He earns seven times his worst drawdown every year.
Wizard Wednesday #8: Kenny Sharkness, and why every edge you have is temporary.
Chapter eight is a prop trader, so there is no personal account compounding into a headline CAGR. The number that matters instead is a MAR ratio near 7. For every dollar of his worst drawdown, he makes about seven a year. Multiple eight-figure years behind it.
The chapter is titled around change, and that is the entire lesson. Low-float shorting worked until everyone crowded in and borrow costs killed it. Tape reading worked until the algorithms priced it out. Each time, the same loop: learn an edge somewhere, borrow it, modify it to fit what you already do, test it, add it, and let go when it dies.
That loop is my job description too, and his best line makes the case better than I can. Everything works sometimes. Nothing works all the time.
Which is the argument for uncorrelated edges rather than one perfect one. If a strategy goes flat, it costs you a little buying power while the others carry the load. And dead usually means dormant. The crowd leaves, the costs normalize, and the edge quietly comes back for whoever stayed.
One throwaway line I am already testing: he watches for stocks stretched far from a 5-period moving average. I run Bollinger Bands off the 20 and have never tried the 5.
If you want the edges I find delivered with entries, stops, and sizing, that’s Stats Edge Pro. $149.99 a month, 30-day money-back guarantee.
Michael Nauss, CMT, CAIA, CDMS