Sounded to me like you were on the right track. Passive businesses could have acted as somewhat of a hedge. They make money while you sleep and you continue to make money to succeed in the trading arena?
Yes, it's good to have something hedging against the trading. I walked out on those two deals as they both had two separate books - one for IRS and one for themselves. On their tax returns, they made nothing while they claimed that they made over $100K each per year without any paper to support.
As of yesterday (3/30/2023): This month was tough as I had some exposures on financial sector that I thought I traded conservatively.
there’s nothing passive about those businesses. Who opens the store when the derelict highschool employee doesn’t show? who deals with the police when a robber comes in and steals your money? Or when your supplier increases your prices by 20percent?
As of last Friday (4/14/2023): Trading is not easy - had some losses when SIVB/FRC went under. As a result, I'm still sitting at 30% YTD return...
On Jan 2020, I pulled out 90% of the capital out to buy a house without knowing how severe covid would be. With 10% of the capital, I did have a large loss since they weren't hedged at that time. On Mar 2020, I started adding back the capital after I completed buying a house. During covid, I didn't know where the market was heading so I kept buying oil stocks when oil price was under $20 per barrel with leverage since IB was charging 0.5% in interest expense. Since last year, IB charges 6% in interest so I unwound leveraged positions. Early this year, I became an executive/major shareholder for OTC company so I now spend much less time on trading stocks/options as this penny stock needs a lot of attention and capital to turn it around. I plan to invest on this company to make something worthwhile.
@universaller, ty for the updates and good luck with your new ventures. It sounds like your oil trade has paid off handsomely. And it's good to pivot to something new - trading will always be there - esp. if we get another commodity super-cycle to put on another levered oil stock bet to put on big bets again haha. Just to share this is my YTD performance (I also have significant oil position but are not performing as well as you did in either YTD or last three years). So very inspired by your updates since you posted your first post, keep sharing and look forward to seeing your next update. 2023 ytd (green is account): 3 year trailing performance (blue is account):