Chris J’s track record

[Chris Scoreboard Johnston]

Heavyd

To answer your questions:

First – this is the only account I have entered in the Robbins Trading Contest. As I had explained earlier, the reason I entered this contest is to have something published by someone other than me showing my returns. I have no interest whatsoever with Robbins, but they are now pursing me for obvious reasons. These results are independently audited at the end of each year to determine the final standings. I fail to see a conflict of interest. I have over a million dollars in my trading accounts at other firms, and a much lessor amount at Robbins. This is the only contest of this type that exists, so this is where you have to go to be a player.

Second, in general I risk 5 or 10% of my account balance on each trade, in this particular account it is 10%. This account has never been in the red this year because it started off with several wins in a row. It did have one streak of 3 consecutive losses a couple of months ago. At that point it dropped down from a 62% return YTD to 17%. Now it has had 5 straight wins following those 3 losses taking it back to 45%.

Other entrants I believe have much higher risk settings than I do which is why they have such big returns. One guy went from 90% to behind me in the last month, so clearly he was risking large amounts.

I have dipped my toe into the managed money world, and anyone who has dealt with the NFA in this forum would understand why I am trying to run a business that does not deal with them. They delayed me for over 6 months over 3 words on my website. I was paying a staff of people during this time. It wound up costing me so much money that I went a different route for the time being. I could have sued them as they are not technically a government agency, but I just decided to stay clear of them for the time being.

I will eventually run a hedge fund, but there is substantial expense in setting one up. Further, the govt is about to go witch hunting them and probably rightfully so. I want to stay clear of that shakeout for the time being. I can make enough money trading on my own to live the way I want, but was convinced by a broker friend of mine to go public. He knew my results and thought I could attract alot of money once they became public. This whole thread and other comments over the last few months are exactly why I did not want to ever deal with the general public.

Someone essentially calls me out to show proof, I do it like nobody else in this blog has ever done. Has anyone else ever shown anything remotely similar to this proving what they claim? Then I get comments like a few that have been made here about website hits etc.. I appreciate the spirit of your comments and I hope that I have addressed your questions.

I have been a private trader for awhile and am just going public, my results have been good over time. Some years have been much better than this one, some worse. I have had a few very big years percentage wise and a few that were barely ahead. Just as in any trade, I do get better and more consistent as time goes on. I also have other accounts that trade S&P systems which are not for the public at this point. They are very volatile and not for everyone’s taste in my opinion.

The bond trading system I offer in my service to the public is what is featured in the contest with the previously stated risk parameters.

PW – it is the way comments are phrased in here and in life in general that dictates the response you get. For example, to use a specific prior instance regarding the year ending in 7 mid year correction. I do not recall the exact way the critique was phrased but it was some sort of reference to back to the future I think. You can refer to it as some type of futuristic whatever the phrasing was or you could say, “I am not familiar with that, what exactly is that cycle? It sure sounds unusual?”

This would have gotten a clear concise nice response from me, but when it is belittled with me having learned it from one of the greatest traders who has ever lived, it creates a negative reaction. Doesn’t that make sense? I am not here to teach bedside manner. It is so easy to hide behind some screen name and be completely anonymous. I choose to deal in a very straight forward manner with people. It is how I think someone should conduct themselves, but to each his own. I do not need to hide behind a false name.

Anx – to address your comments about emotion. Actually most successful traders are very emotional and passionate about what they do. I am an ex hockey player, wrestler, and martial arts guy, so yes there is some fire in me. I am glad I have it. Just read a few interviews with Tom Baldwin or Paul Tudor Jones. Tom Baldwin threw a pencil across the bond trading pit and it stuck in the head of another trader when they were arguing over on OUT TRADE. Please do not comment on the OUT TRADE, it is an industry term that refers to settling of trades at days end in the pits. He wrote a check on the spot for the $125,000 fine and through it on the floor, said fuck you to the exchange official, and walked away. Baldwin is generally considered the greatest bond trader who has ever lived. Bill gross cannot shine his shoes. Gross may have made more money than Baldin from fees but not near it from trading. He is an emotional guy but funnels that emotion properly.

