June 2022 Investor Letter: A Bear Wakes from Hibernation
June was another tumultuous month in the markets, with the S&P 500 officially entering bear market territory. The S&P 500 was down 8.4%...
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Blog
We publish our investor letters and other thoughts here.
Richard Sun
- Jun 7, 2022
- 3 min
3 Reasons Why There Has Been a Paradigm Shift in the Markets
In this piece, I will discuss three reasons why there has been a paradigm shift in the markets. I want to preface by saying I am not...
100
Richard Sun
- Jun 1, 2022
- 2 min
May 2022 Investor Letter: More of the Same
May was another volatile month, with the S&P 500, Dow, and Nasdaq all bottoming on May 20th. The S&P 500 hit bear market territory in...
90
Richard Sun
- May 30, 2022
- 13 min
Machine Learning for Stock Trading, Part 2: Data Processing
A framework for exploratory data analysis, feature engineering, and target variable creation Introduction In this series, I will break...
280
Richard Sun
- May 24, 2022
- 7 min
Machine Learning for Stock Trading, Part 1: Data Acquisition
A framework for acquiring financial time series data Introduction In this series, I will break down complex Machine Learning (ML) and...
260
Richard Sun
- May 23, 2022
- 5 min
Shorting Selling: Make Money by Betting Against a Stock
Short selling, or shorting, is a method that experienced investors can use to profit on the decline of a stock's price. Shorting is the...
80
Richard Sun
- May 20, 2022
- 5 min
LUNA to the Moon? A Simple Explanation of Terra’s Extraordinary Crash
How did UST crash and tank the entire crypto market? What do Venezuela and Terra have in common? Well, it turns out that printing money...
300
Richard Sun
- May 5, 2022
- 2 min
Drawdown: Understanding Peak to Trough Declines in a Portfolio
A drawdown is defined as a peak to trough decline in a stock, fund, or portfolio. For example, if you have a portfolio worth $100,000,...
180
Richard Sun
- May 4, 2022
- 3 min
Passive vs Active Management: Merits and Considerations
Passive management and active management are the two prevailing types of investment management. Passive management primarily tracks an...
110
Richard Sun
- May 3, 2022
- 3 min
Efficient Market Hypothesis (EMH): Are Markets Really Efficient?
The Efficient Market Hypothesis (EMH) posits that the market is efficient, and, therefore, cannot be consistently beaten because share...
110
Richard Sun
- May 2, 2022
- 2 min
Sharpe Ratio: Risk-Adjusted Returns Tell a Different Story than Absolute Returns
The Sharpe ratio, developed by Nobel laureate William F. Sharpe, quantifies the return of an investment relative to its risk. The ratio...
140
Richard Sun
- May 1, 2022
- 2 min
Volatility (Standard Deviation): Why Should You Care?
Volatility is a statistical measure of the dispersion of returns for a given security, index, or fund. In general, higher volatility...
500
Richard Sun
- May 1, 2022
- 2 min
April 2022 Investor Letter: The Fed vs Inflation
During April, the Eta strategy lost 5.1%, significantly outperforming the S&P 500, which lost 8.8%. Our average exposure was 40%, showing...
130
Richard Sun
- Apr 30, 2022
- 3 min
Alpha: The Holy Grail of Investing
Alpha, also known as the "holy grail" of investing, is a term used to describe an investment strategy’s ability to beat the market...
150
Richard Sun
- Apr 29, 2022
- 3 min
R-Squared (R2): How Closely Can Performance Be Explained by a Benchmark?
R-squared (R2) is a statistical measure that represents the proportion of the variance of a dependent variable that is explained by one...
150
Richard Sun
- Apr 28, 2022
- 2 min
Beta: How to Quantify Systematic Risk
Beta can be calculated for individual securities and also entire portfolios. For the first part of this post, we will discuss beta in the...
180
Richard Sun
- Apr 27, 2022
- 3 min
Unsystematic vs Systematic Risk: Understanding Company-Specific vs Market Risk
In this post, we'll take a closer look at risk and what that means for your portfolio. In investing, there are two main types of risk:...
200
Richard Sun
- Apr 26, 2022
- 2 min
The Capital Asset Pricing Model (CAPM): A Framework for Quantifying Expected Returns
The Capital Asset Pricing Model (or CAPM for short) is widely used in the investment community to quantify the return investors should...
190
Richard Sun
- Apr 25, 2022
- 1 min
March 2022 Investor Letter: Volatility Reigns
March was a volatile month, with the S&P 500 losing more than 4% to start, then roaring back to end up more than 3%. The latest rebound...
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