The Kelly Criterion, popularly known as 'Fortune's Formula', is a capital allocation algorithm used successfully by great traders and investors such as Buffet, Thorpe and Simons.
The formula allocates capital to positive expectation trades with the goal of maximizing the expected compound growth rate of capital over the long term and without the risk of ever going broke.
It is has been proved mathematically that a successful Kelly strategy maximizes an investor's capital in the long run.
We could not have timed the launch of our third fund any better to demonstrate our indisputable trading edge in the shortest time possible. In the last quarter of 2018, the US equity markets just came apart at the seams and spiraled rapidly into a bear market - a fall of 20% from all-time highs. They experienced their worst December since the Great Depression. Despite the jaw-dropping, vicious price action of the markets, our artificial intelligence powered, volatility trading strategies outperformed the S&P 500 by almost 14.58% (net returns before management fees).
Performance in such grueling market environments is invaluable for investors seeking alpha as it clearly separates strategies with a true edge from the rest. Our trading strategies have been built painstakingly over a decade of intense trading, research and experimentation. Our past failures and successes have helped us build our present system of superior relative value volatility trading strategies and enabling AI technologies that will sustain its edge in any market environment.
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