#HedgeyeNation is growing stronger every single day! On that note, we strongly encourage you to check out the conversation above.
Hedgeye Power User Robert McGroarty hosts "Weekly Notebook Review" sessions (on Twitter Spaces), providing a forum for #HedgeyeNation to get together and talk investing and learn from one another.
This particular "Weekly Notebook Review" recording was joined by none other than our Risk-Manager-In Chief Keith McCullough. Here's a quick taste of the discussion with Keith's commentary on position sizing:
|
"I've learned so much from my mentors in this business, like my mentor Jon Dawson (who was my boss at the first hedge fund I worked at, Dawson-Herman Capital Management). Sometimes I learned what not to do. Jon used to put on a teaser position of 50bps. But why put that position on if it's not at least 1% or 2% of your portfolio? What you need to do is define your min and max position based on Quad conditions, which are basically volatility conditions. And when you decide to put any position on, you put it on with some size so that it makes a difference to your overall portfolio... Think of your positions in terms of units of inventory or units of risk. You all are younger than me, so if you can get better at sizing your positions in this way you'll be so much better than my former self. That is a much better way to invest." |
(This was audio was recorded on March 30th.)
A FINAL NOTE
We, at Hedgeye, salute Robert McGroarty's efforts as he grinds to preserve, protect and grow his own portfolio while also sharing lessons learned with our growing community of risk managers – from the world's largest institutional investors to the sharpest active, self-directed traders.
Thank you, Robert!