had to milk the plane… There was no way for us to take off. Luckily the instructor knew how to milk the plane. She ended up giving us a refund on the unused fuel and we took off towards Houston shortly after. All told the trip took about 6.5 hours of flying.

Milking 345PK

Was tempted to watch some sweet flicks on the VHS but we had to make up time!

Enroute to Houston..the final leg!

The pick up. Beautiful! Such a ridiculous car, almost embarrassing but whatever, it’s a childhood dream so why the fuck not. We got it for under value due to a guy not being able to close on it and I took that opportunity to acquire the car. I can literally sell it for a profit in a year.

We left Houston for Austin during a literal rainstorm. Along the way, we stopped at a small Texas town and had some Mexican food. I don’t think I fit in there, got stared at hard by five pretty burly guys. After checking the market, it was time to leave…

On our way to Austin…listening to some Heaven Shall Burn for the boys..

Trade Compositions for 2021

So far through 2021,

For the income portion: I’ve been doing equal parts HS3EZ, 488 and 484 along with an ATM campaign leaning bearish. This helps provide a lot of diversification.

For the convexity portion: I’ve been doing BSH factory + opportunistic entries of additional black swan insurance (haven’t had to since Feb).

I’ve just started using a base LTI as well

Pretty boring, pretty simple. I’ve found now that I rarely care or even look at what the market is doing. I just enter and add adjustments when required. The first quarter was great and so far April is pretty stagnant but with a lot of potential and I’ve got a solid formed campaign both for the income and convexity portions as well as live LTI. Looking good into finishing Q2. That 48x theta has to come in sometime.

That’s pretty much the summation of how I’ve been running trades through the year. Very boring weekly entries of 48x and HS3EZ plus the management of the convex black swan portfolio. Systematic with intent and with little regard to timing of markets re entries and adjustments. It works.

The intent is to continue to investigate variants and other trades that provide some diversification to the portfolio but I haven’t had anything really pop out. I’ve got some interest in the 0DTE and looking at it from a professional gambling standpoint re edges and trade sizing but I just haven’t had the ability to jump in yet. Probably a summer thing. I will probably finish up a 486 backtest to add to the research. That’s probably all that’s on my radar.

I can’t go into the individual trade compositions because of community privacy etc but you can get more information at the mastermind group, Ron Bertino runs a few awesome well constructed courses there and the community you can become part of is a private one where we share info and strategies and as such we’re mandated to keep specific details private as it’s not fair to others in the group.

Apr 28 2021 – 15.5% Quarter and a 43% year

Been pretty absent from posting which has obviously become a habit. I’ve been all over the place the last 3 months and I think the lack of routine affects my ability to get posting which is contrary to the blogs intent especially with the travel portion. I just get caught up in new experiences and get behind in other aspects and my life becomes a time-balancing act but a well balanced one in regards to life and work balance.

We had flew into the US in October of 2020 to begin flight training and take possession of our plane. Exciting in and of itself, but probably a bit irresponsible given the pandemic was full blown at the time but we were committed with our long term renters in Cayman coming in at the same time. Cayman had no local transmission (and it was totally normal life there) so it was a pretty iffy decision, is what it is. We had expected to finish up the PPL there before Christmas but weather and thanksgiving instructor schedules got in the way and we weren’t able to finish so we left Dec 9th to get the quarantine over with before Christmas holidays.. As fate would have it, that didn’t matter, Canada went into full lockdown during the holidays

It was pretty exciting though because we took possession of our new home which has such an epic design and quality. Karin Bohn helped with the interior design, and subsequently the project got all over her YouTube channel which was pretty cool and my good friend Chris designed and helped build it. He put his heart and soul into it and it shows. I don’t think I could ever sell it. We had started planning the house back in 2016 as we’d planned on staying in Cayman and having a great home base in Caledon, Ontario which was near all our families but plans had changed with respect to where we’d school our children and LA became the choice. We’ve rented our house in Cayman and now will just go back and forth between Canada and LA. Anyways, we stayed there till about March when we went back to LA (with the intent of staying 2 weeks) to start searching for our primary home (we found an awesome house/project in Hidden Hills), but opportunities arose to finish the PPL in Knoxville, Cirrus went and picked up my plane and I flew to Knoxville to train. I ended up staying behind and trying to finish up that pesky PPL while Ash went back with the kids to Canada. I finally solo’d and made a ton of headway towards the license. We’ve done the training pretty unorthodox as we’ve used the plane several times for utility trips (picking up au pairs, family, flying to various places for $100 hamburgers etc). So I’ve gained experience in so many different ways. Here’s some photos of the training and solo.

