Mistakes, Milestones, and More
12 months have flown by. A moment to hit pause and look back - my anniversary article. Where do we come from and where do we go?
A warm hello to all new readers! I’m glad you are on board.
New here? I’m Michael and on a mission to make beating the stock market as easy for you as choosing your favorite ice cream. I write an algorithm that does exactly that.
How it all started. The journey so far.
Looking back on this year, it's like we've been through a bit of everything - the mess-ups, the big wins, and all the in-betweens.
Let's dive into this story together, laughing at the bloopers, high-fiving over the victories, and peeking around the corner at what's coming.
Sometimes you just stop and think, “Wow, what a year it’s been”? Well, I’m right there with you, doing a bit of that head-scratching and heart-swelling reflection. From coding bugs and eureka moments to those quiet minutes spent alone pondering over a cup of coffee, it’s been one heck of a trip. I can’t help it, but I get a little excited to share it with you. Mistakes? Made ‘em. Milestones? Hit ‘em. Lessons? Learned a ton. So, settle in, and let’s rewind through the highs and lows that have brought us here.
1. Forecasting? We suck at it.
First up, let’s talk about forecasting. We’re all pretty terrible at it, aren’t we? Think about the stock market - it’s like a wild guess fest! It reminds me of those moments at a traffic light when it suddenly turns yellow, and you’ve gotta make that split-second decision: to brake or to floor it? Or to buy, sell, or hold the stock. Life’s full of these moments.
Some proof of how bad I am at forecasting?
Let’s go back to late 2022. That’s when I began coding my prototype. I was all, “I’ll wrap this up by the end of 2023, easy peasy.” Boy, how wrong I was. Fast forward to early 2024, and there I was, pushing the goalpost to Q1.
Spoiler alert: I was wrong again. Hahaha.
But, you know what? Something else happened. Despite my terrible forecasting skills, the math behind my project kept getting stronger and stronger. The beauty of math - it cuts through the guesswork like a hot knife through butter. In hindsight, I know why - there was just a lot to learn - and that takes time.
New concepts, new approaches to problems, and new bugs to find, at least for me they were new.
It’s now been about a year since I started sharing my journey here with all of you, and wow, what a great ride it’s been! Writing these articles helped me process a lot of what I’ve learned, and even better, I’ve met some amazing people along the way.
So, how about we take a little trip to memory lane and recap chapter 2?
Shall we?
2. Consistency Is Harder Than It Looks
Guess what? This is update #40, and sharp eyes among you might notice - yep, the math doesn’t add up. We should be hitting 52. Busted!
It definitely took a minute or two to find that rhythm of writing weekly, but hey, I got there. Here is why it took me a while to get into the groove.
I’ll confess, I’m more of a “product first” kind of guy, which I know has its drawbacks. The less I share, the slower the growth, but I’m aiming for something solid, instead of talking a lot and taking back a lot.
Why is the radio on low volume, you ask? We’re living in a time where commitments are more like suggestions, and everything feels so non-committal. But honestly? I’m not a fan. I truly believe that taking a different approach and braking cycles leads to different (and hopefully better) outcomes.
Why am I saying this?
On the surface, things are always polished and everybody is smiling. But there were those moments when I was this close to throwing in the towel. Especially in the beginning, it took me a bit to figure out why, but eventually, I hit upon my trigger pattern:
It took some time to realize the issue was simple - not knowing enough—at the moment. In the past, silently complaining about it was just my way of ignoring the real problem, whereas punching my ego in the face and saying yes to the “challenge of learning” is something entirely within our control. We just have to really “get it”.
Remember when I talked about that quote, “The time between trigger and response is in your control”?
That finally became my mantra. Instead of spiraling out of control and searching for a quick release aka shiny objects, I finally managed to change the script in my head.
Instead, I ask myself questions that lead to solutions and keep my focus on track. What don’t you know yet? How can you figure it out?
This shift from a destructive mindset to focusing on solutions has been a game-changer. I already knew this, as many of us already do, but living and feeling it is a fresh pair of shoes.
And for those times when I’m just not feeling it? I have a second secret weapon in my pocket.
3. When Everything Sucks...
We all have those days, right? Here’s the thing about keeping the ball rolling, even when it feels like everything’s against you. When the world seems out to get you, or you’re wrestling with a bug in your code for three straight days, that just won’t quit the fight.
Here are some tricks for those moments.
The simplest one? Just take a walk. Honestly. In 80% of the cases, it helps! Period.
Second: Spoiler alert: It doesn’t help, but hey, it’s an old ritual and it’s just between the two of us, right?
Sometimes, I still vent to my wife about how everything’s going sideways, even though I know it doesn’t help at all. It takes a while for old habits to die out. But I’ve made a pact with my wife! HAHA! When I do it, she asks me questions or suggests going for a walk. The great thing about being aware of your bad habits is that you are in power to outsmart them. Therefore. F*ck off old habits, I’m smarter now.
But there’s this one last strategy that never fails me, and it’s surprisingly straightforward.
If you’re anything like me, chasing after a goal can start to feel a bit... distant. When motivation wanes because that goal seems a million miles away, I head to my bedroom and dive through my journal.
Flipping through those pages brings me right back down to earth. It puts everything into perspective.
It’s a reminder of everything I’ve already “survived”.
