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SweetHop.com. It's more than just a ticket. Today on Radical Personal Finance, we talk about what it's like to actually build from nothing. And I mean absolutely nothing. From nothing. What is it like to build an investment management firm? And here, I'm not talking about the type of financial advisor that I was, helping people with their financial planning.

I'm talking about somebody who's managing an investment firm. My guest today is Michael Melissinos. He started from nothing, worked his way up, and has been systematically building a standalone investment advisory business. And through the context of that business, we're going to talk about how to learn investing. We're going to talk about an investment strategy known as trend following, which is where Michael is an expert.

And we're also going to talk about building a life and how to decide between taking a job and building a business. Welcome to the Radical Personal Finance podcast. My name is Joshua Sheets and I'm your host. Thank you for being with me. I'd like to talk about investing. And we're going to talk on this show in the future with seasoned portfolio managers.

My guest today, he's not unseasoned, but he's also not a 30-year veteran. And so some of the emotion and the challenge and the learning process is still fresh and raw. And I think that's going to benefit you. Michael Melissinos is a listener of the show sometimes and he reached out to me and said, "Hey, would you like to interview me?

I got an interesting story." And I said, "Absolutely." And I think he's got something very valuable to talk about. We talk about the specifics of trading strategies. So those of you who are interested in trading and in different trends – well, specifically in trend following but in different types of investment strategies, you will enjoy this interview today.

It's a fairly lengthy one so I'm going to get right to it. One sponsor for today's show is Trade King. Trade King is the official brokerage provider for Radical Personal Finance. If you are interested in trading, consider using Trade King as your trading platform. $4.95 stock trades, they have all of the tools, all the education, all of the advanced models that you need.

So if you'd like to check that out, go to TradeKing.com/radical. Special bonus offer, $100 bonus offer for when you establish an account using that promo code TradeKing.com/radical. Also check out – if you're not interested in trading, while you're there, you can own any mutual fund, anything like that. You need to be careful, of course, to make sure it's a good fit to do through this type of platform.

But they have a managed portfolio platform that is basically their version of RoboAdvisor, well-run portfolio, low fees and that might be of use to some of you as well. TradeKing.com/radical. Michael welcome to Radical Personal Finance. Michael Radkin, Radical Personal Finance Hey. Thank you. Thank you for having me. This interview today will be interesting because I want to use your story to provide some insight for my audience into what it's like to actually build an investment business.

So to begin with, I'd like you simply to share your story. How did you wind up in a position of running an investment management firm? Oh boy. All right. Well, the drive to start one has always been there. I was a sports kid growing up. That's all I did with my time.

So I always had the drive to compete, always had the drive to be the best or just challenge myself and stuff like that. I was born in 1984, so I watched a lot of old football, Super Bowl type stuff. So I got really into Joe Montana, really into Jerry Rice and got really into when the Yankees got good because I grew up in New Jersey, so I was a born Yankee fan.

When the Yankees got good in '96, mid '90s and just started dominating, that's when my, I think, drive to separate myself and not fit in and not just get a job and not be like everyone else. I needed to be one of these guys that I used to watch, Derek Jeter, like I said, Montana and those guys.

And I just fell in love with absolutely crushing everybody at everything, in my case, sports. So when, obviously I go through school, play sports, I played baseball in college, but then I broke my leg in a really bad car accident going to actually a pro tryout. And that was pretty much it for my career because I had a bad break.

It was rod and screws inserted into my shin. It was disgusting. So fast forward, I get out of college, no longer playing. And then what do I do? I do the classic human thing and wimp out. I go and take a job. I take a job in public accounting, if you will.

And nothing wrong with accounting, nothing wrong with accountants. Wasn't you. But come on, you know, Joe Montan is not being an accountant after he's done playing football, you know. Come on. So this, it didn't really sync up and I always had like, God damn, I'm giving in, I'm listening to my dad, my uncle, my mom, because my uncle is a big accountant guy and he's like, you know, it gives you the best career path, yada, yada, yada.

So okay, I don't know anything, fine. So I did that and almost immediately, probably within like a few days, I was like, no, nope, this is not it. Nope. But still did the human thing, right? And, you know, began talking to myself, talk myself out of moving, moving fast.

And I sat there for 10 months, you know, went through the busy season type of thing and, you know, just went through that. So there goes 10 months doing something I didn't want to do. It didn't like that. Then I called my friend at Bear Stearns and is my friend since T-ball.

I went to high school with him. We were neighbors growing up. And I said, John, dude, I need, I need to get out of here. I got to get on the front line somehow. And Bear Stearns, people who don't know is, was a, at the time, one of the older investment banks in the world.

And it is now since gone. And that's where the story really gets good. So I ultimately get the job at Bear. And what was the job that you got there? Yeah, it was on a, what's called a market intelligence team. It's basically a made up team for when you're in a really good part of the business cycle and you start making shit up, start making jobs up that don't really do anything.

But, you know, so what I did was I, I covered the healthcare and biotech sector. So I worked with the, the healthcare traders, interpret news, prepare for events. And in healthcare, you have a lot of events like drug, drug approval dates and conferences, stuff like this. So I basically had to know everything about every stock that we covered and knew what was important coming up.

And if anything new, if any news hit the tape that that was important, uh, I had to know what it meant for what stocks and what had that affected earnings and yada yada, like pretty much know everything about everything. So it took up a lot of time. He was like, get up at four o'clock in the morning every day in the office at five and then be home at nine or something every day.

And, um, you know, quickly, you know, I started in October. So then in March, obviously is when things got a little wild. So March bear goes down and then I'm sitting there with the aha of, okay, maybe this isn't it either. Because during this time, you know, starting from, from that summer when I worked in accounting, which was summer 2007 through, through when bear went down, which is March Oh eight, I was researching and reading, um, reading into what I do now, which is, which is the kind of, which is the kind of trading that I do now, which is called trend following trading.

Um, and you know, just lightly learning about it. And then I, and then I started to get to the point where I started following the firms that were already, that were trading this way, these trend following firms. And, uh, uh, weirdly enough, they're not, they're not your brand name, wall street type of guys.

They're not on CNBC. They don't, they don't, uh, basically don't come into the public at all. Um, but probably the most famous one is, is John Henry, the owner of the red socks. He was a major trend following trader before he basically gave all that up just to become a sports owner.

So, um, uh, so we started, you know, learning and seeing how these guys, these traders would do really well when it seemed like everyone else wasn't doing well and seemed like when everyone else didn't know what the hell was going on and everyone's run around with their hair caught on fire.

So that was a big aha. When I started seeing these guys make a lot of money, when everyone around me was losing their job and losing their bonus or losing their, you know, their stock money, especially at bear, like a lot of guys lost everything. So that was my first big, huh?

I could do this. All right. But still I'm going to wimp out and just stick with my job for a bit cause I don't really know what I'm doing yet. So got into the more, more of the reading, more of the research. And at that point, you know, I was still working at a JP Morgan's JP Morgan bought bear.