While in Knoxville, I got the vaccine (Pfizer) and worked hard on the PPL which went really well. Had some incredible experiences. I flew with my instructor to pick up the family in Canada. The original intent was to go back in April but the pandemic in Canada got so bad that it just wasn’t worth staying. So we grabbed them, whisked them away from the never-ending lockdowns and explosion in COVID cases and brought them to Knoxville for a week. Here’s some photos of the Canada pick-up, the dogs were excited to see me (oh that was another new thing this quarter, we got them in January, I was afraid they’d forgotten about me but from Teddy’s reaction here, it was clearly not the case.

We stayed in Pigeonforge and I got to fly back and forth to Knoxville for training and finally solo’d and was about 10 days away from check ride, but we had closed on the house in Hidden Hills so we went there for a few weeks (here now). Another cool experience, I got to fly the dogs and cat to LA from Knoxville. Wild. Here’s some pics from the super long cross country from Knoxville to LA

Teddy in the back, chilling.

We’re in LA now until about June (assuming Canada gets better). Then we’ll be back in September full time. Whirl wind of a life lately. Looking forward to settling down where I am just making my way back and forth between the two houses. But have to say, I’m loving this neighbourhood and the general area. The kids are live in school (finally) and we’re looking forward to the big life change from the Caribbean to western civilisation.

Here’s a few photos of the new neighbourhood plus a cool sketch/art of the project.

Isla rocking her new bike
Putting up a TV. Getting innit.

Despite all this wildness in life, the quarter was great, doing 15.78%. Finally moved towards non-discretionary trades and by March, was fully allocated. Throughout the quarter I furthered some research efforts into ‘meta-portfolio’ construction and the movement toward a more time and skew-diversified approach with respect to my individual trades. The sum of these individual trade types within the total portfolio of trades allows for a smoothing of variance which allows for better compounding of returns over time. I’m thinking long term, and I am approaching my portfolio of trades with wealth conservation and low-risk growth as the primary objectives. The result and implementation of lowered volatility by way of diversification will yield a better compounding of returns over the course of years. I am lowering the volatility tax, and in turn raising the profitability of the portfolio of trades. In my opinion, compounding via the reduction of portfolio variance is the true secret to beating the markets.  A high volatility portfolio that averages 15% per year could underperform a very low volatility portfolio that averages 10% a year over the course of a few years. Taking this concept and applying it to the portfolio of trades is the focus and part of the edge.

Jan 2 2021 Trade Portfolio Updates

Didn’t get as much as I wanted done because …Holidays and distractions… enough said 🙂 Despite that, I’ve hit the ground running and I am working on creating some meta portfolio management which I mentioned in my last post. The idea is to really take advantage of diversification across strategies that aren’t correlated to create a combined time series that provides increased geometric returns by way of lower drawdowns and better compounding. What Mark Spitznagel coined as a volatility tax. We reduce that and pay less “tax”. If you have a lower return each month but you have less draw down, you compound it better than a higher more volatile strategy and so on. To me, it’s all you can do, diversify (smartly) and not just for the sake of diversification but true meaningful diversification. I wouldn’t ever just put all my eggs in one single strategy in one single week with a planned capital the size of my portfolio. There’s just too much reliance on how those specific strikes and BSH will react. Plus, it’s sorta fun having previous entries mature and act as mid bear hedges, harvesting and knowing that a single entry with bad timing is only 1/10th (well really 1/30th) the portfolio is a nice thing. It takes time to build up sure but it’s like 2.5 months. Who cares.

There’s a series of OTM (out of the money) type strategies (3 of them that I use) combined with a bearish toned ATM (at the money) trade to pick up the middle bear (non crashy moves ie Aug 2019, Oct 2018, Dec 2018, Jan 2016). Each of the OTM income portion is diversified in mostly its strikes but also the type of BSH it uses to pick up during a crash. A 488 will react differently then a 484+BSH then a HS3EZ (not saying I use those well, maybe idiosyncratic versions of one or more of those) both in it’s income production and income engine as well as its black swan hedge that it utilises. There’s some diversification, it’s not perfect but we work to reduce that imperfection by time diversification across 10 week campaigns (1/10th at a time) along with 3 additional BSH/Vol hedge type campaigns. The 3 BSH vol hedge type campaigns are factory based (ie they build up over time) and they are meant as a triple redundancy insurance towards the 4 other income strategies. But in reality, they should produce lotto like returns in a crash. One of the BSH/Vol type hedges actually generates income and helps compensate the costs of the other two. We then have as much redundancy as we possibly can both in the income strategies by way of time, strike/skew diversification, and BSH diversification built within the income strategy plus we have 3 additional BSH like stand-alone factory type strategies that should provide full assurance during a a crash and most likely a lotto return. Not sure you can do much more than that.