You are correct that being emotional in trading would be a negative. I am a systems trader, who follows exact rules with no deviation which removes all emotion out of trading. It is the best approach to this business in my opinion. The passion comes in with the research aspect of things.

With all of this having been stated, I wish all of you in here well. I have just had enough of all of this and I wish I had never even mentioned that I was a trader to begin with in here. I think this blog has turned into alot of personal attacking on people, and as a result is not the great forum it used to be. Many online trading chat rooms have suffered the same fate. At some point you need a moderator to keep things from getting out of hand.

I will be a the meetup day gathering but probably will not participate in here any more. I am thankful to have met the people I have met through this blog. There are some really great folks in here.

Best wishes to all of you fine people in here.

Chris J

[JES]

Chris –

I just finished reading a book by Larry Swedroe called The Only Guide to Winning Investment Strategy You’ll Ever Need. In the book, he covers Modern Portfolio Theory and goes into great detail about why professionals are no better at guessing on the market than those who just bet on the S&P500 index. He compares picking stocks to random coin flipping, and he actually proves that those who would have just flipped coins would have beat the pros the majority of the time the past 20-30 years.

The book made alot of sense to me. How can portfolio managers, brokers etc. hope to beat a market that is nearly perfectly efficient? And even if there were a chance, the 80% of the market run by institutional investers have thousands of Harvard MBAs on their teams looking at every angle possible. Still, we see money managers profiled in the press and on TV as having beat the market. Interestingly enough, the ones profiled always seem to change, and if you track them over the years you find that you would have been better off just betting on that S&P 500 index.

What insight do you provide that the thousands of Harvard MBAs haven’t already uncovered? Or would you include yourself in the catagory of those who just happen to get lucky on very well researched choices? Not trying to be overly critical, but I really need to understand this. The fact that you have had great success in this contest can be expected as I’m sure all professionals have ups and downs. But I have seen very convincing evidence that over time leaving my money in non managed index funds that are diversified is the best strategy.

[Anonymous]

JES, I understand your thoughts, and your questions to CJ.  Here is my unsolicited response on a related topic.

To graduate from Chicago, one must genuflect to the Index Gods and say, "Markets are efficient, markets are efficient, one cannot beat index funds."  I learned finance from one of the fathers of efficient markets, Eugene Fama (in his two class Ph.D. sequence).

'I believed,' and took the blind indexing path over '92-'04. Worked well enough (I was 100% at Vanguard:  50% in the Russell 2000 index, to take advantage of the 'small company effect,' 50% in the S&P 500 index), though only so-so during the sideways market over '00-'04. I, like millions of others in the U.S., thought I was a smart, insightful investor.

Then, I fell upon PrudentBear.com (after seeing it mentioned here, I think) and 'The Case for Gold,' and found it compelling. I did some independent research, went into gold mining mutual funds in early '05, and have been handsomely rewarded.

Markets reflect the collective wisdom of lots of folks, some smart, some emotional. I blindly relied upon the market over '92-'04, and it worked well enough. Looking back, though, I wish that I had been doing fundamental analysis, at the very least watching the P/E ratio. I found the zooming prices confusing, but since things were going my way, I paid no heed. Clearly, if I had been looking at the fundamentals, there were clear signs to abandon ship. Exactly as in the San Diego housing market.

Lots of people call George Bush dumb. One quote that I remember during his '00 campaign, was, when asked where he had his money parked was, "I'm liquid," meaning he was out of the market and in cash. George Bush is no dummy, and he avoided the crash by looking at the fundamentals.

Once burned, twice learned: I'll pay attention to PEs next time I'm in index funds.  Markets are efficient over the long haul, but there are lots of dummies and emotional folks who mess up things during the interim.

Warren Buffett:  in the market, some days Dr. Jekyl shows up, some days Mr. Hyde.

Warren Buffett:  markets, in the short-run, are voting machines, but in the long-run, are weighing (profits, free cash flow) machines.

