2023 survey competition is back on Jan 31st!
Get ready.
Dear readers,
in our last blog we left you with our huge announcement. Thank you all for your expressions of support and a special thank you to everyone who expressed genuine interest to invest with us. We already reached out to most of you, and will be in contact with more details shortly.
In the meantime, we are getting ready for our 2023 survey competition. The start date is January 31st. This means that our first quarter of 2023 will last for a total of 9 weeks. The other three quarters will be operational in full (in total, we will trade up to 46 weeks this year: 52 minus 4 from January and 2 more during the Christmas period). The fund will start trading with whatever we have in the account by the time we start the survey (no worries if you can’t jump in yet, it’s an open-ended fund, so there’s plenty of time as on-boarding is continuous).
So before the competition recommences, we wanna fill you in on some of the novelties we are implementing this year.
What’s new in the survey competition?
A few things:
New competition website as of Q2
Q1 2023 will be the final quarter of using our current survey app for the competition. We are in the process of building a new interface; more user friendly and more encouraging for the competition. Hopefully, as of Q2 (April 4th) you will enjoy a new and improved experience. Your Q1 results will be saved and transferred to the annual leaderboard in the new app.
New award structure: the more we make, the more you get!
On that topic, we are introducing a new award structure. We had our new competition manager (himself a user of the survey!) come up with a better and more equitable reward strategy.
First, we are broadening the distribution and awarding the first 20 users each quarter, instead of the first 10. The $5000 quarterly prize is now split across more people, so that more of you can get rewarded for your effort. The $5000 prize pot ($20,000 annual) will surely grow over the years. As we get bigger we will be putting more and more money into our competition.
Second, in addition to encouraging quarterly performance we will also encourage annual consistency and performance. 3% of our fund’s profits (not investor profits, but the profits we take from our 25% performance fee) will be allocated each year to the top 20 performers on the annual leaderboard.
The figure below explains and shows a more equitable distribution while still allowing for one-quarter wonders to take their share of the prize money as well. As you perform better and the fund grows, you will earn more, and annual rewards become a larger share of total rewards.
What’s 3% of a few million? Quite a lot! We want our top performers to be able to take away a few thousand dollars this year. As we grow, so will the prize pot, and so will your earnings. Plus, you’ll get better and better at this :)
Two leaderboards
Obviously this means we will have two leaderboards. A quarterly one, with the fixed $5000 prize pot, and an annual one with 3% from our profits. So don’t despair if you miss out on the top 20 in one quarter. As long as you maintain good performance throughout the year, you are more likely to participate in the annual allocation, which carries a much bigger prize. We might even decide to reward more people by the end of the year - as long as everyone who really made a contribution gets their fair share.
Adding QQQ, removing BTC and TSLA
From our analysis we figured out that you guys performed worse on more volatile assets like BTC and TSLA. Some feedback we received from many of you suggested the same: you would do great on S&P or DJI, and miss BTC and TSLA and get punished for it. We listened and we adapted. BTC and TSLA are out.
Instead, we are now adding QQQ, the Invesco ETF that tracks the NASDAQ-100. Why an ETF and not the index itself? For one, we’ll be trading the ETF directly. Also, the relationship between QQQ and NASDAQ-100 is not as straightforward as with SPY and S&P500 for example (where you just divide the S&P value by 10 to get the SPY value). So it makes more sense to get you guys to start thinking in terms of the actual price levels we will be using.
The indicators are in the following order:
10-year US Treasury bond yield
Dow Jones Index
S&P500
QQQ
VIX
AAPL
We only track your performance and reward you for S&P, DJI, VIX, and QQQ
You won’t be graded based on the 10-year Treasury or AAPL predictions anymore. This doesn’t mean they’re not important; they are - more as a signal to you. Remember, AAPL tends to have a big impact on S&P and the NASDAQ, while the 10YT behaved as an inverse of equity markets throughout last year: a sell-off in bonds (yields go up), was followed by a sell-off in equities. What a year for the 60/40 portfolio, huh?
Punishment points lower
If you missed a week thus far, we would punish you with 1 penalty point (which was rather big given the margins that determined the winners). We are now reducing that to only 0.5 if you miss a week. We still want you to participate at all times, but will punish you less for missing out a week.
Emails: no more Wed signals and no more Thu positioning
Since this is now a fund, we are no longer allowed to send you signals on what we trade. Expect no more emails with the signal on Wednesday, or the blog describing our positioning on Thursday. We will keep sending out the Tuesday email each week, to remind you of the survey, and present the performance of the previous week (precision and accuracy), in addition to having a pro-forma representation of the BASON returns. We can no longer present our actual portfolio performance per asset class. We will, however, give an overview of how the real portfolio and the strategy are doing at the end of each quarter.
Our investors will have all this information. Each of them will receive weekly notifications of how the fund as a whole is performing (through the investor-only portion of this newsletter), and how their individual allocation is holding up (NOTE: these might differ based on when you entered the fund).
That’s it! Everything else stays the same. Survey opens each Tuesday at 8am ET, closes each Wednesday at 8am ET, questions are to predict the Friday close (4pm ET).
Looking forward to restarting this! See you in 10 days.