And then I started, uh, I started working, uh, working on creating some trading strategies and I, you know, I use a lot of numbers and it's easy to, uh, you know, uh, you know, with trend following, it's usually systematic. So usually creating like a set of rules that are quantified, you know, use numbers for, to make decisions.

And, um, you know, so that was my, um, that was where a lot of us, I spent a lot of my time doing that over the coming months. And then October Oh eight happens. And that's another major aha. And that was a major, major point for, uh, these trend following guys to really do well.

And they had been doing well for many, many years before this, but I was new to this. So I was the first to, you know, I was starting to experience it in real time. You know, you can look at back track records all you want, but you don't really know where the numbers come from, how they happen because you didn't really live through the events and stuff.

So I started to see the real time proof and I could, I could couple it with the feeling of being on the front line. Like, Oh, this is how it's done. Ah, all right. I could do this. And then I, then I started getting more confident with that. I can, I can actually do the thing and start something on my own.

And, um, so we all got laid off in January Oh nine. Um, that whole team I was on and, and then I started to, uh, say, all right, this is it. This is, they cut the cord for me. I can, I can get out now. And this was, yeah, this is January or not.

So I, uh, you know, I took a job as, as a trader and then I, you know, wanted to learn, learn the stuff. So I did that. And basically on the side, I just kept creating my model, kept creating my strategy for when I was going to launch. So ultimately it went down for another two years.

Just a big, big, big, awful. So for you entrepreneurs out there listening, uh, thinking about, you know, how all the, all the guys doing it now, it's so easy. They're just like bread. It's, it's in their blood and they just do it. Yeah. Right. You know, sometimes it takes, um, it takes some, I don't know what it takes, but here I, here I had the proof that it worked.

I understood why it was working, you know, for what I ultimately was going to do. And I had the inner drive to do it, but something was keeping me back. You know, it was just, you know, fear of the unknown, lack of confidence or something. I don't know. Um, so somewhere in me that was stopping me.

So, so I sat through another couple of good market, uh, cycles for, for this trend following strategy and trend following does really well when there's persistent trends, when there's not the choppiness up and down, up and down. Um, when there's big dislocations like, like what we've recently seen in oil, that's a real good period for, for trend following.

Cause it's a big, easy trend to follow. Right. So, so ultimately sat through, you know, all the QE quantitative easing one, two, and then, you know, in QE two and the back half of 2010 was when there was another really good period, a lot of commodities, a lot of good trends.

And these guys did really well again. And I'm like, God damn it. Like I missed another great period to do well, you know, because it's not, you know, for, for, you know, it's, this is not like, uh, maybe other, other sectors of, um, uh, of startup culture where, you know, you can kind of get, if you get onto a good, uh, business model, you can kind of get persistent growth and persistent, um, steady, you know, profits and stuff like that, you know, with markets, this is, this is something different because there's good periods and there's bad periods.

There's no persistent good period ever. Um, it only comes in waves. So of course, what do I do? I sit through the next good period. I get so frustrated to say, that's it. January 11, that that's what we're starting. I started and I started right after a good period.

Now, what happened? I got the tail end of the good period and walked straight into the whole flush full cycle, bad period, which there was no trends to follow. Right. So I got a little taste of it. My first six months I was, I believe I was up, you know, six, uh, I'm sorry, like 25% or something.

And my first initial investors were like, God, this is great. Okay. This is a good continue. I said, this is not going to continue. This is the kiss of death. Um, that was back when like gold topped and everything. And there were really good trends at that, at that time.

But then everything slowed down because then I believe the fed and other central banks, they started, you know, changing their policies. And when, and when, when we live in the, um, the, you know, the economic model that we live in, where we have central bank intervention and intervention, um, we get a lot of this back and forth sometimes, you know, where they, they see things, they see trends, uh, develop that they don't like and they say, Oh, we've got to pull back.

So what do they do? They knock the trends down and everything, you know, everything kind of stays in its tight window and you know, it builds pressure in those windows until at some point things break out and then they run. And that's when I do well. But, uh, but yeah, I wore, I walked right into that tightening window where, where markets weren't doing much.

And, uh, I was like, God damn, you know, and it, it was annoying, but it was a really good lesson, um, to want to not rush into anything, uh, to, you know, to when you have the feeling, when you have the drive, you know, sometimes it's just best just to go, don't think and just go.

If you're ready, you kind of know you're ready. Let's go. Don't try to be perfect. I tried to be perfect and, uh, it got me into the, into the slop. Um, so yeah, I mean, you know, I don't think the details of like how I started the fun, I mean, is that, you think that's important?

We'll get into that in a moment, but first I want to ask this question. So you say that during that time you were at Bear Stearns and, and, uh, later JP Morgan, um, during that time you were watching many traders and portfolio managers get creamed, but you said that the, the trend, the trend followers didn't get creamed.

First, what would be your evidence or proof that they didn't? And number two, why not? What was different about trend following as a strategy, um, that made that succeed in that, in that market? Yeah. Uh, so I was, I was watching the, the, the firms themselves and you know, watching their monthly performance, uh, their, their performance numbers.

Um, and you know, uh, do you want me to give you a couple of names of like the firms? Sure. That'd be great. Yeah. Um, so the biggest and baddest one, uh, not necessarily the best, but, uh, the biggest and best one is called Witten Capital, W I N T O N.

They're a big, big firm in London. Uh, then we have a Chesapeake Capital. We have Tactical Investment Management. It's another one. EMC, uh, Capital, um, a couple other ones, Dunn, Dunn Capital, D U N N he's in a Stewart, Florida. Um, so I don't know if that's close to you.

Um, and, uh, John Henry was still around. He's no longer a firm though. Um, there's a couple other from Abraham. There's like, you know, there's, there's dozens of them, but I'm naming, I'm naming like the longest, uh, the guys with the longest track records, the guys who I looked up.

So why did they, why did they not get creamed? Because they're trend followers. They're no, they don't stick with positions that go against the trend. So naturally when, to, when, um, let's say 2008 hits, right. What, what were the trends, right? Stocks were going down, funds were going up, dollar was going up, uh, commodities going down.

Right. So, and they did so for an extended period of time, these weren't day or week long trends that, you know, stocks went down for a week and then they came back up. No, they persisted down for months, you know, down, down, down, you know, sure they had their bounces, but they went down, down, down, same, same thing for the other trends.

So what the trend followers do is that they position themselves with that longterm momentum, right? So they're not, they're not buying stocks like, Oh, these are going down at some point later, they're going to come back up. So let's get, let's buy in now and, and, and improve our dollar cost average, you know, and keep betting that, uh, that it's going to go up later, even though it's going down now.

So they would inherently put themselves, you know, if you, if you invested like that, which a lot of people do, a lot of fundamental strategies are like that. They, they bet, you know, they buy low and sell high, right? Trend followers do the opposite. They buy high, sell low and betting that that momentum is going to continue.

