Merry Christmas + Mega Update

(Disclaimer: super long post where I explain my new focus and purpose of the blog)

A few weeks ago I came to the conclusion that I should write a final blog post saying my goodbyes to the blog, keep it up for a week, and then take my blog down.  I’ve hardly written anything over the past few months, and the blog has felt like a partially-finished book that I stopped reading, but has been left in sight just in case.  I felt so relieved when I decided to shut it down.  Finally no more quasi-guilt of having this unfinished blob of a website in the world.  I would have something to write about on top of that (closing the blog down)!

I began thinking about the specifics of this finale blog post, and why I even started blogging in the first place.  When I started it was to practice my writing in public, and to get used to putting things into the world unlike the short stories and discarded novels I had on my computer.  A few people I knew and even didn’t know started reading the blog, which was quite uncomfortable.  I never promoted my blog because I didn’t want to expose my inner-thoughts to any mass of people, but somehow it grew (still microscopic, but something) a bit, and I morphed the blog a bit.  I tried to write things that were interesting or educational, and this was tough.  Coming up with something that isn’t cliche and actually useful on a regular basis is hard!  

My main thing was to try and reveal some embarrassing and real things from my real life, which is all that everyone is interested in anyways, and try and tie together some wisdom with it.  It seemed to work ok enough, but a few years ago I wanted to get a job in tech.  A guy who helped me with my resume and job tactics said although he really liked my blog, he thought that it was something that could hurt me in a job search.  Me talking about grappling with my work and indecisiveness, my failures, trying psychedelic drugs, etc. didn’t mesh with the perfect image of a robot whose sole mission and purpose since birth was to work at Google.  

I deleted the previous version of my blog, discarded my regular blogging habit, and laid dormant for a while.  I eventually restarted this as my blog (and stopped trying to get a job), but I never did reestablish my consistency, or my purpose.  How many of us are missing a purpose these days?  I know I’ve been drifting over the past several years. I haven’t by any means been laying on the couch popping Cheetos, and have worked quite hard on trading research and applying it, but it’s still been this hazy “keep working on this and life will be good” type of direction.

I’ve noticed the trend that the blogs that I read, the podcasts that I listen to, and the majority of information I find online now is no longer about expressing inner thoughts or helping other people.  It’s pretty much all geared towards selling me something.  Brain supplements, the exercise program that I truly need, educational courses, or the secrets to becoming a true Alpha Male.  These things existed before, but I felt like I had to search them out, whereas now I can’t even read an article about meditation without being pitched on $1,000 worth of crap I don’t want.  No one that I know or even strangers that I find interesting from afar write a personal blog anymore.  How interesting would it be to get the personal weekly ups and downs from Elon Musk, Jeff Bezos, or especially my friends?  I’d love to even read stuff from various business/entertainment titans that I’m not a fan of.  Unfortunately if something like that does exist in any form, it’s likely to be scrubbed of any humanity, and debased into something like a “shareholder letter”.

When I was excited about shutting my blog down, I did remorsefully think that I myself would still love to be a consumer of this type of content.  I would absolutely love for my friends and other interesting people to publish something as simple as a genuine regular update.  In a world where you’re pressured to turn every hobby into a multi-million dollar business before you even start, doing something without any secret business objective feels like a weird thing to do. 

So why do I want to start writing on a more regular basis again?  I’ve felt guilty for a while that I haven’t been writing before, because I do get the occasional positive feedback that the blog has been helpful and interesting to various people.  It’s strange because I definitely don’t have my life figured out, and I’m not a guru ready to guide the masses.  I know people look up to me though, and find various aspects of my life admirable.  I know this because I’ve been told this a fair amount, even if it doesn’t feel warranted to me.  I’ve spent my life daydreaming, reading and admiring some of the great people in history, as well as various people I’ve met throughout life, and in comparison I feel like nothing special.  As I get older though I know many of the people I’m fascinated by felt the same way.  Some of these people shared their own story, or someone shared it for them, and it has greatly benefited me in so many ways.  I feel an obligation, and it’s something that makes me feel good to share and help if I can too.

