My Hockey Stick

Well, I didn't trade last Thursday. I was getting upset over the whole variable costs thing again and I've been pretty good about blocking it out of my head this month up until then. I felt it was best that I not go into the office and try to be a hero and blow up. Friday... honestly, I was ready to turn in my resignation letter right then and there. I had a chat with Jane about whether people build up momentum to get to the super yahtzee point or they get it after they yahtzee. She said that each case is a little different but it's usually the later. I straight up told her that I don't think I will get to that point before my pain threshold is met and end up leaving. She asked me if I'd like to talk to Gardner, our MD, and I said yeah so she printed out my chart and stats for him.

What I wanted to hear was: "Yes, some of these fees are ridiculous and we're going to get rid of it," or "We believe in you and trust in your decision making. Go and trade with more shares. A lot more shares." What I got was almost both. I knew there were discussion going on with the fees and what we have implemented now is that you won't be charge of the $1,100 infrastructure fees the first three months and half for the next months. And if I was having 60% winning percentage, Gardner himself sees no reason why I shouldn't increase my size.

There were time in the early part of the conversation where I notice Gardner's hands were shaking a little bit. From my experience with speaking and poker... it either means that he was nervous or excited and that was a way to release the energy. I'm not quite sure what to make of it at the moment yet.

A lot was said, it was hard to digest everything at the moment. But management seems content with the payout structure we have. Put it this way, hedge funds get 2 & 20, meaning 2% of the total asset and then 20% of the profit. If you're trading at a prop desk at say Goldman and you're not pulling in millions of dollar you'd be getting about 10%. By my judgement, management feels it's a great deal and we're lucky to have the 35% split and move up to 50%. On top of that we don't have to risk our own capital. With the new plan, the numbers should come out about the same. I'm at no disadvantage now than if I was on the older plan with less fees. It's just the number might seem bigger and it does mess your mind a bit. It's good to see from Gardner his conviction in the company. He believe in our technology and our support, and if anybody wants to go to Ascent or other firms just so they can get some money right away he's not going to stand in their way.

What I remeber most vividly was Gardner telling me that I should be excited right now. If I'm making money in this terrible market that we know, when we get some good moves and volume going I'd be ready to multiple that many times. He said that I'm about to turn my chart into a hockey stick (referrs to the way our growth chart looks like after leveling and then grows hyperbolically). I just got to believe and not let fear be part of my trading. I don't remember what exactly Gardner said at one point but I told him that it was funny b/c it reminded me of something I read somewhere or from a podcast that When you're about to quit, you're a lot closer than you think. I suppose that's pretty true. I'm probably closer to making it than I realize. As Roger Seip said back when we were selling books with Southwestern, it doesn't make you a bad person if you think about quitting. Everybody does it. You just have to realize that they're just thought.

I did go out and trade a lot more shares on the 2nd half of Friday and on Monday. My total shares were about 3 times as much and certain imbalance trades that I probably took 4 or 5 times what I usually do. Result was somewhat mixed. I did lose a little bit on Friday but part of that was due to a little bit of overtrading and overcovering one of my trades. If I divided my numbers by 3 or 4 it's about the small drawn down that I usually have. Monday I probably just scratched the day, again, getting in about 3 or 4 times the shares. I feel pretty good. I think at one point I did feel my hands shaking when I was in a lot of EEM. So, we'll see what happens this month. Volume was pretty good today, at least about average I think. I hate looking up and see the relative volume for SPY or EEM only at like .75 sometimes