So in 2008, um, October, they just had short positions that they probably were getting short stocks in this case, uh, probably in late 2007 and, and they just held through the whole decline. You got to look at a chart. I can't, we go, can't pop up a chart right now, but the, but the rollover downtrend started in late 2007.

So, or early 2009 or early 2008. So it wasn't like, Oh, these guys got a huge short position put on and in October and they made a ton. No, they were just, no, we've been short for many months, dude. Like, I don't know what you guys are doing, uh, type of a thing.

And, and, um, you know, same thing with the bonds, you know, like usually when, when stocks get hit pretty good and people run to safety, they run to bonds, you know, and run to the dollar. So they were positioned with those trends. Um, and when those trends persisted, they do really well.

So right now, like 2014, uh, was a good one because the dollar went, dollar went up, currencies went down and same thing, bonds, bonds went up. So another, that was another really good year for all of us. Um, we were just positioned with those trends. We were not, we were staying in the now of, of the trend.

You know, we were respecting the trend. We're not, we don't look at what a lot of guys do is say, look, the longterm of value of stocks is X right now. It's the price is X minus 10. So that means there's good value. So that means it's a good buy.

Well, they don't understand that, that, that value could keep decreasing for a long time or in a, in a significant way before it ever comes back to where they think the value really is. You know, that's, that's the problem with fundamental, um, fundamental strategies that they're inherently putting themselves on the wrong side of the trend.

Uh, most of the time, you know, to get that good value, you know, I mean, that's, that's where that buy low, sell high comes from, you know, What are the mistakes? Um, what is, is the mistake or what are the mistakes that you would make, uh, or could make as a trend portfolio of trend following portfolio manager that would lead to your getting creamed?

Oh, first thing you could do is not follow your rules. You could, you know, let's say this rule, like the easy, easy trend following rule. Um, a lot of people uses, uh, moving average crossovers, right? You just, it's very boring. It's very stupid, you know, to the lead to the guy just watching.

But let's say you have that 50 moving average crossover the 200 you buy when it crosses up, you sell and it crosses down. So explain what a moving average crossover is, uh, and explain what that, what the market conditions would be when that's happening. Sure. All right. So moving average is, let's say, let's say we take a 50 day, right?

So we sum up, we take the average price of the past 50 days. All right. And same thing with, with the 200, right? Take, take the average price of the last 200 days. All right. The 200 day is going to, is going to react more slowly to price changes than the 50 would.

All right. Cause the 50 is taking a more recent average. All right. Um, I think that makes sense, right? It would change even, even it would be more, more sensitive if you took a 10 day, you know, that thing would wiggle around much more than a 200. What 200 is going to be very smooth.

So these, these, the object of these moving averages to smooth the price trend out, right. Is to get the general direction of the trend, not every little wiggle. Um, so when you have a market that's coming out of a bottom or it's coming out of a, of a long consolidation period, it start to, it start to drift upwards.

Um, then you get this, you get the, you get the 50 day crossing above the 200 day. Right. And a trend follower would say, okay, now the trend is up. All right. Now we have, now we have confirmation it's up. Um, so we take a long position with that and we're going to stick with that until it crosses down.

Now, what you could do, right. Uh, to, to kill yourself as a trend following trader is to one, not take that trend. All right. So you, do you don't, you don't capture if it ultimately becomes a big winner. All right. You don't cat, you don't capture it or you say, you know what, this is wrong.

I bet it's going to come down because I was on CNBC and all these guys are saying blah, blah, blah, that it's going to go down. This is not, this is not correct. And you know what? I was looking at the fundamentals too. And the fundamentals, they don't support an uptrend here.

This is, this is, it looks weird. No, I can't. No, I'm actually going to short this thing. Cause I bet we're going to continue in this choppy period and it's going to bounce off of it's, you know, a lot of guys are going to take this signal. The momentum is going to run out and it's going to come back down.

So, you know, I'm going to, I'm going to short this thing. Uh, you could kill yourself that way too, because you're again, putting yourself on the, on the wrong side of the, of the trend. And um, you know, maybe you'll be right. You know, that's trading is not an exact science.

It's not physics. Um, so you could kill yourself sure by not taking the trend, missing out on a big winner, taking, you know, disobeying what, what the, what your strategy says in this case, taking the long by taking a short, God forbid you ever did that. Um, and stick with that trend.

You stick with that loser if it keeps running up. Um, or, or you can get sloppy with your risk management, which is not a fun topic, but risk management is essentially position sizing, how big of a position you take, um, at all times. So some guys like to think they know everything and they get overconfident or overaggressive and they take too big of a position that, you know, that, that, that they can afford.

And if they're on the wrong side of the trend, um, you know, they can lose their money pretty fast. Um, so say, you know, you budget for, you know, uh, every position you take, you're going to risk 1% of your capital on it. Right. So if you lose, you know, you lose 10 in a row, you lose 10% of your money.

It takes you a long time for you to lose your money. Right. Um, cause you're betting like a fixed fractional bet. Now, well you could, some guys could do is like, you know, I'm going to get away from that. I want a bigger position because I feel like this trend is going to be the mother of all trends.

Like these gold, like these gold bugs who think gold's going to go to 10,000 one day or something. So there can, they sit there with a massive, massive position. And, and then what happens? Like it goes down, they lose a ton and then they have to ultimately have to sit there.

You're like, cause they don't want to move. They're like, well, it's going to go up someday. So I'm just going to keep buying it. So they, their risk manager gets sloppy because they're not cutting the loss fast. They're sitting with the loss or they're betting more than they can afford to lose.

And, uh, you know, God forbid you get into, you know, uh, the derivatives and the futures and stuff like that. You don't know what you're doing. You lose your money really fast. Um, so, you know, for, for the trend following guys, they're really successful at it. They, they do their work to build a system of rules, like what markets to trade, when to buy, when to sell, how much positions to hold, stuff like that.

They have all these questions answered, like a system that would pass through NASA, like with flying colors. There's no, there's no ambiguity. There's no room for discretionary, um, decision-making on the fly, stuff like that. So, you know, we do all this stuff before we ever commit a dollar. We do all this, we do all this research.

We make sure we test all these rules and we do this for wherever we, we, we ever, uh, take a position in the markets before we ever risk a dollar, because we want to make sure we're know what we're doing and we know how this thing is going to work before, before we just start getting into the markets where, you know, that's, that's a not, that's not a fun or safe place to be with money on the line if you don't know what you're doing.

Um, so then after we, you know, build a system that we're comfortable with, that we can follow, we, all our job is then is to execute the thing, execute it day after day after day, uh, through good times and bad. And, um, you know, maybe, maybe, you know, you do some research, uh, constantly to see if you can improve it, but this is not, these are not going to be improvements that you're going to be doing every day, every week, every month.