This past year several family members of mine have passed away.  My Grandfather, Stepfather, and long-term girlfriends’ Mom.  I began to consider the shortness of my own life more realistically than I ever have.  I can see that many of the dreams and ideas I have may never be fully realized. There’s only time for 1-2 things to focus on, and it’s cliche but true that you aren’t guaranteed another day. I’ve often thought of going back to the high school I attended and doing a cheesy “I made it and so can you” guest lecture to a random 20 person Economics class.  Again not because I feel like I’ve crushed life, but because where I grew up I’d never met a tangible person who had travelled the world, made money, and done the things I fantasized about. My main takeaway though would be a syllabus of resources for them that have been crucial to me for the potential 1-2 kids who actually care.  Why not make that syllabus and update it on this blog though and share it to everyone (spoiler: I need more time to get that done) and keep a journal of my life and experiences?  I think sharing on a regular basis instead of a polished story that is made up from random memories years later is more educational and interesting.   

Another huge component of wanting to blog again was once again having purpose.  I mentioned this before, but I have been drifting a bit for a while.  I’ve known the direction has been generally good though, and it has been a good drift.  I’ve been traveling and spending time in amazing places with my friends and girlfriend around the world, and learned a lot, particularly about trading the past few years.  Two weeks ago exactly though I got fired up with energy and motivation that I haven’t had in a long time.  I was reflecting on different good periods of my life, and I realized I had a strong and clear purpose.  In college it was to get A’s while living a balanced life.  In my early years of options trading it was a quest to make millions and experience various fantasies/weird experiences.  Whether these things happened when or how I wanted them to was irrelevant, but I had clear daily things that I pushed towards without second guessing myself.

Two weeks ago I realized that two major areas of my life that have been bothering me for years, could not only be solved, but I realistically have the skills to have them figured out in a year.  It sounds ridiculous as I write that now, but there’s such a large gap between “knowing what to do” and actually having the drive to do it.  I try new hobbies/things yearly, research the path of how to get good at it, and eventually hit the point where I know what to do to improve but I’m not willing to do it.  I’m fine with that.  I imagine I’ll learn and study more Spanish again at some point for instance, but right now I have so few uses for it that it’s not a priority.  My health and finances though?  Why have I been living in limbo of not willing to put in the (sometimes painful but worth it) effort of being in the physical shape I want to be in, and why are my finances in a state such that I’m not setup for even a modest life without having to worry about making more money?  

I’ve written about going on diets and being more motivated to get in good shape for years, and it’s been hard to figure out why I haven’t followed what I know to work for me.  You know when you read fitness books and people talk about how before they started Paleo/Carnivore/whatever they were having skin problems, joint pain, they were overweight, digestion/stomach problems, and tired in the morning?  I never understood any of the various issues outside of wanting to lose fat, but that Sunday I realized now that I’m a little older I have all of those problems!  I just kind of got used to little red patches of skin flaring up on my face, my knees/elbows hurting, and everything else in life.  I also had a cringe-inducing habit of drinking multiple coffees and energy drinks a day to get anything done.  I needed one to wake up and get rid of my initial headache, something to workout, something to wake up after eating, something to keep me going in the afternoon, etc.  Full blown drug addiction to caffeine.  I finally figured out how to make a change that works for me, and it was the old-school method.  Instead of making all kinds of exceptions and weaning off certain things like I tried in the past, I just went full Carnivore two weeks ago.  One day I’m drinking 5 heavily caffeinated drinks a day, eating carbs, etc., to the next day only grass fed beef, salt, water.  I could only stay awake until 8 pm before I crashed the first night, and I had headaches for two days, but my body quickly got over it.  The red patch behind my ear that flared up daily?  Disappeared in 3 days after a year(s?) of being there.

