The Trader Meetup Dilemma (Part 3)

Ego aside, should I be willing to be completely transparent with regard to trading strategy if my historical performance has been enviable? Perhaps concern about others “stealing” my approach is arrogant and inconsistent with a humble (i.e. egoless) belief that I am nothing special. I think I have to accept the fact that I am something special, though. Furthermore, the line seems mighty fine between offering too much information just to stave off any possibility of ego involvement and giving away the house with reckless abandon. In December 2017, a financial advisor who I very much respect expressed concern over other advisors stealing my “secret sauce” were I to seek employment as a portfolio manager.

I also think something is to be said for standard of practice (SOP) as it relates to transparency. In this industry that is all about the money, the SOP is clearly not to disclose “trade secrets” without collecting some of the money. Compensation may take the form of a management (and/or performance in the case of hedge funds) fee, hourly consultation fee, subscription fee for trader education/investment newsletters, cost to purchase a black box system, or even a per-Meetup fee were I to organize.

As I have discussed extensively, unwillingness to disclose verified performance seems to be SOP among a large segment of the financial industry. I would be more willing to share performance details with those not under suspicion of ulterior motives. This requires an advanced degree of trust and would be more characteristic of a small, more intimate group of retail traders than a Meetup composed of tens to hundreds of people—some of whom may participate and most of whom are strangers.

While SOP therefore validates the extent to which I hold back, I don’t necessarily want to be like all the others. I break the mold with what I trade. I break the mold with my longevity as a trader. I do but I don’t want to break the mold with regard to performance disclosure (I am now seeing the other side of this blog mini-series and will expound at a later date). I want to be different but if I break the mold by disclosing everything to everybody then is it not possible Edge may be depleted? This would indeed be “reckless” and although an unlikely consequence, such is my fear.

Maybe this is more about fear and paranoia than it is about ego involvement. Either way, I’m not convinced it is a bad thing and either way, I think you are getting a good sense of the motivation and reluctance that constitutes my dilemma.