These are like slow evolutionary type of improvements over years of, uh, of work. So, um, So three follow up questions on that, which all go together. Um, number one, if this is a system of rules that you as a human being have pulled out, why do you think that you as a human being are able to see them?

Wouldn't a computer, uh, algorithm be better at finding them and then, uh, adjusting them? Number two, which is associated, what, what value do you as a human being have going forward? If you're just going to put rules in place, wouldn't the computer program be better at that? And then number three, why are you involved at all when you could just automate the trading?

Uh, okay. So starting off, we do use algorithms, you know, but the human has to find them and you know, really when you use the computer, the computer is just a tool to organize everything and make it simpler and make it faster. It's not, there's, you don't buy trend following or fundamental or any other trade trading strategy, uh, software on the shelf and, and just input it in and then just blindly and blindly follow those rules.

Like, no, you need to, you need to, you need to go in. You still, it requires a human to find what works. And then he uses an algorithm to make it easy to execute every day. You know, like if I had an algorithm for a, um, for a toothbrush robot to do my teeth while I didn't need to stand there and move my own thing while I did something else, I would do that because it would save me time.

Sure. Like why do I need to stand there like an idiot for two minutes and move my hand back and forth in space, um, driving a brush against my mouth like that? That's a waste of time and take it to trading. It's a waste of time to, to use my brain, right?

Cause I'm not always going to be sharp, right? Computers always sharp, right? Um, it's like, like today I told you before we even started recording, I'm a little foggy today. I might be off my game, right? The computer is not off its game, but the rules that I put into the computer are from me, but they're from me at the best version of, of my energy, right?

Because again, the computer's not going to wake up today and be, be annoyed at something. Um, it's going to just do it. It's going to do it. So that's a way of, of rerouting the, the energy to always be efficient. Right. Um, and I don't change the rules every day.

Like if I use just myself, right, if I was like a discretionary guy and I was just watching TV and going through reports and, and talking to people and trying to get a feel of what's going on, that still doesn't, it still doesn't tell me really with any consistently when, when I should be buying, when to sell and, and how much risk to take.

Um, you need to have a coded definite rule for each section of, of, of a trading system. So, so you know, so you could test it against like historical data, you know, so you know if it works or not, you know, you need to know if what you're doing in, in real time works, you know, like we look at, you know, we don't have a, we don't have robot athletes now, but I bet you I could create, you know, I can, I can, I can gather all the mechanics of a, if I was going to go for a pitchers, gather all the mechanics of a, of historically great pitchers and create a robot that, that use the efficient mechanics and like, you know, obviously I can't, I can't make them play because you know, they don't do that.

It's still have to do it through humans. But, but basically I create something like that where I can create a real, a real good version of, of a, of a trend following system, but just use the computer to execute it. That, that, that's all it is. It's not, it's not, it's not like the compu, it's not like I don't know what the computer's doing.

I told it what to do. So it's just doing it a much faster, cleaner way that I could do it. In the world of trend following, do you as a portfolio manager believe that your system is unique? Is it a proprietary secret unique to you? It's unique to me in that I believe only I could follow the rules day after day.

I feel like any system, any rules, like you take like dieting, you know, there's a lot of diets that work, a lot of training regimens that work. You need to find what works for you because ultimately the only way to get the results of it is that you have to do it.

And you know, whether you're going to be a trend follower, whether you're going to be a paleo CrossFit guy or a bodybuilder guy or whatever, whatever you look, whatever look and whatever, whatever results you want, you're going to have to, you know, do your work to create something that's, that's yeah, unique to you.

Trend following is unique to me because I, I, I like to be on the right side of nature. I like to, I like to obey natural law, natural principles that, that work everywhere, not in just trading. This isn't, trend following isn't specific to just trading. I like to say on a deep, deep level, trend following principles are not, it's not a training strategy.

It's a life strategy applied to trading. It could be, it could be useful anywhere. I always made, I believe I made the, on some other podcasts I've been on, the analogy to dating, you know, you know, so trend following principles are, are pretty basic, but you can obviously apply them in many different ways.

So the, the, the core principles are obviously to trade with the trend, to diversify, you know, to, to open yourself up to follow as many trends as possible. Don't, don't pigeonhole yourself to just be, oh, I'm a stock trend follower. Like why, you know, expose yourself to anything, you know, be able to capture trends in anything.

And then, you know, so we have those two and then we have ride the winners, right? So we're sticking with what works. We're cutting the losses. We don't hold what doesn't, what isn't working. All right. So if we buy something and it goes up for a little bit and then it starts to fall, starts to fall, starts to fall.

We have our exit point in there already. It says, all right, this isn't working out. So then we also have like the risk management, the you know, the position sizing, as I talked about knowing how much to bet per trade, how much open, open risk to hold in anyone position at any time.

And you have your limits for your position. You have your limits for your sector and portfolio. You can get really complicated with this stuff, but it's basically just to protect your ass, right? And don't bet more than you can afford to lose. That's, that's the day and bet enough to where that when you win, you're going to make some money.

And then like the rule of all rules, as I said many times, it's to stick to your system, to follow your rules. You have to do it. Like all the back tests, all the research in the world can tell you that it works, but if you don't do it, it's as good as dead.

And you could probably, you know, everyone could probably identify with that and that they've tried many different types of diets and are training workouts and they do it for a week or a few weeks and they're done and they don't see any, they don't see any results. Let's talk a little bit about your business.

So you built the confidence, you built your model, you tested it, you said, "Hey, I feel good about this. I think there's some opportunity here." If you trained yourself to become such a hotshot investor, why didn't you just take and trade your own money? Why would you get involved in the professional money management side of things?

I am not a hotshot trader. I was trying to bait you a little bit. No way. No way. I'm actually probably the most boring trader you ever set eyes on because most of the time just sitting around, you know, waiting for the rules to tell me to do something.

You know, I'm not looking at, I have one screen and I look at the markets few times a day. That's it. I'm not making trades in today. I'm not a hotshot at all. So this is a very boring calculated type of a thing. So why wouldn't I trade my own money?

Well, I started when I was 26, so I didn't have much money. And, you know, I don't know if I, like I hear a lot of old traders, right? They give the money back, right? They give back their client money and they just start to manage their own money over time.

And I feel that this is maybe what's maybe unique to me is that I'm not, I'm in this for like the teamwork. I mean, sure. Like you can make money any number of ways. And if I was a money hungry guy, I probably wouldn't be running a fund nowadays because it's not that good of a business, right?

It's a little harder to get clients to people for people to give you their money, right? People don't want to do that right now. They want to invest in startups. So if I was a money hungry guy, I'd be probably getting into startup culture and stuff like that, right?

Because that's the hot trend now. So, um, I like managing money for other people because when I was sitting back at bear during those big events, like when it went down and then at JP Morgan during the crisis, during the financial crisis in October, I thought, you know, this shit isn't going to happen to me.