When I return to index funds (post recession/depression), I intend to take a hard look at this flavor:

http://webreprints.djreprints.com/1497650936231.html

http://www.wisdomtree.com/index.asp

This approach to indexing, brought to my attention by my father-in-law, makes great sense to me.

[powayseller]

I also have come to believe that nobody can beat the S&P500 over a longer period of time, so that’s why I was asking about Chris’ previous returns over the last few years. He may be having a good streak now, or maybe he is one of those superior traders, like Bill Miller. We don’t know, as he didn’t provide his long-term results.

In all fairness, I am admitting that I’m a horrible stock picker, so I just try to meet the general stock market performance. Like jg, I was fooled by the Wall Street marketing machine, which does *not* teach us to be in cash or gold or real estate. So I missed out on investing in real estate and gold. I am done listening to the Wall Street propaganda machine. They only recommend products on which they earn commissions, and they don’t make money when you put your money in CDs or buy rental property or gold. They also don’t make money teaching you how to market time, so instead they have you “dollar cost average”, the biggest fraud perpetrated on the public. This just teaches us to consider the source. Wall Street’s recommendations on investing is like Lereah’s recommendations on real estate. Come on, can you really believe them?

Chris, I hope you stick around. You have a lot to offer, and so what if we ask you about your returns? Ask me about mine. I missed the real estate and gold bull markets. I’ll readily admit it. Now I’ve learned from that and hopefully am better for it. I’ve also learned there are no barriers to entry into internet forums, so anybody can come here, say whatever crap they want and hide behind a fake name. Ultimately we all show our true intelligence and character in our responses, and you showed your good character by your very good response.

[Chris Scoreboard Johnston]

JES

I completely agree that stock picking is very difficult. Most of the traders who consistently beat the indexes are people you have never heard of and there are not alot of them. I think I saw a stat recently that showed that only 5 newsletters that had been published over the last 20 years had beat the indexes each of those 20 years. That is obviously a very small amount.

If you just listen to Cramer one time you can come to realize how arbitrary a decision to buy or sell an individual stock can be. His process is so random as to how he decides whether he likes or dislikes an individual stock, and he is a very intelligent guy.

My website describes my approach which is systematic, and why I believe it gives me an edge over most people. Very few people are disciplined enough to develop a set of rules and follow them without deviation. Of all of the traders I know, only one of them does this as well as I do.

As to the comparison to the Harvard MBA’s, I do not know one single trader who is consistently profitable who has a background like that. I do not know why that is the case, but if I had to guess I would say that it has to do with over optimization in their models. Curve fitting your research to closely to data becomes more of a danger the smarter you are. There is an argument out there that says that being too intelligent becomes a negative for trading.

Maybe that makes me a dumb…. LOL! Once again, all the contest result was designed to do was provide proof of a return in an account. If you want a second one, you can go to the following website. http://www.precisioncapitalmanagement.com.

This was a small account that I traded a few years ago which you can see by the dates. It was funded with the amount it was because that was going to be the target client, in the 30 – 50k opening balance range. This table was approved by the NFA after the previously described 6 month delay they gave me. So now we have a second account that shows a superior return. This company is defunct because I closed it after running tired of paying salaries for staff for something that just was going nowhere. However, the employee that created the site which I think is lousy by the way but he was so insistent on keeping it the way it is, has lifetime free hosting. As a result, I think that site will stay up until a time when for whatever reason he decides to take it down. I have no contact with him at this point so I do not know what he is doing with it.

It is possible that business could be re-started at some point, since the NFA approval is already done. It was still up when I checked the other day. I will certainly change the format of the site as it looks crappy to me. You will see that return is better than this years in percentage terms. This year has not been a good year for me so far trading.

I do not believe there is any luck at all in trading, you do your research, develop your systems, and make the trades. If you have read my commentary in here this year regularly you know that I have been telling everyone a big rally was going to take place this year. Now it is here. I did not get the low in terms of the buy point, but my model has not given me the entry yet. How did I know? I didn’t know anything, it was just my research that told me this would happen and it was correct.

