Peak had accelerated gains into the end of the new year and ended with 59% gross return. Was not expecting that. I thought like maybe we match 2021 or inch towards 50%. Nice ending to the year and a nice boost to the performance fees that we only get once a year 🙂
In 2020, we had a gross of 40% (extrapolated due to starting in April)
In 2021, we had a gross of 44%
in 2022, we had a gross of 59%
What a nice 3 year to start to setting up a fund. I was pretty nervous at the start, with all the eyes watching and the pressure of performance and managing other peoples money. It’s something that’s hard to explain. I mean, we’ve got an auditor (Grant Thornton) looking at us, we have our independent fund admins looking at us, we have our independent directors looking at us, and most importantly we have investor expectations (both reasonable and unreasonable) and we have to deal with this each and every reporting period. For a guy that’s always been in the top position, it’s kinda hard to answer to people 🙂 but whatever, I go on these calls as myself (you’re not getting me in a meeting wearing a suit or a sport coat, it’ll be designer t-shirts and hoodies, I’m good. The success and performance speaks for itself.
I’m often asked why I opted to manage other peoples money, because it really doesn’t add that much more % wise to my personal bottom line. But I feel like it’s worth it to have accountability, but most importantly, it’s creating a new pathway that can create unknown opportunities down the road, we’re creating reputation and a very complicated structure to allow for further expansion into other areas and trade types. We have no idea where it will lead and I think keeping that momentum is important because it’ll shape the future. One thing I didn’t expect was the weird (maybe because I am getting older) pleasure I am getting in actually feel like I am contributing to society in a positive way by helping our investors setup their retirements. It’s really cool to see their balances increasing and being part of the team that helped do that.
All of this formality initially did bring me some trading and performance stress 🙂 That said, the yearly mandatory zoom meetings with the auditors, directors and admins is kinda fun because we’re crushing it, it was especially fun this year when 95% of the funds they deal with are down or consider -10% a success. I even cheekily asked “So guys, tell me, what’s it been like dealing with all these accountability meetings with funds that are down 20%+? Is it awkward?” I shouldn’t say that. It isn’t easy having the responsibility and especially when I first started, there was definite stress and a larger than life expectation I had on myself to really make sure the systems were setup and we traded appropriately.
To tie this up, the thing I learned in my trading life is that the management of risk is the most paramount thing above returns. Manage that and the returns come. They come because what seemingly seems like an arithmetic loss (buying long puts for $5k a month let’s say) feels like you’re spending $5k but in reality and geometrically (multiplicatively) and over time (several time series) the draw downs it saves on events allow you to actually compound better. You’ll be surprised to know that buying those puts actually brings in a return over time. The most noticeable affects when I first started was occasional second guessing and just how often you triple check things but we have extra eyes and systems for that now. I also have a huge confidence in my team, the systems and myself.
All in all, a successful start and I feel like this year is actually our most important year as we pass the 3 year mark. Can we keep it up?