ADX EMA 60 Seconds Strategy for Binary Options -

2 months back at trading (update) and some new questions

Hi all, I posted a thread back a few months ago when I started getting seriously back into trading after 20 years away. I thought I'd post an update with some notes on how I'm progressing. I like to type, so settle in. Maybe it'll help new traders who are exactly where I was 2 months ago, I dunno. Or maybe you'll wonder why you spent 3 minutes reading this. Risk/reward, yo.
I'm trading 5k on TastyWorks. I'm a newcomer to theta positive strategies and have done about two thirds of my overall trades in this style. However, most of my experience in trading in the past has been intraday timeframe oriented chart reading and momentum stuff. I learned almost everything "new" that I'm doing from TastyTrade, /options, /thetagang, and Option Alpha. I've enjoyed the material coming from esinvests YouTube channel quite a bit as well. The theta gang type strategies I've done have been almost entirely around binary event IV contraction (mostly earnings, but not always) and in most cases, capped to about $250 in risk per position.
The raw numbers:
Net PnL : +247
Commissions paid: -155
Fees: -42
Right away what jumps out is something that was indicated by realdeal43 and PapaCharlie9 in my previous thread. This is a tough, grindy way to trade a small account. It reminds me a little bit of when I was rising through the stakes in online poker, playing $2/4 limit holdem. Even if you're a profitable player in that game, beating the rake over the long term is very, very hard. Here, over 3 months of trading a conservative style with mostly defined risk strategies, my commissions are roughly equal to my net PnL. That is just insane, and I don't even think I've been overtrading.
55 trades total, win rate of 60%
22 neutral / other trades
Biggest wins:
Biggest losses:
This is pretty much where I expected to be while learning a bunch of new trading techniques. And no, this is not a large sample size so I have no idea whether or not I can be profitable trading this way (yet). I am heartened by the fact that I seem to be hitting my earnings trades and selling quick spikes in IV (like weed cures Corona day). I'm disheartened that I've went against my principles several times, holding trades for longer than I originally intended, or letting losses mount, believing that I could roll or manage my way out of trouble.
I still feel like I am going against my nature to some degree. My trading in years past was scalping oriented and simple. I was taught that a good trade was right almost immediately. If it went against me, I'd cut it immediately and look for a better entry. This is absolutely nothing like that. A good trade may take weeks to develop. It's been really hard for me to sit through the troughs and it's been even harder to watch an okay profit get taken out by a big swing in delta. Part of me wonders if I am cut out for this style at all and if I shouldn't just take my 5k and start trading micro futures. But that's a different post...
I'll share a couple of my meager learnings:

My new questions :

That's enough of this wall of text for now. If you made it this far, I salute you, because this shit was even longer than my last post.
submitted by bogglor to options [link] [comments]

[Rant] I hate a lot of champions.