Here are some snippets:
2022-07-16: I start learning Python
2022-08-12: Did an early run in the morning and sent my first email with python
2022-09-28: My mom gets diagnosed with cancer
2022-09-29: Rolled my right ankle
2022-09-30: We close our business
2022-10-26: The dishwasher brakes, we need a new one
2022-11-08: Cut a lot of loose ends and focus. Hired a coding mentor
2022-11-09: It took me six hours to find a solution to count strings in Python
2022-11-10: Started coding my first prototype
And then there are the milestones you don’t even realize, like starting the final version of my analysis program for TheValueVantage.com in March 2023.
Looking back, all those moments felt like the end of the world, or that you are the king of the world? But they’re just blips in the rearview mirror now. Every hurdle seems insurmountable until, well, it isn’t. That logic bug that took me three days to find? It turned out to be another turning point for me and my thinking.
The key to getting past most obstacles is usually not out there in the world;
it’s in your head.
If this resonates with you, there’s this book that changed my perspective: “The Gap and the Gain”. The concept is about focusing on what you’ve achieved versus how far you still have to go. Trust me and give it a try.
So, whenever I hit a wall, I reach for these secret weapons. And if I fall into old habits, I outsmart them e.g. my wife starts asking me questions.
These are my go-to strategies for reminding myself to keep pushing, even when it’s rough. And that, my friend, makes you dangerous. Why? Because you’re training your brain to not stop, you become unstoppable.
Now up to the final chapter 4.
4. 11 Lessons Learned
The past 12 months have been a ride. A ride of discoveries, missteps, and many ah-ha moments.
Here are the top golden nuggets I’ve picked up along the way for you:
Always double-check your raw data. It’s like the foundation of a house; if it’s shaky, everything else will be shaky too.
Keep an eye on stock splits. They mess up your analysis if you forget about them.
Make sure your code behaves as expected. If it doesn’t, you’re in for a world of surprises. Even if you think you’ve seen it all.
It’s okay to not understand something... for now. The key word here is “now aka yet.” You’ll get it eventually if you want to understand it.
Trust your gut. If something feels off, chase that feeling down.
Don’t ignore inflation. It’s like a sneaky background character that can impact your calculations in big ways.
Watch out for survivorship bias. Testing your code only on companies that are still around skews your results.
Experiment with multiple strategies. There’s no one-size-fits-all in this game.
Tinker with variations of each strategy. Sometimes, small tweaks can lead to big insights.
Backtesting is not research. Don’t treat data like spaghetti on the wall. Backtesting is a way to see how your math and hypothesis work, not the other way around.
Beware of look-ahead bias. Always run backtests as if you’re traveling through time, but only with the information that was available then.
BONUS TIME: If you’re diving into machine learning, double-check your results with the DSR (Deflated Sharpe Ratio). It’s easy to get fooled by pure luck and chance. And be aware, that some egos will hate the results.
These lessons come from countless face & forehead slaps, and moments of enlightenment. The devil lurks in each detail, and it’s those nitty-gritty bits that can make or break your project and lead to sleepless nights. Ask my wife how often I got out of bed to “just quickly check something”, or to note a thought down.
Behind the Scenes
The work continues.
Progress
I ran my results through the DSR (Deflated Sharpe Ratio) code, and things are looking good. The DSR barely flinched, it dropped by just a little bit, so I’m feeling pretty stoked about the stability of my code. I’m keeping the final numbers under wraps for now because I want to understand a few more details. But, fingers crossed, I should have everything wrapped up by next week.
Oh, and guess what? I stumbled upon a sneaky little bug that was messing with the balance sheet data updates. It’s kind of amazing that even after months of tinkering, these surprises still pop up. But it is what it is - a bug. So here’s what happened: There are super rare cases, when companies don’t report every number in their SEC filings, and this leads to some data being marked as NaN (not a number). Now, if your code is expecting a number and gets NaN instead, it throws a stone in your direction and quits working. I was scratching my head, wondering why my cloud bill was on a diet, but I didn’t connect the dots until I did a local database update.
Turns out, the issue wasn’t with the data itself, but again with my assumption that this scenario couldn’t happen. Hello, Murphy’s Law. Fixing it was a breeze, though. I tweaked the code, and in addition, I’m setting up a summary function that’ll email me after each statement update. This way, I’ll get a heads-up if anything’s off. It’s these little things that keep me on my toes but also make the entire system even more robust.I did some maintenance work here on Substack as well. I’ve sifted through my articles and organized them into three categories. You can find them here.
1. Psychology
2. Stock Stuff
3. TheValueVantage.com
The Plan
Finish my analysis
Enjoy Eastern with my family
What’s on my head
Confidence doesn’t come from affirmations, but from the reps you put in.
Nuggets I’ve enjoyed
Have a great day StockStar!
Hit that heart if you like yourself!
Michael
If you like it, share it, and make somebody happy.
Recommend The Economy Rocket to your readers and friends
I share my stock investment story without sugarcoating – you get the good, the bad, and those tricky ego trips. I'm developing a service with a mix of smart code and proven investment strategies, making stock analysis a thing of the past if you wish. Why? Because life offers so much more beyond the confines of stock analysis.
Disclaimer:
The information in this article is my personal opinion. I’m not a certified investment professional. It is not consulting, nor does it constitute investment recommendations.
I do my research carefully and follow my personal investment strategy.
The stock market is a complex building with its own rules. There are no rules set in stone, like the rules of physics.
Therefore, use the contents of this newsletter at your own risk and do your own research as well. Investing in the stock market can lead to a total loss of the capital invested.