RedManPlus, your gains are so.. consistent!? I'm in awe. Any advise you could give someone new as far as optimizing hedging goes or optimizing a trading strategy? Books you'd recommend, articles, etc.
Maybe Trader A started badly and made a huge recovery to the mathematical point that he/she started with $100 lost 50% the first day and turned that $50 into $135 for a 170% gain. That is much better than the other 25% gain The point is the person with more money is better no matter how they did it, the decision is made depending on risk calculations...
Found one: http://www.ditomassogroup.com/DTGDD.htm Di Tomasso Group's Equilibrium Investment Program has twice had worse than 60% down years and had a worst drawdown of 85%. Incredibly, he's come back to reach a new equity peak. Di Tomasso is profiled in the March issue of Futures Magazine. Di Tomasso makes fundamental calls on commodity values and doesn't trade financial futures. According to the article he is short crude and long the grains. Aaron Schindler Schindler Trading
I think David Beach's 3x Discretionary fund on IASG recorded a drawdown more than 50% last year. Investors abandoned the sinking ship and then lo and behold, he finished the year positive. http://www.iasg.com/SnapshotPT.asp?ID=54
The total yearly returns are abysmal for that amount of risk (maximum drawdown was almost 72%!!!) Only way to invest in that fund is to wait for 3 or 4 consecutive losing months, or a 40%-50% drawdown and then jump in.
What if that 50% dd turns into a 80 or 90% dd? You assume that just b/c he had a nice recovery he can do it again. I can lose my own money. Must be one hell of a psychological rollercoaster though.
It only seems that way because of .... survivorship bias ie - those that go on to lose all your money get erased from databases. Incidentally, David Beach is a fine and very successful manager.
Not assuming anything...just saying that THE ONLY WAY I would ever invest in that fund is after a massive drawdown.