Why I Choose Lean

Prioritize returns and educating investors. Have the ability to think and execute without distractions. Build rapport with current and prospective investors. Say what you have to say, not what you think others want to hear. Tell the truth no matter what.

I speak out about running a small and more importantly a lean operation in an industry where you’re not seen as “cool” unless you manage +$100M in assets and have a staff of PhD’s and MBA’s. I’m not opposed to managing a high level of assets, but only if it means I get to focus on trading, research and educating investors. If managing a lot of money means taking on the extra baggage of doing business with uninformed and unwilling-to-learn performance-chasing investors, having to tell people what they want to hear just to get and keep their accounts and spending more time with these people than my wife, family and friends then no thank you. Not interested. Performance and my health would deteriorate and that ain’t happening.

I thought I’d address some of the reasons why I launched Melissinos Trading with the priority of generating solid returns and education instead of running a large and complex shop. For context, we’ve outperformed our benchmarks since inception while, at the same time, maintaining a low correlation to traditional asset classes and our AUM has increased ~50%, on average, each year (Past performance is not necessarily indicative of future results).

Reasons, in no particular order

Doing the right thing is always the best marketing. The best performers don’t have to design fancy marketing campaigns to tell you how good they are. Their on-field performance does the job. Spending time and money on marketing, that is, traveling to conferences, paying third-parties and partnering up ultimately gets paid for by customers – if not in costs then in lower returns. I prefer to market by giving away free content (simply sharing information that can help you become a better investor), not by telling you how good I am or why you should love trend following or invest with me.

Freedom to say what I have to say. When you don’t care about controlling people, a load comes off your shoulders. You feel free to say whatever’s on your mind without worrying about Mr. Big Investor not liking it and withdrawing his money. I don’t mean you go out of your way to offend people, but instead to share your feelings and be firm on your principles. For example, telling investors to expect losses (possibly steep and for extended periods) probably isn’t in many marketing manuals, but it’s the truth – every investment strategy loses money sometimes. If that scares potential investors away then so be it. Only when you fully express yourself do you find a pure fit with a customer.

To reduce distractions. Writers write. Chefs cook. Traders trade. Football players play football. Professionals do what’s essential to perform at their best. They don’t take on side project after side project because they’re bored or want to make a few extra bucks. Often times, these distractions reduce performance of their main job. Investment shops hire quants, marketers, traders, client-service people, etc and after a while find themselves in time-wasting meetings, administrative work and other endless nonsense that does nothing to improve returns.

I don’t care about selling the company. I plan on running my company until the day I die. This isn’t some short-term way to make money nor do I see it as a stepping stone to something else. I’m doing what I want to do. I love trading, working on improving my game and educating investors through various forms of content like articles, videos, podcasts and especially in-person meetings. Not worrying about fulfilling some bigger vision allows me to focus and it helps me do my job better.

Returns shield against bullshit. When you perform well, you present the facts instead of trying to convince others through complex language. You can shoot people straight. When you run a lean profit-making business, you don’t have to worry about debt or making payroll. Profits give you freedom that raising money never can; more importantly, profits give you peace of mind and allows you to relax and execute.

Thanks for reading.

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