It’s systematic and the fact that you’ve got 10 different things to manage reduce human factors at a cost of management complexity which is my job anyways.

Speaking of which, I feel lucky to have found something that I wake up looking forward to and what will likely occupy the rest of my working life. I doubt in my life that I’ll ever pursue entrepreneurial projects again. I went through my 20s and 30s setting up some successful businesses w/ my wife and two other partners that I still manage (mostly as a board member). I give over-arching direction and make sure things are running in line with the plans set forth but there’s no day-to-day which set me free. We started the business in 2004 and I finally got out of the day-to-day around 2017. I just never liked dealing with humans and human issues in the workplace. It gets complex quickly and is often irrational and I feel just out of control when dealing with human resources. I know that’s super odd to say but maybe I can expand on it. I started a software company and I am not a software developer. Maybe that helps 🙂 I have to rely on my team to correctly advise me while making business decisions and dealing with customers demands while having an expertise that was relevant but outside the central operation of the business. Make decisions, go back to team, they tell you impossible, you know it is possible but can’t be quite sure because your experts are advising you and you fight and they end up getting it done /// rinse repeat. I always wanted my “money making” life to be me and a screen and that’s it. Very few outside “human” variables, very little reliance on anything but myself, my decision and the game environment we call the market. When something went wrong, it was something that was on me. Something that I could perhaps think my way out of. Not something where I had to rely on someone else. That was my goal and though it took like 5 years to really work that out (trading is hard…mostly because you have to meet parts of yourself that you might be unfamiliar with…and protecting yourself from yourself takes practice and time..and really just a system and recognition).

In my opinion, the attributes (besides the obvious skills) necessary for successfully trading is self reflection/humility, ability to take risks and tenacity. If you lack one of those, it ain’t going to happen. The risk taking portion has to be smart, unemotional and well thought out..with outs and with a system. One thing I’ve learned in life and I’ve seen it time and time again is that you can’t talk many people out of taking risks when they’ve become emotional about it. I can list like 10 situations which made me cringe and are very poignant lessons, some are horrible. It’s a specific type of person too. If someone decides that they are going to gamble, take a business risk, buy a stock, or whatever it is that has a possibility of changing their life trajectory, I found that it’s often very hard to talk someone out of that risk even if you give them good reasons. .Once they make an emotional decision, that’s it. But, if someone is humble and self reflective you can often advise them against and they back off and reflect. If you do take that risk, you need outs and you need to become tenacious (that’s where tenacity comes in). I took loads of risks in my 20s that I should never have, and now I have a process that protects me from making emotional decisions…I did have that tenacity though and the risks weren’t emotional though they were probably way to high a risk of ruin. Unfortunately, for success, you often really need the ability to take risk, you just can’t do it with emotional baggage. When I took those risks, I’d be like fuck ok…I’m in it now, then I’d create outs and I would literally not stop (sacrifice sleep (80 hr weeks) to make these risks work out. Stupid but tenacity got me out of jams and I learned that we often take risks for excitement, for that dopamine rush and to be very mindful of that. This is why you often can’t talk someone out of an emotional risk, they have already decided they need this rush this thing that can change their life (or destroy it) because they need to feel. When you do take a big risk, make sure you have control, several “outs” and be ready to commit your entire being to making sure you don’t fail. Tenacity, Risk-taking and Humility are the key ingredients. Look at the logo on my plane tail. Badger (Tenacious little fucks).

On to personal stuff, I got up in the air twice so far since being back (quarantine affected that). What a wild experience though, we flew to Muskoka (took 24 min from Brampton), then over to Toronto to do a fly over of the city. We asked the tower to do a direct fly over of YYZ (the busiest airspace in Canada) and was approved. This is a once in a lifetime thing to do…it was EERIE cool. Not a single flight (landing or take-off) and completely empty. Here’s some pics. I’d write a whole lot more on the blog re what it’s like to do a PPL in a Cirrus SR22 if anyone had interest. I just don’t want to bore.