Follow Stevie Cohen and Bill Dunn. They are traders that have beat the indexes year in year out for many years in a row. Bill Dunn is not open to new investment, he has had I think over 20% on his fund for 25 straight years. ( Not sure about this but I think this is accurate ). He is the Tiger Woods of that field.

As in all fields what the experts tell you as far as indexing etc is full of conflicts of interest. The older I get the more I realize that about 80% of what is perpetuated on the public is disengenous BS designed to enrich the insiders. RE is a perfect example of that with all of the statements by Leareh etc.. Brokers are notoriously bad traders so whatever you do, do not buy stocks recommeded by brokers.

I hope I have answered your questions, this is the best that I can do to address them. You have to keep in mind that I have studied the markets and traded them for more than 20 years, so I should be a little bit better at trading than most even if I am a dumbo.

[anxvariety]

At some point you need a moderator to keep things from getting out of hand.

That doesn’t sound like a hockey player to me!

Tom Baldwin threw a pencil across the bond trading pit and it stuck in the head of another trader when they were arguing over on OUT TRADE.

I used to throw pencils too… when I was in 3rd grade.

[Chris Scoreboard Johnston]

I think it becomes clear with a post like that your true intentions.

Have you ever made a postive comment in here? What would it take for me to post in this blog for you to make a postive comment about it? If you wish to talk my cell is 949-554-4150. I think you know my email at this point.

You ask for proof, and I provide it, then you belittle it.

I sure hope that everyone else who is seeing this play out sees you for what you really are, just someone for some reason trying to antagonize someone else.

Why don’t you tell all of us exactly what you are trying to accomplish here? You still seem to be acting like you are in the third grade to me. You have made fun of Peter Lynch and his trading concepts and now Tom Balwin, who is next Buffett?

I love you to little buddy

[powayseller]

I agree, that last post you got was on the personal negative side. I get this negative stuff too, and it’s too bad. piggington is supposed to be a community of people wanting to learn about the housing market and investing, and when people pick on each other, it thwarts our community effort.

We show our intelligence and character in how we treat others, and your responses Chris have been exemplary.

[Anonymous]

PS, you haven't missed out on gold. It's $600 today. Peak gold was on Jan. 21, 1980, at $875 (intraday). Per

http://data.bls.gov/cgi-bin/cpicalc.pl

that's $2,165 in '06 dollars. Plenty of room from $600 today to $2,000, which it will get to in the middle of the panic.

[powayseller]

I have promoted Chris Johnston here and on Roubini’s blog for several months now. I still hold his trading ability in high esteem. However, I need to make others aware of potential problems with the way he sets up his billing with PayPal. He told me that our quarterly fee of $225 will *not* auto-renew, but it does. PayPal verified that my second quarterly payment was made to him, without my knowledge, because he sets up his system to auto-renew. According to the PayPal representative, I was about to have another quarterly payment withdrawn from my PayPal account on November 15. She said, “He’s got you set up to have another $225 taken from your account on November 15.” Chris says I am the only customer to have had this happen, and that he does not auto-renew. However, his website does state, “Note: Your subscription will automatically renew at the rates stated above unless you cancel prior to the end of the billing period.” PayPal’s manager said the biller has to set it up as one-time or auto-renew. PayPal does not on their own initiate a charge. So my quarterly auto-renew was set up this way by his company. I wanted so badly to believe Chris over PayPal, that I argued with the higher level manager over 5 minutes. He told me to read the biller’s website, and that’s when I went back to Chris’ site and found that he does state there that the payment will auot-renew. I had told him in August I didn’t want to renew, so the charge made to me was an unpleasant surprise. He said he would issue me a refund, and I believe he will.

The good news is that his trading account in his bond futures, the service for which I subscribed, is doing very well. I think you will have good returns with him if you sign up, but just beware of the way the billing works. If you ever want to cancel, you’ve got to call PayPal to stop the automatic withdrawal that occurs every 3 months.

[Author]

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