It's not going to happen to me. It's not having my friends, not my family. We're not going to be one of these guys running around here. It loses everything in 20 years. Like no, no way. And I wanted to take my team mentality that I had all my life, you know, with my, you know, playing on sports teams.

And remember at that point I was a year and a half or something, two years of not playing baseball anymore. I, I missed it. I miss being with the guys, you know, miss being with my friends all day. And um, I wanted to create that, but in a business, you know, I wanted to create a team.

I wanted to create a loyal tribe that guys that would follow me, that would, that would believe in me. And ultimately I was making, I was calling the shots on, on the trading, but, but we had to work together to make sure that they didn't quit out when I was struggling and that they weren't getting sloppy, like putting in all their money when I was doing well, you know, before the ultimate drop at some point later.

So I, uh, you know, I really want, I started with that. I started, you know, like I wanted to protect my friends, my family and my own money first. And then, you know, later on, then we can get into maybe getting some bigger clients and stuff like that to, you know, like advance my financial status or something.

Uh, but that's like, that's later. That's not, that's not what drives you. Um, I mean, I'm sure it is for some people and some, a lot of fun managers out there, you know, they're just like copycat, uh, type of fun managers that, uh, you know, all we got to do is just like hit up our boys, uh, raise a ton of money and slap two and 20 on it.

And we can have a couple of decent years and we're, and we're done. We retire. See like for them, it's not about, it's all about the money, you know, and that, and they're not good. And it's like, no wonder they're not good. No wonder hedge funds suck today because they're all copycats.

Like they're all trying to, trying to copy the mutual funds or this or that. And, and they're, um, they're not anything. They're not in it for anything other than, you know, trying to make a little bit more, right. Stuff like that, that that's not, I'm not about that. I'm in, I'm in this for, I want to know every one of my investors.

I want to know every one of my, um, you know, uh, if I have any coworkers or anything like that, I want, I want to know everybody. And I want to, and I want to know that everyone's in this. I don't want to have a team that, that is just bringing in accounts.

I don't know anybody. And it feels like there's just names on a paper and I, you know, you know, there's no feel there. There's no, there's no like camaraderie there. And you know, that's ultimately what I loved about, about the sports game. You know, like, it's not just me celebrating by myself, you know, that's, that's miserable.

Um, so that's, you know, that's why I got into this game. Um, and I believe that trend following in general is unique, um, unique in the world today because there's not many of us doing it. You know, there's, there's some of us, right. There's some big guys, there's some small guys, but generally trend following doesn't feel comfortable.

It's, it, it's, it's painful to, to continuously cut losses, to, to, to say you're wrong, to, to bet hot, you know, to, to take positions that, that are high, you know, um, you know, that you don't see any value, right. You're just betting with the momentum, like you're, you're, you're, you're, you're betting things as they break out.

And a lot of times things don't continuously break out. They come back, you know, they mean revert, you know, so you're betting, you know, you're how, how you win in this game is that you, you constantly cut losses. Majority of the time you're losing, losing, losing, and you get occasional big winners and that's where you make most of the money is these infrequent, but large winners.

And that's not comfortable to do to wait around and, and to sit through like people want to be active. They want to day trade. They want to, they want to get it right. They want to make 10 bets and be right. Eight times like that is not how it's going to happen with trend following.

So I, because you're, you're, again, you're like, you're like a mini bubble catcher. You're trying to catch these little mini major moves. Uh, and sometimes you get big, big moves, um, that, that pay you, uh, like, but it's, it's an infrequent payout type of a type of a game.

And that's, and that's very difficult for human beings to, to do. Um, and, um, but I feel like I'm one of those unique human beings that, that like maybe most entrepreneurs, they, they love the pain. They love, they love going it, doing it themselves. They love, um, you know, if they have, if they have it be an army of one, we'll do it.

Um, and we love doing the hard stuff that gets you to, you know, the success, so to speak. So I feel like trend following is that, is that type of a strategy that, uh, it works just because most people can't do it, you know? And again, in like markets we trade, we're not trading against physics.

Like you, there's reason why there's no, there's no orbit markets because they go one way and they don't oscillate at all. Right. There's no, uh, you know, there's no rotation of the act on the axis markets. Everyone's on, everyone's on the one side. Like, wow. And I take the other side.

It doesn't spin any other way. Right. Um, but in markets you're treating it, you know, other people, you know, like some guy, I think it was cool saying, uh, in physics you're trading against, you're trading against God. And in the markets you're trading as God's creatures and God's creatures are like, you know, irrational.

They're very different. They're different. So we don't, uh, you know, when you play a game that doesn't abide by the laws of physics, you know, things go back and forth, back and forth. Um, it's, yeah, that's a tough game because you know, you'd like for everything to be smooth.

But if that was the case, there'd be no markets. Yeah. I've got, I've got some, some, some questions that touch on important themes that I want to get to before we run out of time. So, um, consider these a little bit more rapid fire questions. Uh, you don't have to give a 10 second answer, but one to two minutes.

What is your most memorable trade from the last year or so? I, I'd have to say oil. Um, last year. So yeah, oil. I mean, I've got short oil in July of 2014. Uh, I know that cause my dad, uh, asked me one time and I told him, and that was the year I got engaged.

Um, and I didn't know at the time that that'd be the start of something big, but, uh, 70, 60% later, um, it was, it's been a big winner. Um, and that same process I take every other trade, like, Oh, I don't know if this is going to work, but I got it.

I got to take it and let's see if it works. Uh, some of them work out and a lot of them don't. And this one did. And, um, yeah, it was the most memorable, memorable because everyone likes to talk about oil. Like, like, like they like to talk about gold.

Like it's like the only two commodities that anyone knows. Um, Oh, what's oil doing? Oh. And, and, and oil affects everybody cause everyone drives. So, uh, you know, as we've gotten later into the cycle now, like as oil has gotten down to the twenties or thirties or something, um, everyone started to text me, call me, Oh, we still, you know, are you in this oil?

I'm like, yeah, I've been, I've been in oil for a year and a half. Yeah. You're long oil now. No, no. Yeah. Yeah. Not, not as not in the same, um, aggressiveness, like I'd say 20% of the position that I, that I did have like still short it, but 20% of the size, not, not, not, not as, not as short, but, uh, but yeah, it's most memorable.

And it's weird because going back to the physics thing and the market, like God's thing, you know, when I see everyone starting to call me and text me and becoming aware of the, the, uh, severity of the trend, I say, Oh, this is over. This is going to end because everyone's caught on now.

Right. And when you get everyone on the one side, unlike physics, it goes the other way in the markets like that. And that's like, you know, that's, that's like the poker read stuff like that. That takes a lot of experience. I think to start to get good at that, like I would never base them a training system on like making reads like that.

