Results are Posted...

I received a request to provide monthly performance and with some trepidation I am fulfilling that request. There are a few reasons I feel a little apprehensive about this, but here are the top ones on my list:

• It's embarrassing... Yes, once again my ego is on the line. Posting a 16% loss in one month is never good for one's self-confidence. So why do I do it? Posting a loss like this forces me to really examine my weak points and learn from them. That is invaluable. Further, it is humbling. Something we all need after a nicely profitable month.
• It's ostentatious... The flip side of a 16% loss is an annual return (including the -16%) of more than 28%. And this in one of the worst markets in history. So why do I do it? Trust me when I say have no desire to brag. I have taken many lumps in the learning process. Posting gains, however, is what this game is all about. We can't improve what we don't measure, and this posting forces me to keep careful records.
• It's not really accurate... At least it's not an accurate representation of my account growth. These numbers are NOT Return on Equity, rather they are Return on Invested Capital (ROIC), or as I often call it, Return on Risk. Each month I trade only a small portion of my total account. So why do I do it? Over time I hope to improve my risk/reward ratios through a number of measures (perhaps fodder for another post). As I improve that I can increase the capital at risk and achieve closer to these numbers, although I'm not sure I will ever get all the way there without unpalatable risk.

All of this said, you can now find performance results posted in the lower right corner of the page. I'll try and keep these up to date as the months elapse, but if I forget feel free to drop me a note.

Good Trading...