In this series of Q&A posts, I’ll post some of the comments and questions under my ads or articles, as well as the answers to them.
This one is from the end of December 2021.
Still underperformed the market this year. The market made over 100% in the last year and half, while you are up 130% in the last 3 years. Nothing to brag about.
1. My profit for 3.15 years is not 130% but 158% https://reallyeasytrade.com/trading-statistics-for-3-years/
2. My trading is market neutral, meaning a steady flow of profits from year to year. Whereas the S&P500 may not make any money for 10+ years and has a very low historical profit of 7% annually above inflation with monstrous drawdowns of 50%+.
3. You can’t compare returns for different time periods, the profit for 3.15 years should be compared with the profit for the same 3.15 years. 158% vs 77% SPY.
4. You can’t just compare absolute returns relative to each other; you need to compare profit (CAGR) / risk (MaxDD):