That's too hard. Wouldn't base it. But I think it's important for people to recognize it. And I'll give two examples that, that one, a historical for me, one very current. Um, when I was, I met a bunch of people in real estate and one of the guys that, um, this is back in about, uh, mid, mid to late two thousands.

I forget the exact timing, but he was telling me the story of how he had made a killing in real estate and how he had gotten out of stocks in 2001, 2000 or so. And his reason for getting out of stocks was that he, um, he, uh, I had a taxi driver who the first thing they started talking about was how much money they had been made, made on their Apple stock or whatever the tech stock was.

And he came home and said, if I, if a taxi driver in New York city is giving me stock advice, I'm out and just, and sold everything. Well, unfortunately he was telling me the story, but then he went on to lose a bunch of money in real estate cause he didn't, he didn't take into account that same indicator.

If my house, if my maid or, or, or, uh, you know, the guy who works on my car is telling me about how much money they're making in real estate and the poor guy didn't pay attention. But I noticed that trend just a little bit of, Hey, everyone, everyone's getting into real estate, so therefore we've got a problem.

But I think it's more interesting to practice, not necessarily with those big ones, but with other, with other things. I'll tell you the current one current as of March, 2016, we're recording this is Snapchat. And what's been funny is I've been watching, I'm, I've never really used Snapchat. It wasn't really, it was started with such a young thing, but I've been watching, uh, I've been watching the marketing people talk about how important it's going to be for an, for a year, um, for over a year.

And now it's been a, it's been, some of them have been talking about it for longer, but I've been paying attention for a year. And now what's funny is still the early movers are just starting to catch on and my newsfeeds are flooded with little yellow ghosts everywhere. People saying, follow me on Snapchat, follow me on Snapchat.

And so I share that with the audience to say, watch it and recognize it. And, um, there's a point in time at which with all trends, you can see it a lot of times with these technology trends that you're just in your normal life. There's a point in time at which it's useful to you to get on in line with the trend.

Sometimes it's useful to you to be an early mover. Sometimes it's useful for you to follow it, but pay attention to what people are talking about and you can see these things, uh, whether it's an oil, real estate or Snapchat. Yeah. Um, and yeah, I think if you're an investor in Snapchat, it's, it's, you know, uh, granted probably the dynamics of the risk reward a little different because it's less liquid.

There's not, there's not as many participants that hold the stock and all that stuff, but you get these like hyper growth things that like, you know, you're not going to invest in oil and it's not going to be a 40 X move. Like, no, you know, it's, you don't buy oil at a hundred and it goes to, you know, 4,000.

Right. That doesn't happen unless you were like in hyperinflation or something. But, um, you can get those psychotic moves in, in these, in these, um, these budding startup companies. But, uh, but yeah, I mean a lot of times they're, they're a little frothy and, uh, and they come back to zip.

What's the biggest mistake that you've made recently and how did it happen where you lost a bunch and you just totally were surprised? What was it and how did it happen? Biggest mistake I think, um, well I never, I never disobey my rules. Right. But, um, but there are, there are things that, you know, research wise that I feel like I, I could, I could be, I could have implemented a little earlier.

So, so it's something like, um, we can, we can stick with oil. Um, so you know, if you're just, if you're following right now, I treated about 40, 40 markets, right. And about four or five of them are energy markets. So let's say you give each market the same, the same risk, right?

You're, you're saying, okay, well I'm going to treat every market the same. And whenever I get a signal, I'm going to bet the same amount across the board. I'm not going to be biased. Right. I'm not going to say, oh, I'm going to bet two on oil and one on gold and three on stock.

Like, no, it's all gotta be the same. It's like, uh, you know, it's the same bet throughout. Um, so if, when you do that though, you limit yourself, right. To per se, you, you create where the number of markets you trade is where you're going to have the risk.

Right. So if you have five Mark five energy markets inherently, when you get signals, you're only going to have 5% of your, your, your risk in, in those markets. Right now, what happens if they become the best performers, right? You may want a little more, right? Sure. And, and what happens if they become highly correlated?

Uh, you know, if they're still trending, that's a good thing because you got one big position crushing it. But ultimately at some point, you know, they may all start to go against you, you know, later on. So you gotta be, you know, you careful. So I started just training very, very, you know, primitive where it was just, like I said before, trading basing one, um, one, uh, flat percentage bet for each market, not incorporating this correlation stuff, um, or, uh, aggressiveness of the trend stuff to where like you're like rel using relative strength and things like that.

So, so over the past year and a half where I've done well, you know, being short oil and other energy markets, I would have loved to have been more short, right? Because that would have meant like there was some of the other 35 markets that weren't doing much of anything, but I was still giving them their equal chance to do well now, not cause I don't want to reject any trades either.

Cause you don't know what's going to be the next big, you know, you don't want to be in a point where you reject any trades. So while I held this position and energies like, damn, like I'm taking this, this is like the, you know, I'm hold, I'm sure I'm doing okay, but I've been taking this stupid position, cotton and cocoa and all these other markets that are not doing anything.

I keep getting whipped out. Like I should really should have just been allocating more, um, of, of my capital to the, to the ones that are already winning and winning big. So that, that was a big, like frustrating point of mine. Um, point that I, I, I knew and now I know of, of ways that I could have had more, um, without sacrificing the diversification end without saying, all right, well, all right, we gotta, we gotta take all the, take all the allocation from these other markets and give it to oil.

Like, no, I don't want to do that, but I know I can, I can at times, um, get a bigger position in the ones that are winning, um, then, uh, then the other ones that are kind of whipping me out back and forth, back and forth. So, um, yeah, that, that was annoying, but I know it's just, it's all a learning process, right?

You know, it's like, okay, well next time I'm going to, I incorporate this stuff, um, into my, into my system now. And you know, you get, you get more, you just, you get better at, um, allocating your funds to the trends better, right? Like in the past I was open to all the trends, but now I'm going to be more, um, you know, still open to everything.

But when things really start to prove themselves, um, I'm going to be in a position to, to take more of a position to take advantage. That's all. Pretend, um, pretend that I'm a boglehead and I'm just long head. Yeah. I always bogglehead. I'm a longterm. I just held index funds.

I don't do any trading. I'm a buy and hold index funder. Uh, and you're trying to, uh, you're trying to say, Hey, listen, you ought to consider, uh, taking some of the money out of the index funds and investing it with me. What are some of the key points that you would touch on that would, that I would consider in making that decision?

Sure. Well, you know, with passive investing on any one market and if you're doing it on stocks, okay. Um, just realize that every so often you're going to lose a lot, you know, it's going to go down. Um, and it may take you years for you to get back to your old, your old, uh, account value.

Um, it's, you know, we just lived through 2000, 2015 where essentially, essentially went nowhere after all the taxes and the fees. Um, so, you know, if you can stomach living with an investment strategy like that, that you're susceptible to maybe 10 years of no gains, uh, I would say, I said, okay, go for it.

