Menu

 

In our graphs published on StockTwits we show the performance of the HST model from 01-01-2016 to now = 3.7 years

It is interesting to notice that the average annual yield has been 37.8% for variant 2 (shifting among $TQQQ/$UPRO/Cash) and the max drawdown was suffered on Dec 2018 (-37.21% since previous top).

You see the ratio maxdd / avg yield is approx 1.0 which means that the model can suffer a drawdown very similar to the average annual yield...

..which also means that - on average - the HST model could recover a bad drawdown in approx ONE year

 

 This is also the same ratio recorded from 1971 to now:

  • max dd has been -54.6% (happened in 1998) and
  • average annual yield has been 52.3%

So the ratio is again approx ~ 1.0 (this second picture is using log scale, so the drawdowns seem reduced than reality)

 

If one investor wants to reduce the MAGNITUDE of the max drawdown, should apply a less risky variant (i.e variant 5, using $SPY and $QQQ or others non-leveraged ETFs)

 

Who is Hari Seldon

(from Wikipedia)

Hari Seldon is a fictional character in Isaac Asimov's Foundation series.

In his capacity as mathematics professor on the planet Trantor, Seldon develops psychohistory, an algorithmic science that allows him to predict the future in probabilistic terms. On the basis of his psychohistory he is able to predict the eventual fall of the Galactic Empire and to develop a means to shorten the millennia of chaos to follow. The significance of his discoveries lies behind his nickname "Raven" Seldon.

Our team decided to dedicate this work and this model to this amazing character, creating the even-more-fictional character of "Hari Seldon Trader".