“The big money is not in the buying or selling, but in the waiting.” – C. Munger
“Smooth is fast” – Navy SEAL mantra and racing sport wisdom

PRINCIPLES & INTRO

I began saving and investing money at the age of 13 – when I earned my first money delivering newspapers.
The initial path from there, however, had been far from easy.

Why? I was looking for shortcuts, the big and bold trades, with spectacular returns and the desire to be “proven right”. A process fueled by impatience and the fear of missing the big opportunity. It cost me money, time and nerves. It was just a pitiful and exhausting game.

Things changed when I,
1) have progressed and matured, not simply in terms of age, but in wisdom and skills, which ultimately led me to turn all of that off and instead replace it with what is necessary to achieve success in this domain.
2) understood that I need to build and find the most effective processes and methods to reach the full potential of what is possible in markets. And..
3) when I realized, and I mean profoundly and in the depths of my heart and brain understood and accepted, that true wealth is built when you follow a process that is consistent, reliable and that is not interrupted – relentlessly and patiently.

That’s how fortunes have been and will be built, time after time.

And time… time is of essence. Because, yes, it will take time. There will be periods when others will think that it’s not going quick enough. And yes, others will feel the urge to take a detour and try “this and that”. Maybe some spectacular investment that made fantastic returns in a few weeks or months. And they might even be rewarded by doing that initially. In particular during relentless bull markets, when everyone and their pet is making money quick and easy while we keep grinding. Some might be fooled by that, but that’s the pitiful and exhausting game that I, myself, used to be familiar with (going back to my first paragraph).

So the bottom line is, not everyone will be capable of executing and keeping at it. Probably the majority won’t. And that’s ok, the investment mistakes of the majority are the advantages that we have. That’s why the majority gets majority results – average, at best. We can prosper if we calm down and relax (on a ground level), let go of the fear of missing out and instead, let the process of compounding do its work (it’s in the name). This is what I have created for myself and which enables me to live off my capital in a country with one of the highest costs of living in the world – without sleepless nights or having to run around and chase the next “thing”. You’re invited to be part of that journey if you want to.

STRATEGY

I mentioned that the process of building wealth and compounding requires us to not interrupt that very same compounding process, so it can yield the most significant results. There are two common mistakes that can cause interruptions:

The first, is to not actually follow through on it, to start doubting the process when the going gets tough and to stop it. Those who can avoid that have a huge advantage in life, it’s on you.

The second, is temporary or permanent loss of capital, or in other words, equity drawdown. What’s frequently mentioned, yet often forgotten, is that when you lose 10%, you need 11.11% to get back to even, but, after losing 50%, you would need to double your money (100%) to again reach previous equity level. And losing it all… well, one would need to borrow money or earn it back outside of markets to start again from scratch.

So getting in a drawdown comes with risks, and getting back out of it requires time. Precious time that is lost on the long recovery, instead of compounding our hard-earned capital. It is no surprise that drawdown is defined as peak-to-“trough/valley” decline in capital. Just imagine falling into a deep hole and then spending effort and time to fight against gravity on a steep incline to crawl back up.

This is why I put a lot of emphasis on controlling risk, volatility and avoiding big drawdowns. This, of course, does not mean there won’t be losses – this fantasy doesn’t exist in markets. It just means that here, protecting capital is first priority. It also means that I have worked hard to find an approach that ensures that these drawdown valleys are kept as short and shallow as possible (here’s to “smooth is fast”). To achieve that, I don’t just trade one market with one system and hope that it will keep working forever. Markets change and go through cycles. Instead, this approach trades a range of assets, different sub-markets within those assets, several strategies that, in turn, work on different time frames. The approach also uses a rather lower trading frequency. The idea is not to churn out many trades, but to keep a steady profile. Trades are not placed discretionarily based on gut feeling, but follow signals that indicate when it is advantageous to be in the market or to take risk off the table. These signals are the output of systematic trading strategies that resulted from a range of research and work on markets and risk management. It's the result of having experienced a good deal of time in these painful drawdown valleys myself and first-hand. It’s no fun place.

So ever since and for decades, I have been working on investment processes, studying markets, distilling best practices in the industry and developing trading systems and investment strategies to, ultimately, create this.
Happy compounding.

ADDITIONAL INFO

- I understand that it appears tempting to trade options and futures, long and short, but I very intentionally decided that this particular set of strategies here on C2 will trade single stocks and ETFs, long-only, so it can be implemented in almost any brokerage or retirement account.

- Because the strategy has a relatively low risk-profile, I apply leverage to increase potential returns even further, as is currently done on the C2 implementation. I personally don’t go higher than what is on C2 (and I wouldn’t recommend and don’t think it would be necessary to do more), but I don’t know some of you personally, so you can obviously dial this up and down as per your preference. Please also note that the simulated performance does not include the cost of leverage, as these costs can vary from broker to broker and C2 is not able to estimate that in their calculations.

- I will send communications and notes to subscribers occasionally, whenever I believe that we are in a period in which a more detailed communication on the strategy's current state or market environment is required. Otherwise I will not spam you with anything meaningless, as it would go against the principle of "relaxation" or a steady profile, for both you and me.