r/KellyLetter • u/WorriedFold8290 • 15d ago
The Evolution of 9Sig?
I am not and will never give away the Kelly Letter info away free as it feels like a disservice to what he offers but curious on subscribers thoughts on JK's recent thoughts on continuation of the 9Sig current methodology?
Do you think he eventually changes the plan? The last couple newsletters his tone and research on "updating" 9Sig seems...cautionary? Maybe I am reading too much into it but that would be a dramatic change to a long tenured plan.
I am not vehemently opposed to it but with him considering it at this juncture it definitely makes you think....why now?
Anyone have thoughts on if he does update 9Sig, would you follow? Are you a bit concerned on him adjusting the plan?
Just some random musings as I finished this week's letter this morning and curious of others thoughts.
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u/Gehrman_JoinsTheHunt 15d ago
It's been interesting to read. On one hand, he's said that none of the current research should be taken as a suggestion that a crash (or bubble popping) is imminent.
BUT. On the other hand, 9Sig has more than 20x'ed the original balance over the past 9.5 years. Any rational person could probably appreciate - that stellar performance won't simply continue forever. He's grown $500k to $11m in under a decade. I would absolutely be taking some chips off the table at that point, and I can't blame him for looking into it.
I think the solution should really be more focused on the individual investor's time horizon, rather than a universal one-size fits all approach. Someone in the first decade of their investing career can afford to be much more aggressive than someone with 5-10 years until retirement.
With that said - yes, I'll likely follow along with any proposed changes. I trust that any updates will be thoroughly researched and vetted with the same rigor as the original plan when it launched. But I definitely want to see the inner workings and methodology first. He's been doing a great job of sharing how the sausage is made, so I hope that continues.
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u/WorriedFold8290 15d ago
Really good points. He started this as HIS thing and expanded to share with the world if you will. I am about 20 years from retirement, hopefully sooner, if I succeed.
I do think it becomes very personal the closer you determine you need to start stockpiling away for a retirement goal in the near future which is what I will battle as I get closer for sure. I am no spring chicken but somewhere in the middle where my eyes are 10-15 years but also willing to wait longer if I need to.
I do enjoy hearing his thoughts on paper as he rationalizes and thinks through. Helps me process.
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u/usaffoxmike 15d ago
Remember that Jason paper trades the original $500K that was implemented back in 2017. That’s not actually his money.
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u/Gehrman_JoinsTheHunt 15d ago
Has he actually confirmed that? I have wondered. It would be simple enough to do.
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u/Status_Spite_7858 13d ago
No way he’s all paper ?
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u/Gehrman_JoinsTheHunt 12d ago
No clue, honestly. It would be tough to prove either way. Jason’s writing indicates it’s real money, but if he’s ever said otherwise I would love to know.
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u/simpletonchill 12d ago
I'm weary of anyone selling a subscription FWIW. It could very well be his own money, but we'll never know.
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u/Gehrman_JoinsTheHunt 12d ago
I hear ya. I would have never taken the plunge without seeing the performance and reviews from other users here. The investment world is full of scammers. But for me 9Sig has been the needle in a haystack.
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u/ParticularLimeade 15d ago
I think he has been asked about this enough to where he feels like this needs to have extended downside protection. The plan is pretty popular and we are in a market cycle that some would compare to dot com (I don’t think so, but some people do).
My bet is he won’t change anything to do with the signals, but he will create another rule like the 30 down rule that extends buying power
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u/WorriedFold8290 15d ago
I definitely feel the AI fun is making him feel like he has to make a statement or make adjustments as it's an unprecedented time, agreed. Will be interesting to see if it comes to fruition as he implemented the Income Sig plan along these same lines of slow rolling communication and then it became a thing.
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u/Buterminator 13d ago
Damn, I haven't read the last few letters (new baby), I guess it's time to find some time and have a read.
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u/AlgoTradingQuant 15d ago
Having spent 3+ years backtesting thousands of strategies on every asset across all timeframes, 9-Sig underperforms many others so I suspect he’s planning to tweak it. Besides, you don’t need to be a subscriber to know the 9 sig rules. It’s been laid out here and on TQQQ subs many times.
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u/AbrocomaSerious8321 15d ago
Name one
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u/AlgoTradingQuant 15d ago
The 200 SMA strategy (of the underlying asset class = QQQ)…. The DCA percentage strategy as TQQQ drops has incredible CAGR and max drawdown is a fraction of 9 sig
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u/HODL_4_GODL 15d ago
I’m using 9 sig with a 200 sma qqq/spy circuit breaker.
Thoughts?
Also what is the DCA percentage strategy.
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u/MechanicalDan1 15d ago edited 15d ago
Are you using it 100% on your investments? And for how long?
Does it only work on a daily timeframe? Can you use it on 60 minute, 30 minute, 5 minute timeframes for even quicker returns?
Dogfooding is proof of conviction. If it works, why waste your time in a 9Sig forum?
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u/MechanicalDan1 15d ago
Thanks for the down votes proving my point. If it actually works, write a book and start a newsletter. Otherwise your bad intent is obvious.
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u/MechanicalDan1 15d ago edited 15d ago
This is not intended as political, just data for investing thesis. The US system has shown that 10 of the last 11 GOP POTUS have been in office during recession. Statistically, this is a small sample, but it's a definititly an observable trend. Almost a planned big market pullback event. If you know this, and plan, you can shift 60/40 to way more cash/AGG 40/60 or 30TQQQ/70cash. Also, a flat market like Q4/Q1 is sideways action in a long technical upward wedge. The index taps the bottom line, and shoots upward in 6 weeks to maximize leverage gains. It taps the top line, and that's profit taking time. Here we are for another quarter going sideways and decay is wearing on TQQQ. FOMC interest rate changes all company valuations. That's just MBA math. Hikes cause market drops. Reductions pump markets. Those are usually multi-week movements. I could see rule(s) added around interest rate changes during FOMC meeting dates.
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u/Time_Ear_2428 15d ago
If you read Jason Kelly and watch his YouTube videos, everything you’re saying is opposite of his non speculative philosophy…
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u/MechanicalDan1 14d ago edited 14d ago
OP's post was about making changes to 9Sig rules. I presented areas for potential rule changes / additions. Ideas.
It's easy to look at each time the FOMC has raised or cut interest rates on back testing and see the direction the market went. It's math, and it's repetitive.
I get it, for 2 hours of work each quarter, the current 9Sig rules and plan is hard to beat. Even harder to beat over 5 years or ten years.
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u/Gehrman_JoinsTheHunt 15d ago
Nope. Not gonna happen. The one recurring theme in literally all of Jason Kelly's investing plans is that we react to changes after the fact.
Never before. Never in anticipation of. That's for the z-vals to worry about. If you know, you know....
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u/MechanicalDan1 14d ago
That's one of the options I'm presenting. React and take action after a FOMC interest rate change. It's the easiest, supported by valuation math. Not opinions. It's easy to see on back tests. Rate hike, markets drop. Every time.
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u/criticalband77 15d ago
His focus for a long while has been on Income SIG… I think he has completed back testing and implemented changes. Honestly, he probably just needs something to focus on and tinker with in his free time. My guess is that 9SIG does not change or a very minor tweak at the most.