It’s been two weeks, and I have reintroduced coffee/espresso into my life as I love it and I’m pretty sure the excessive use was the culprit, but not every day, and not more than one a day.  My mom got me gummy bears for Christmas and I did break as well as had ice cream from my favorite childhood ice cream shop in Michigan once over the holidays, but otherwise I’ve been strong.  I loaded up on healthy proteins and fats, and ate strict at my Mom’s house for a week over Christmas after 100% strict carnivore adherence in Puerto Rico.  Two weeks isn’t two years, but it felt like it at first, and it’s been working almost as fast as eating bad hurts me.  The trick was to stop having cheat meals and little cheats, at least for me.  I did have that ice cream and gummy bears for Christmas, but it was that painful nostalgic reminder instead of the start of a mini-bender.  I didn’t want to admit that I did have those cheats on Christmas, but I wouldn’t be honest otherwise, and I still have this fire to keep at it.  I’ve lost 5 lbs, my stomach is more flat, my skin is getting better, I have more energy throughout the day, and I don’t need as much sleep to feel refreshed.  It requires a bit more effort for me to remember that I need to pass on dark chocolates, pre-workout drinks, etc. that used to be automatic for me, as well as be better with meal preparation, but the pain of losing this new path to laziness would be much worse.  I want to be in the best physical shape of my life by the end of the coming year, and assuming no physical/health calamities, if I follow this diet close enough, along with training which I’ve never had a hard time doing, it will happen.  I’ve used the mental excuse that I’m working hard and allowed to abuse my health in the “short-term”, but that “short-term” never stops, and now my excuses have.

So eating clean and being healthy often has quite simple instructions, and I know what to do, even though it’s one of the hardest things to do in practice.  What about my finances though? 

If someone had access to my trading accounts from when I started options trading they could see that I started with low amounts of risk (although later I took plenty of risk), and made millions of dollars before settling into a period of no activity essentially and leaving the industry.  I continued to live a millionaire earner life even though I had no more earnings, and I learned that’s a path to not being rich.  A few years ago with my initial Bitcoin trading I started doing a very low risk arbitrage strategy, made money, but the strategy eventually stopped making money.  Then I built a more complex strategy, took more risk than I realized I was taking, and made millions again.  Then I blew it all up.  I lost years of compounding and consistent large gains on one big trade that would have ended up making money, but I got liquidated.  I had enough money to live a modest life not worrying about money, but I didn’t know what I didn’t know about risk management with futures, which is quite different than trading volatility in options.  I learned though, but that blow set me back mentally almost as much financially.

I got motivated though, revamped my algorithms for months with the hunger to get my money back and more, had some mediocre results, and then finally dialed my algorithm in quite well.  I purposely set up a very high-risk account, made 40% the month before Covid started, and decided to send a large portion of my assets to that account as I felt like I was going to get my money back quickly.  When the crypto markets started crashing on March 12 due to Covid, I looked at my high-risk account.  It was up over 200% in those 12 days to start the month alone, let alone the 43% the month before.  These percentages weren’t on tiny amounts of money either, and they weren’t a tiny part of my net worth.  I had a “normal risk” account, but my backtest results were so good, and were matching my actual returns, that it seemed like in a year everything right in the world if I funneled a lot of my money into this risky account.  My high-risk account at that point was secure as long as there wasn’t a bigger move than anything that had happened in the previous three years, which seemed impossible given how much lower volatility is/the maturity of the crypto markets/how wild bitcoin used to be.  March 12 was different though, and the 50% drop that day blew anything out that had happened before, and my high-risk account was liquidated.  My normal-risk account would have actually had a very profitable month, about 20% if I would have never turned it off, but I shut it down when it survived the aftermath (and was up a few percent) but was fearful of another blowup when Bitcoin started going down big the next day and was losing money quickly. Bitcoin of course recovered that month and started the big uptrend it has been on since.

It was tough financially yet again, but I regrouped faster mentally, figured out several different ways to automatically adjust my algorithms for extreme volatility, and reduced my bet sizes so something like that wouldn’t happen again.  I had some non-impressive months after that with not much going on, then some of the major Bitcoin futures exchanges got into trouble with governments, and there was a scare that money could be seized.  I quickly took all of my bitcoin from the only exchanges I was using and stopped trading as I wasn’t setup anywhere else.  I honestly didn’t mind because it was nice to take a mental break from trading, and there wasn’t much action anyways to make money.  Then Bitcoin went from $10,000 to $25,000+ over the last few months, and I missed out on 100% + in gains according to my backtests, which have been very accurate.  I sent a very small amount of Bitcoin to get my feet wet again two weeks ago, and to verify how my algorithms would perform, and it’s been an immediate 10% winner.  Unfortunately I’m not sure about the best (and safest) way to start trading Bitcoin again.  I think the Chicago Mercantile Exchange, but you can’t use Bitcoin to trade with (USD), and you have to trade in increments of 5 BTC at a time (over $100,000 at this time).  It also has a bit less trading hours and worse fee structure, which is annoying but not a deal breaker.  All of this has led me the past few months to put all of my work energy into working on stock trading algorithms.  I wanted a financial product that had consistent volatility, and where I can go to sleep knowing the exchange isn’t getting raided by the Chinese/US government.