Back in the plane. No better place!

Downtown core (CN Tower and Sky Dome) Direct fly over

YYZ EMPTY! Busiest airspace in Canada. Pandemic effects..

My Baby. 3-4-5 Papa Kilo.

Meta Portfolio Compositions and back in the grind!

Made my way to our new temporary home for the winter and spring. The place will be our forever home in Canada and act as our main base. We still are trying to figure out if we’re going to make our way to LA for the kids education but we’re getting tired after this last build and move so who knows. That said, I miss how easy things were in Cayman, it was like a free-for-all in terms of pretty much anything/everything re being able to just live life. I am met with blocks on everything here in Canada. Everyone seems to want to create problems. It’s bizarre. They won’t even accept my international license or cayman license and want me to start off with a learners permit, they’re having a fucking laugh. I’ll just continue to use my Cayman license, just means I can’t register my cars until I can find some Canadian insurance company that would insure me without a CAD license. I also find myself talking on the phone to customer support for hours a day for a variety of things as well. Real life sucks apparently lol.

We’re here until at least the summer and though we’re 90% going to LA, there’s a small chance we’ll fall in love with this property and stay here. Though, man, I just don’t know if I can “regular” life it here like I said above. It’s probably irrational but there’s a lot of weird feelings about raising the kids here and I mean, its fucking’ cold. Though, having the plane now gives me some pretty cool options to escape and the hangar is literally 12 min from my house. I can fly to Myrtle beach in like 3.2 hours for instance. The property is 100 acres located just 25 min from Toronto international. So the location is perfect and close to the international airport and acts as a great base to our families (we’re both from area originally and our families are here). That was the intent…have a second home near our families but it became much much more than that as the project developed and the budget increased…..

One of my best friends designed and built it same as he did for Cayman so it’s been a fun challenging project and his tenacity for efficiency, his skills and his ability to keep the project a value creation device has allowed for a valuation much higher than what was put in. So I am super happy and both projects have provided me with value. He’s been actively helping me manage investments so it might be his pièce de ré·sis·tance or swan song as he moves more towards trading. Or perhaps he continues on but treats it like a hobby or it’s a bit of both. Who knows. Here’s a few cool pictures of the property (which isn’t 100% complete yet but liveable). It’s got a VR/Sim room which will be decked out with a star wall, RGB lights, and 4 setups (our family are PC gamers…no XBOX whatever or PS whatever allowed in here!). We have a sweet swimmable hot-tub on the second deck, an infra-red sauna, several cool fireplaces, a speak-easy etc. It turned into a true chalet like experience. Our furniture hasn’t yet arrived but I think it’ll be here in 1.5 weeks. We’re making due with what we have, it’s exciting because so much is not done and we’ve got limited furniture so it’ll only get better. Fun and frustrating at the same time I guess.

Probably the only space that’s 95% completed. The entry.

The outdoor ceiling is not complete yet but it’s coming!
Void of furniture but what a view!

It’s coming…
Missing the furniture but it works!

We landed in CNC3 a few weeks ago and hangared the plane. I still need some more hours but the weather has been shit and instructor availability as well. Things happened slower then I hoped. I really wanted to come back licensed fully.

The entire break I’ve been concentrating on meta portfolio construction as a means to reduce drawdown and increase geometric returns. I’ve come up with using 3-4 OTM style trades that we talk about in the PMTT Group as a base income producer and with my own spins and each are composed of 4 different types of BSH. These are put on in campaign style with the average being about 10 weeks of campaign. This gives time diversification. So we’re now diversified in entry timing, OTM income production and BSH provision. On top of this, I combine 2 black swan type campaigns that provide additional protection over all. Then I have an aggressive harvesting style that really translates into back ratios at a variety of strikes on older maturing trades. So basically, 10 different time entries, 4 different strategies, 4 different BSH styles, a bonus 2 hedge type factories and harvesting. About as tight as you can get.

  1. 4 Types of Out-of-the-money income strategies put on across 10 weeks giving time, strike(skew) diversification
  2. 4 Types of BSH protection put on across 10 weeks giving time, strike (skew) diversification
  3. 2 bonus types of BSH factories/hedges put on in campaign style across 4-6 weeks giving skew and time diversification and 2 additional fail safe swan protections
  4. Harvesting aggressively all structures that are matured

You’re left with creating less draw down and increasing compounding returns which is equally important to the trade strategy itself. It add complexity sure, but I mean, this is all I really do now and it’s systematic. That’s a preferred method for me.