Um, especially if you're younger, you know, fine. But, but at some point, you know, you don't want to be in a position where you're going to get older or where, or when you need them ability and that's going to wipe out half or 30% or more of my money.

Um, and I'm going to be damn now I wanted to buy that house. Now I can't buy it because now I got 30 or 50% less in my accounts. You know, that's not a good business plan, you know? So with trend following, because it's a, because it's different and because it's, it's, um, a non correlated return stream, right?

It makes money differently than a buy and hold would. Um, when you combine them to whatever degree, you know, like if you say, all right, I'll keep, I'll keep, uh, say you went half and half, right? Um, you, you're getting two different types of players. It's like, like building a lineup.

Like you don't have a lineup of power hitters only or lineup of slap hitters only you want, you want some power here is you want some average here is you want some slap hitters and you want some contact guys, you know, like you want all different things. So you create a smoother, uh, return stream for yourself.

So you have, you have more stability. You're not, you're not more, you're not susceptible to, or you're not as susceptible to a, to a sudden major loss or a, or an extended period of no gains. Like you, like people just had and stocks. Um, so when you incorporate this stuff, you're, you're opening yourself up to one profiting from trends in different markets.

You know, if you're just trading stocks, it's one market, one, um, and one country. Um, but when you open yourself up to maybe a trader like myself or another trend follower, a diversified guy, um, you're, we're trading dozens of markets in all different sectors and all different countries, all different continents.

So one, you're more open to, to catching trends if, and when trends go cold in your stock portfolio, right? Like, Oh, well, you know, that that's fine. That things are cold here because things are hot over here and now we just moved our money. So now we're, now we're, now we're doing well over here.

And also trend following has the inherent, inherent, um, uh, mechanism to cut losses. If you're a buy and holder, you're sitting with your losses. Like you, you never get out. Now there's easy times to when things start to roll over, right? Um, to where you use like, like the moving average, we talked about before, like when you get out and you protect your ass, you because maybe it will, maybe it's a false signal.

Maybe it does, you know, give you a short signal and it comes right back up. Like in damn, like you missed out on the bottom or something. But in those, like I said before about the infrequency of those major trends, most of the time you may be right, holding it might be the right thing, but sometimes it won't be.

And you can't afford to lose half or more of your money. Um, for any reason, like that's just not a good business plan. You shouldn't be, you shouldn't open yourself up to that. Like that, that to me seems silly and unnecessary. Like you don't need to do that. You don't need to play that way.

Um, so you know, if people can't get past there, Oh no, I just always hold stocks no matter what. Um, and which I may add that all stock indexes are trend following systems. Um, they're not very good ones, but they, they are in that they they're diversified, uh, throughout the stock sector.

They, they allocate, um, more of the weight to the, to the winners, uh, and they allocate less to the, to the losers. Um, so they are inherently a little bit of a trend following system. So, um, anyway, um, you know, so when you combine these two ideologies, these two philosophies, these, you, you get, you get different return streams and when you combine them, you get a more, you get more of a smoother, smoother, um, you know, performing type of a thing.

You get more, as you say, you improve the risk reward, right? So one way to, one good way to measure risk, uh, I would say reward in relation to risk is what I like to use is the, uh, the MAR ratio, which is the compound annual returns divided by the max loss, right?

A lot of guys like to use the sharp, which is the compound returns divided by the standard deviation, the annualized standard deviation. But you know, standard deviation could be positive, right? You can have deviation on the upside and that doesn't, that doesn't make much sense to me. Um, so other guys may use like the Sortino, which is just the downside deviation, but I like to use the max loss because that, that is where, that's where the edges are.

That's where people lose their discipline was when they start losing money. And if they, you know, if they lose too much, um, that's when they start to quit. So, so like typically, um, you know, just to like compare like risk reward ratios, um, like buying hold typically has 0.1 to 0.3 is there is there a ratio like a stock like the SMP has about seven, seven and change compounding returns over many, many decades with 50 plus percent losses.

If you go back to 29, you know, it's like 80, 90% loss. So their, their risk reward isn't that good over, over long periods of time during pockets of time, like in the past five years, it's been insane. It's been great, right? You have a 200% run up with a 10% loss, like max loss.

That's, that's awesome. Right? That's very good. But over long periods of time, um, that's where that ratio sits that 0.1 to 0.3 now, but diversified trend following, um, systems, uh, they usually have MARs of usually 0.3 to 0.7 and they, they achieve higher, um, higher risk reward, um, ratios because they're not sitting with these big, big losses at times, right?

They're cutting losses. So it takes, it takes more, it takes more of a, um, of a consolidation type of a period where a lot, you get a lot of strings of losses in a row to really, uh, to really kill a trend follower. But the, the, the thing is, because, because of how markets work, things consolidate for periods of time and then they run, things run for periods of time and then they go back to consolidate, you know, so all you got to do is get through the windows of time where things aren't that good, uh, without, without much loss.

Um, and you do that by cutting them and not betting aggressively, uh, or, or, or over aggressively, um, to where you get to that next set of trends. Um, now it's, it's a different philosophy and it's, it's a different, it may seem more common sense to, to some people like, oh yeah, why would I want to buy and hold stocks ever any, anymore?

Um, I don't know. I don't, I don't do that. All my money is in my phone. So, um, two, two final questions here and these are kind of going to be, these are going to lay you up nicely to mention your, your websites and your fund. Uh, but they're sincere questions, um, but they are going to lay you up nicely.

Uh, why can't I just do this myself or can I just do this myself? If I want to learn trend following to trade my own portfolio, can I just do it myself? Yeah, absolutely. You can. I mean, and, and you know, if you're committed to it and you know, going back to the dieting and training, you need, you need to have the discipline to do it.

If you're that guy, great. If you're looking for a cheap way out, you're probably not that guy, you know, because you're probably not going to do it. You know, like what, what's, what's, what sucks about a personal trainer is that he can't do it for you. You know, a, a personal trader with a D can do it for you because I don't need to be in your body to do, to do the things like, you know, so if discipline, uh, is a big issue for you and for most of the humans it is, and for most of the human, like discipline is for me an issue on things I don't really like, you know, like I'm not going to do this, I don't like it, you know, I'm going to give up on it, you know, but things that really into I'm doing it, I'm in it, I'm committed.

Um, so, you know, for most investors, they're, they're not usually the committed ones. They're, they're, they, they just do it because, um, they were sold on that's where they should have their money. So if that's, if, if you're a passive investor, um, which is, which is cool. Um, passive at a lot of things, um, investing, not being one of them, but if you are, then, then, then, then you may consider, you know, outsourcing your, your investing to a disciplined human being, a guy who's into it, a guy who's on top, a guy who has his money invested in his own strategy, right?

A guy who has personal interest in doing well. Um, and you know, that, that's the service I provide for people, you know, not everyone, not all my investors want to do this. You know, a lot of them could, I could teach this stuff to my mother or to my 10 year old cousin.