Setting up infrastructure for data science, let alone real-world machine learning projects always takes longer than I would like or expect.  I do have some decent strategies that should be good enough to make money (after months of work), and I started using them to buy stocks, but I noticed in particular the stocks that my algorithm said to buy but ended up losing money, they usually went up significantly after my algorithm would sell.  This happened multiple times, and I was only getting about a breakeven performance with lots of variance, so I stopped.  I wanted to research with lots of data what happens when my algorithm is wrong (were my real-time results of selling stocks right before they went up a lot a fluke, or was it a trend?).  It took an absurd amount of time to get the data that I naively thought would be simple to get, but I finally have it as of Christmas.  It does appear that when my algorithm says to “take losses due to the trade missing its’ time window” it’s a particularly good time to buy.  That’s one thing I love about trading.  You can have a plan, but you’re allowed to actually do the opposite when you find something that is consistently wrong.  I also have several other windows of time and the data to investigate intra-day when the best times to buy and sell are, instead of previously when I was reliant on doing one trade a day.  This is a long-winded way of saying that I badly want to make money again, and I see the edges with my research, but I’m still getting it to work for real.

If anything here sounds like me complaining about bad luck or misfortune, that’s not my intention.  I do 100% believe in variance and essentially good/bad luck.  Misfortunes and occasionally lucky events happen to us all, but especially when it comes to putting money into financial markets, I accept the results as my own doing.  I know from having experienced many large and sustained gains in money that I have a talent for the art and the technical aspects of trading.  I have to remind myself sometimes as there are plenty of harsh moments that I can focus in on and think otherwise for myself.  One of my largest time expenditures in my algorithmic trading research is figuring out if I’m deluding myself.  Do I have data that is accidentally from the future giving my programs a fake historical test?  What are the hidden fees/tricks when I send my orders into the real market that I haven’t accounted for in my historical results? Why can I make money in certain situations if there are other smart algorithmic firms in the game too?  I basically assume there’s a strong chance my hypothetical returns on my computer are garbage until I prove otherwise.  I’ve had enough years now though where I’m pretty good at figuring these things out.  I see some pretty great and what I believe to be realistic returns with the new data, and I’m very excited this next month to get it all running to see for real.  

My goal for this next year is to finish the year with enough money that I can live off meager returns from a boring portfolio for the rest of my life.  I may or may not have that full amount, but I plan to have profitable automated trading running 24 hours a day that will make it inevitable in the near future otherwise.  I’m not going to “retire” or anything like that, and it would be a waste for me to hit some arbitrary amount of money and stop an automated process, but I realized I have the skills/multitude of hours of experience/strategies to make it happen.  I’m not trading 10 billion dollars, so I can reinvest my money multiple times in very profitable situations, and with the law of compounding, good results can grow surprisingly fast.  I don’t know if I’ll eventually need to get investors, if I’ll ultimately get serious with Bitcoin trading/cryptos again, what opportunities will arise, etc, but mentally I’m connecting all of the things I’ve learned since I’ve started over 15 years ago along with my computer science, poker, and related things to finally truly click.  I also have written down a novel of other trading ideas that show promise to experiment with next.  

If you’re still with me expect to get more abbreviated updates as usual in the following weeks!  I wanted to lay out in embarrassing detail my focus and hopefully convey some of the passion I have for fixing my health and money.  My mantra for this coming year is to have the best health and wealth of my life, and have fun while achieving it.  I still want to travel/nomad and have awesome experiences with my girlfriend and friends, as I’ve found I usually end up more productive when I’m not just holed up in an office/room for months on end anyways.  A lot my work is coming up with creative ideas, so surrounding myself with people I love and interesting places has multiple benefits.

Merry Christmas to everyone, and looking forward to keeping you posted on the journey!

Leaving you with my Mom’s backyard in Michigan over Christmas, and last week on the path of my regular walk in Puerto Rico. I’m currently traveling in the airport en route to the island, and looking forward to the slightly different change in outdoor scenery haha. Great time in Michigan though seeing my family and my friend Paul + his family!

2 Replies to “Merry Christmas + Mega Update”

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