Make Money While Cruising - List

[Certeza]

Originally Posted by Therapy

Okay. Stated that way, a 4% risk for a 14% gain. Sounds pretty good to me.

That's what I've been trying to say. 14% target returns on 4% risk is great.

But 100% returns on 75% risk is like saying 5.3% returns on 4% risk. Doesn't sound quite so appealing in comparison, right?

[Therapy]

Originally Posted by frank_f

+1 there.

My company matches my pension contributions and invests it with a money market manager. After almost 15 years I have about a 1 increase over the contributions. The poor returns didn't stop them from taking their fees every year and it doesn't seem like I can move the money to another firm. I could have done better with a savings account.

While my history is not that bad I sure am pissed at the people that have handled my money over the last 30 years. If I'd had somebody decent for that, I'd be out there. Now I don't know if I can or not.

[Therapy]

Originally Posted by Certeza

That's what I've been trying to say. 14% target returns on 4% risk is great.

But 100% returns on 75% risk is like saying 5.3% returns on 4% risk. Doesn't sound quite so appealing in comparison, right?

I understand there's different ways of comparing this stuff my problem is how I wrapped my head around it. If I took the entire million and got lucky. The 75% risk if this is our example and if I'm reading it correctly, then I'd have liked millions right away. Obviously, that's too much risk. But looking at a small portion and taken the risk and then making the profits would certainly makes it a lot brighter.

I'm not much good at math.

[frank_f]

Originally Posted by Certeza

Yeah, not a big fan of that type of manager. IMO, charging a 1/2% management fee to do nothing and only get your clients 1% annual is robbery.

If a professional is gonna charge, he should be offering target returns that are above what the client could do themselves on the same level of risk.

Annual? I wish.

From what I can see on their quarterly statements, the company and I have put $30000 into this account over the years that now stands at $32000. So a $2000 gain for approximately 15 years of investment. This is precisely why this is such an interesting thread for me.

I have my Complete Turtle Trader ebook as well as Living on the Margin by the Bumfuzzle folks and a slack weekend where there isn't much I can do on the boats anyhow. Firing up the coffee pot as we speak.

[Cormorant]

For Frank and Therapy and anyone else interested, there was an earlier thread about MRCI, which walks you through it a bit:

http://www.cruisersforum.com/forums/...ing-78100.html

I gave it a try and we're up $50,000 on an initial investment of $20,000, after less than one year. So what Delfin says is correct -- it just works.

What Certeza says is probably also correct -- there's risk, and drawdowns, and crazy volatility. . . . Especially for those of us who don't follow Delfin's advice to hew precisely to MRCI's enter and exit dates, and one of each spread. I tend to try to cherry-pick, and double up or triple up on promising spreads -- which basically leads to higher highs and lower lows. I'm now leaning toward trying to be more programatic about it. Not worth overthinking it.

It helps that I'm not cruising full-time. Just building the cruising kitty for our summer cruises and eventual long-term voyages once the kids are off to college. . . . But I think I could make it all work with from the Bahamas all winter, easy.

[Certeza]

Originally Posted by Therapy

I understand there's different ways of comparing this stuff my problem is how I wrapped my head around it. If I took the entire million and got lucky. The 75% risk if this is our example and if I'm reading it correctly, then I'd have liked millions right away. Obviously, that's too much risk. But looking at a small portion and taken the risk and then making the profits would certainly makes it a lot brighter.



I'm not much good at math.

Problem is that you run into a leveraging problem.

Let's assume that you found a program with average 14% returns and 4% risk. So you decide to do your idea of using only $40K and leveraging it 25 times to get to 350% returns and 100% risk. Unfortunately for your plan, the capital requirements in most programs are going to be such that it isn't possible to leverage 25 times in the small account.

[Certeza]

Originally Posted by Cormorant

For Frank and Therapy and anyone else interested, there was an earlier thread about MRCI, which walks you through it a bit:

http://www.cruisersforum.com/forums/...ing-78100.html

I gave it a try and we're up $50,000 on an initial investment of $20,000, after less than one year. So what Delfin says is correct -- it just works.

What Certeza says is probably also correct -- there's risk, and drawdowns, and crazy volatility. . . . Especially for those of us who don't follow Delfin's advice to hew precisely to MRCI's enter and exit dates, and one of each spread. I tend to try to cherry-pick, and double up or triple up on promising spreads -- which basically leads to higher highs and lower lows. I'm now leaning toward trying to be more programatic about it. Not worth overthinking it.

It helps that I'm not cruising full-time. Just building the cruising kitty for our summer cruises and eventual long-term voyages once the kids are off to college. . . . But I think I could make it all work with from the Bahamas all winter, easy.

To be clear, nobody here is saying that MRCI system hasn't produced consistent returns. In that respect it is very commendable.

What some of us are saying is that according to their historical performance, in the suggested $40k acct the trader should expect periodic downward swings of as much as 75% of acct value.