It's not hard to do. It's not hard to, to grasp the principles and to actually create a system, I don't think. But, but in the hard part is doing it day after day after day after day. It's like, and you got to do it forever. I'm sorry, you can't take any days off.

You know, that, that, that's where you start to lose the cell. You know, it's like, oh, I don't do that. >>So in that line, and, and, uh, uh, I'm running up against another interview scheduled after your, I'd, I'd probe you as far as how you learned it, but let me close with this question.

If you, I've, I've avoided and talking about things like rates of return in order to, to keep you free of disclosure requirements, uh, things like that with, with the financial regulatory agencies. >>Yeah. >>So that's, if any audience is listening, that's why I haven't asked those questions of like, how much did you make last year, et cetera.

Those types of claims need all kinds of regulatory documents associated with them. I just want to ask you this question. If I wanted to bring money to you and say, Hey, listen, Michael, will you please manage it for me? How do you want to be judged by me as a client?

Do you want to be in by, in my examples are, do you want to be judged simply based upon my total return? Did you beat the S and P last, last year that I could do better within what then what Vanguard did for me? Do you want to be judged based upon limited downside?

Do you want to be judged based upon less volatility? How do you as a portfolio manager, what do you think is a fair criteria and method to be judged by your clients? >>Uh, I say when people come to invest with me, I say, I don't, I don't require, but I recommend you stay invested for at least three to five years.

Um, so you can get enough, you can get enough time, get enough, uh, get enough trends under our belt to, to compare ourselves to maybe the other options out there. Um, and probably, you know, I'd say compare me or judge me on my one absolute returns over the time period.

Let's say it's, you know, three years, five years or something, um, versus other, other asset classes. And then, and then base me and then compare me and judge me on the, um, like I said before, that, that MAR ratio, um, how have my returns been relative to my losses?

Um, because a lot of guys can, you know, maybe have a real, real high MAR ratio, but their absolute returns aren't high. It's like, well, you know, I want, I don't want an MAR of one, but returns of 2%, you know, that's, I don't want, I want like bigger returns.

So then it's like, okay, we need to need to factor both in. I don't know how you want to weight them or whatever, but, um, you know, and I would say also it's in pockets of time, you know, comparing yourself versus versus other guys, it can get dangerous because there's always something that's going to be doing better.

You know, most of the time, a trend following is usually never going to be the number one, uh, asset class because it's usually, it's usually an average or, or a little bit of a, um, of a non pure, uh, all in bet. You know, it's the best all in bet over the past year.

It's probably like Netflix or something that went up like 200%, but you don't, you don't like, you don't want to start a Netflix fund, you know, because it, that, that's going to end that ride's going to end. So comparing yourself to, to like a stock or something, it's like, well, Mikey, why do I need you?

I could just invest it all in Netflix. Like, well, yeah, dude. I mean, but that's, that's one opportunity. That's one trend in a short amount of time. Like, do you have any evidence, any research, anything that, that, that suggests that that's going to continue? Um, and that's a viable investment strategy is like, I'm just a buy and holder all in bet on Netflix.

Like if yes, okay, go, go have a ball bro. But like if you want a, a stable, a more, a well researched thing, a system that is not susceptible to major sudden losses, then, then you may consider something else. I mean, with, with a little bit more diversification and, and, and more rules and stuff like that.

But, but yeah, I mean, I, I value myself. Um, I, I judge myself on, on those two things. Like I want to achieve at least, at least double digit returns and I want to achieve an MAR of at least a half and that, that, those are my goals. And, and if I do those things for you, then I, then you can tell me, you know, job well done, but now go do it again and again and again for the years coming up.

Uh, but that, that, those are, those are my goals with, with my returns. Um, I don't want single digit returns. Like, uh, I'm young and most of my investors a little more aggressive. So we, we shoot for bigger, bigger numbers. Um, you know, we were willing to take some of the volatility, but we're, we're also willing not to take that much.

We want to be efficient with it. So efficient with our, with our strategy. So, um, that, yeah, I mean, again, double digit returns is what I, what I want. Um, you know, 12, 15, 20 at times. Um, and then, and then keeping the downside volatility to about, uh, you know, um, to like double those numbers, you know, so if I, so if I achieve, I achieve like 10% returns, I only want to be taking max losses of 20%.

You know, I achieved 15. I want to be capping them at 30, you know, stuff like that. Um, that, that, that's what I want. I don't want the stock buy and hold thing of 7% returns with 50% drops that, no, that's not, that's not efficient to me. There's a better way to do it, at least in my opinion.

And that's why, that's why I do it this way. Awesome, dude. You got two websites. You have a, a personal website. We'd talk a little bit about finance, a little bit about you at Michael melissinos.com. I'll link it. So it's spelled properly in the show notes, but it's M E L I S S I N O S.com.

And then you have your firm's website at melissinostrading.com if anyone's interested in, in, in checking into some of that. Anything else that you'd like to share with the audience here as we close? Uh, no, I just say, just be honest about, about your investing. Like in order to do really well, the reason why the best investors, the best traders are the best is that because they've fully committed to their style and they know their style and they follow their style every day.

They don't, they're not wishy washy. They're not going back and forth on their discipline. They're, they stick to it even when it's not fun. And disclaimer, most of the time it's not fun. Welcome to the world of investing. It's not, it's not supposed to be fun. It's just supposed to work.

So, um, you know, that, that's what I'd say. Just be, just be honest with yourself. If you can't do it yourself, no big deal. It's not, you're not less of a man, less of a woman because of it. It's, it's perfectly normal, perfectly probably the smart thing to outsource things that you don't want to do and that you can't do as well.

No big deal. Sweet. Dude, thanks for coming on the show. Thank you so much. Investing is something that really almost anybody can learn. If you're listening to a show like this and if you understand that you have an interest in it, well, I promise you, you can learn it.

Uh, Michael can learn it. You can learn it. I can learn it. I do want to point out and just demonstrate to you, notice how the investment business works. Notice how a guy like Michael, uh, if you remember the question that I asked him, he builds a skill and then he goes and applies that skill to help other people.

And that's how the investment business works. It provides in a tremendous way for investment advisors to build wealth while bringing a service to the marketplace. That's what all of us do. We go and we learn a skill and then we take that skill and we work to bring it to the marketplace to build our own wealth.

And in the case of investment management, it's very clear you get to use other people's money, profit from it in the form of fees while hopefully, hopefully growing it. And that could provide the foundation for your own fortune. Consider if there's something in your industry, in your business, but it might be investing, but consider if there's some way that you can apply that concept in your own business.

Hope that's useful to you. Thank you for listening to today's episode of the show. If you'd like to support the show directly, please consider becoming a patron of the show. Go to RadicalPersonalFinance.com/patron. RadicalPersonalFinance.com/patron. If this is your first time listening to Radical Personal Finance, welcome. Please consider subscribing to the show.

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