I’m finalising all the time series for each of the campaigns from 2014+ and I’ve noted that there is adequate response differences to a variety of environments and together they provide a smoothing of return. In my mind and as I mature as a trader and as I have started getting consistent results, I’m convinced that the key to success at trading for a living comes with diversification both in time and in strategy. You take 6 known alpha producers and you do 1/6th each. It helps with human factors, as you’re much more likely to follow the system/rules if it’s just some annoying small part of the portfolio not the entire thing. The options market has a funny way of causing you to draw down from the tops.. You’ll be sitting at 80% profit target and one day you’ll draw down to 50% for no reason (market hasn’t moved) and you’re becoming price fixated and often times it does preclude a vol event and from there you’re just waiting for that old 80% to come back because you think you can rely on time. It’s a fools errand not to follow the systems and rules. You’re much more likely to do what you need to do if it’s just a 1/6-1/8th portion of your portfolio.

As mentioned before, the last 6 months have been pretty much straight opportunistic ebb-flow ATM style trades taking advantage of the environment. I’ve just started implementing a systematic portfolio based on the above post and from there that’s all I’ll pretty much do.

I am back at my desk for 8 months so I hope to blog more and post interesting things the best I can.

Update – Nov 25 2020

Been a long time since I posted which seems typical of my behaviour with this blog. A lots been happening, I just left Cayman enroute to Canada where we’re moving into our newly built house (will post about that separately, it’s pretty damn cool too!) but we made a month long pit-stop in KTYS (Knoxville) to pick up a tool that would help me with one part of this blog, traveling. I bought a plane.

Ashley and I both had nearly completed our PPL back in 2008 but had to leave urgently right (like literally a week) before our Check-out ride to Cayman. We had intended on coming back within a month to get it done but we just never did and then we had kids…andddd that was that. We hadn’t picked it up again until now because it was just impossible in Cayman. Anyway, we ended up purchasing an SR22T Cirrus which is one of the safest prop planes out there, it has its own parachute system (entire plane) and the automation is astounding. It’s fully autopilot and has synthetic vision, live traffic, weather on board etc.

Cirrus has been amazing to deal with, literally one of the best companies I’ve ever dealt with. They came (for free) to pick us up in the Vision Jet because we were sorta stranded in Cayman due to it being Covid free and being locked down to the rest of the world. My rep finagled it by calling it a demo. The normal protocol is that they’ll come pick you up in an SR22 (one person) and bring you to Knoxville to take delivery. In this case, they picked us all up and in the SF50 Vision G2 Jet.

That was a blast. Maybe or maybe not – am I trying to build up experience and hours to get into one of those lol. A bit of a dream.

The other thing, Cirrus just started a PPL program and we’re the first students to partake. We’re here in Knoxville for a month training every day in our plane which is pretty cool. We’re less than a week away from Solo. In our off time, we’ve been mostly hiking and enjoying the outdoors since in Cayman, we were quite limited to just the beach.

We started off flying the club plane (because our delivery was Nov 18th). I have some slight PTSD from the training. So the call sign 8-6 Mike Juliette brings me some pits in my stomach. The instructor was extremely tough on us.

During training one day, we landed and saw our plane had made it to KTYS (Knoxville) for prepping before delivery. Got a snapshot before they put it away.

Here’s some delivery day photos. What a day. It really was like 10 years in the making. The original plans we had in our 20s was to become pilots and live that freedom. Just life and kids got in the way. Now with the kids in distance/home school there was no better time to dedicate a month to training and eventually instrument rating in the winter to finally be able to cross country. The thing is damn fast and has a great range. 1000nm (~2000 km) and boots at 187-200 kts. It can go to 25k feet too and is equipped with oxygen and FIKI systems.

Here’s our first Cross country (Ash flew there and I flew back)

As for trades,

I pretty much de-risked into the elections and was mostly ATM trades. I’ve added 10-20% sizing in the last week or two but am looking towards eventually setting up a 488 campaign now that we’re out of high vol. I did put on some Feb ATM SPX trades and I am playing with similar BWB setups in TSLA (given the recent momentum move up and iv spiking again). So I’ll be looking for opportunities in 488 and BSH factory build up as well as dabbling in ATM. That’s about it.

I am >30% for the year and happy that I’ll probably hit 40% for 2020 and move on to a more stabilised systematic approach in 2021.