That is considered insanely volatile by normal standards and by definition a program like that isn't very scalable because if you built the acct up to something like $1MM you might login at some point to be back down to $250k. Losses like that in the course of a month or so are devastating to most people .

[Cormorant]

I know you're much more quantitative about this than I could ever be, but it all seems like a reasonable trade-off to me.

I've never encountered an investment so dramatically profitable before. If periodic awful downturns are the price to pay, that's fine . . . so long as it all recovers and powers onward eventually, which so far seems to be the case.

[Certeza]

Originally Posted by Cormorant

I know you're much more quantitative about this than I could ever be, but it all seems like a reasonable trade-off to me.

I've never encountered an investment so dramatically profitable before. If periodic awful downturns are the price to pay, that's fine . . . so long as it all recovers and powers onward eventually, which so far seems to be the case.

Fair enough. Only you know your risk tolerance.

For everyone else...

Imagine a friend gave you a tip about an investment manager who'd gotten him good returns. You call him and he says his program is pretty aggressive but consistently profitable. He charges 1.5% of your account each year in fees.

You open up a $40,000 acct with him in January. He sends you a statement in March and your acct balance is up to $50k and you paid him $150 in fees. You're happy with the results.

Three more months go by and you open your statement to find that your account balance has lost $40k, dropping all the way down to $10,000 and he still charged you another $150 in fees.

Honestly ask yourself what your reaction would be. Would you shrug your shoulders and say, "oh well, he'll get it back"? Or, would you be picking up the phone to figure out what crap is going on and thinking about closing your acct with him?

If the latter sounds correct, you shouldn't consider trading the MRCI system in a $40k acct. It is outside your risk tolerance. It should be obvious, but there is literally no difference between the above scenario and trading your own $40k account in that system, except in your own acct you did all the work and still paid the fees.

[Delfin]

Originally Posted by Cormorant

I know you're much more quantitative about this than I could ever be, but it all seems like a reasonable trade-off to me.

I've never encountered an investment so dramatically profitable before. If periodic awful downturns are the price to pay, that's fine . . . so long as it all recovers and powers onward eventually, which so far seems to be the case.

Which of course is the point.

The risk of an investment should be understood before committing capital - no one disputes that. Nor should anyone invest money in any non guaranteed investment that they can't afford to lose without catastrophe. By the same token they should not be deceived by someone who tells them that the estimation and management of risk is somehow a precise science that resides in the hands of a few. If it pleases some to assume that those of us who have found seasonal spread trading following Moore's analysis to be absurdly easy and profitable must therefore have no conception of risk, then please, blather on and keep explaining why planes can't fly. But the entire point of the approach of Moore, which I have attempted to detail, is that they do a historic analysis of the ups and downs of a particular trade over 15 years and publish the results. You can look at that analysis, and you can see what the worst case scenario was on a historic basis before you trade. You can look at how the current price action for recent months compares to 5, 10, 15 year averages and make an informed decision of whether to place the trade or not. Risk management is a critical part of investing, but it is also worth looking at the frequency with which realized risk manifests itself as a downturn. In Moore's case, it's less than 5% of the time that a draw down in capital would exceed current years profitability. Would that be a painful draw down when it occurs? Sure. So if you can't handle bad news 1 year out of 20, don't invest in spreads. Pretty simple, really, even if it is certainly possible to make simple things look complicated if it suits you.

[Celestialsailor]

Just thought I would post the original post #1 to ground the thread rather than 4 people debating markets.

Originally Posted by Agility

I'd like to create an exhaustive list of how folks who are deeply passionate about cruising have also found ways to make money while cruising.

Here a quick list to start us off:

1. Writing books
2. Editing magazines
3. Charter own boat
4. Software development

Let's try not to include, sail a while then work a while, but how can you make money while sailing.

Keep the list going so the next idea is number 6.

What I have found down here in Mexico on the morning net are 2 or 3 people needing their inflatables repaired. There is a guy here that pulled in years ago with little intention of stopping and repaired a few inflatables for the cruising fleet. Apparently, he's been here for years now and actually rented a building near the airport for his business.
I'm sure to do this off your boat, you would need little more than a few different types of fabric and a few glues.

[jostalli]

"Ground the thread"? Why? This is one of the few promising money making ideas generated.

[Celestialsailor]

Oh...how easily we forget and repeat our mistakes...

[jostalli]

Originally Posted by Celestialsailor

Oh...how easily we forget and repeat our mistakes...

I'm not sure I follow. I know it's been discussed at length before but that doesn't mean it's not viable or worthwhile. Why try to squash the conversation by offering an idea of how to make money by fixing inflatables?

[Celestialsailor]

I was talking about the markets in the early 2000's...remember? The OP, I believe, was looking for something a little more tangible. Perhaps he can chime back in with an opinion.