Just doing a huge rant on champs that I hate. Let me know if you have any nice tips for playing against them. Champs in each category are generally in order from most hated to least hated.
EDIT: Just a disclaimer: I'm just venting. I didn't mean for anyone to actually take this that seriously. I enjoy the game perfectly fine even if some of these champs end up showing, otherwise I wouldn't be playing. But yeah. Chill out people. I am fully aware there are more than 70 champions on this list, which makes up more than half the roster.
EDIT 2: People are still commenting about how it's ridiculous that I hate "all the champions." Read my disclaimer, peeps. Thanks. I just think they're annoying, and I hate them, not that they're OP. I didn't expect anyone to agree with me or to get any upvotes. Just wrote this because I was bored and wanted to vent.
Edit 3: I’m done replying to people who are taking this post at anything more than face value. Peace.
Edit 4: Also, yes, Jinx is overpowered with all her resets and attack range, but she's by far not the most annoying ADC to play against. Her minuscule banrate reflects that. Maybe I can complain about her ult because you think you've just barely made it out alive but she snipes you last second and you're like "Oh." Overpowered ≠ annoying, and annoying ≠ overpowered. I keep explaining this over and over, lol.
Edit 5: I'm gonna put a checkmark next to champs that I have played before in norms at a decent level just so people aren't like "durrr just play them so you know how to counterplay them!!11one"
Edit 6: I've determined that the League community is just as toxic as ever. Keep ragging on me for being hardstuck silver for 6 years and doxxing me. I don't really care. Also, I've augmented my list with an annoyingness score out of 10, with 5 being average, just so you guys realize it's not binary hatred, but more of a spectrum. I essentially only have champs that have a score of greater than 5 on here, so you can expect with 5 being the average, and annoyingness being on a sort of bellcurve that around half the champions that exist are going to be on this list. That's what people aren't understanding, I guess. I probably should've done that from the start, tbh. My mistake. Also keep in mind that some of the champs on this list are "half" hated, so like only specific build on that champion will I hate, such as AP Shyv, lethality J4, AP Malphite, etc. etc., so those champions on the list should only count as half a champion, which should bring the total down to around 60.
√ Veigar. That cage is huge, and the only way to counterplay it is to either be faster than the animation, sidestep his W if you end up not being able to do so, or flashing out. All of which is extremely difficult. He's especially annoying in lane when he can zone you off minions and also make it 10 times easier for the ADC to land a skillshot. Still have nightmares about Ezreal Veigar. Late in the game, if you end up getting stunned, you're basically dead for sure because of his 1000 AP. It's a race against time. 8.5/10.
√ Xerath. So. Much. Damage. Honestly, I think he's just Brand but with just harder to avoid abilities and even more damage (before the Brand passive anyway). Ugh. 8/10.
Karma. Level 1 empowered Q does 25% of your HP and slows. It's so, so, so unbelievably stupid. The MS boost and insane shielding is even more ridiculous. It's impossible to dodge her stuff too. 8/10.
√ Vel'Koz. Another Brand/Xerath-like support. Just insane damage and CC. The Q is especially annoying because you have to think in two dimensions rather than just one, and it slows and chunks a quarter of your HP. 8/10.
√ Full AP Malphite. Ult is basically just an instant kill with no real counterplay besides flashing. You can build MR, but ADCs only have Maw, PD, and QSS for that. Wit's End is a waste 99% of the time. 8/10.
√ Lux, a good one at least. That Q is easy to dodge, but when she does land it, she can do a full combo for your entire HP bar. It was even more annoying when Aftershock shield support Lux was better. Used to be my permaban for that patch. 7.5/10
√ Brand. So much raw damage and he doesn't even need to build items for it. His W just chunks out half your HP, and then his passive burns you for the other half. Just really painful to play against. 7.5/10.
√ Zilean. His ult essentially adds a sixth player to the game and I really hate it when he cucks me from a kill because of it. At least I can E the reviving person, but it's not always feasible. His bombs also do an insane amount of damage in lane if he's good and can land them. His speed boost makes his allies go 1 million miles per hour, which makes it extremely hard to do anything. 7.5/10.
Vladimir. I don't understand his kit at all. All I know is that he has insane innate healing, insane burst, and a stupid blood pool that negates literally everything. I can't stand the guy. His late game is also insanely strong. 7/10.
AP Shyvana. Those dragon form Es HURT A LOT. There isn't much counterplay to being oneshotted. 7/10.
Kennen. He's insanely fast, and literally the only counterplay to his ult is flashing or QSS. Even with QSS, if he's too close to you, the damage is still gonna affect you and you're gonna die to it regardless. 7/10.
√ Fiddle. The silence is really annoying, obviously. Especially as support. The ult is also really annoying because if you don't have a bush warded, he can pop out of nowhere and you're basically dead. Still mostly manageable, but just REALLY annoying. 7/10.
√ Swain. I can't dodge his root thing no matter how hard I try. It's so weird and unnatural. Probably needs some practice, but regardless, it's insanely annoying. I also hate his insane lifesteal during his ult. He's basically unkillable before you have grievous wounds. The recent changes have made him nigh overpowered. Edit: I just did some target practice with a Swain main friend, so that helped a little. I still don't like it. 6.5/10.
√ Kassadin. Ever since that insane buff from a while ago, he's able to carry games singlehandedly once he reaches late game. And I don't like playing him either. Just another race-against-time champ. 6/10.
√ Zyra. Has a lot of free damage with her plants, and you can't do much about it because if you auto the plants, then it detracts from csing. It's really annoying, but the damage still is somewhat manageable, and her stuff is dodgeable. 6/10.
√ Twisted Fate. He can just TP to anywhere on the map with a gold card up, and you die because it's a point and click guaranteed stun. So irritating. But definitely not that overpowered. 6/10.
Malzahar. Space aids and voidlings do way too much free damage. The silence is annoying. The ult is obviously the worst part, but at least that's counterable with QSS. Ugh. 6/10.
√ Kayle. She's basically not a champion until level 11, and then she just ends up carrying the game no matter what. I know she's getting a miniature rework on PBE, so hopefully that makes her better, but honestly it's just basically a race against time and statchecking. 5/10.
√ Ahri. She can be annoying her with charm. It's a big game changer because it basically lasts forever and she gets bonus damage as well, so you basically insta-die. 5/10.
√ Heimerdinger. Why are his turrets so hard to kill? They literally take like 4 autos. Why. He also ends up having 150 armor naturally for some reason. Just annoying. 5/10.
Teemo. Classic hatred. He's very anti-ADC with his blind, and random shrooms that chunk out 40% of your HP. Plus, his ability to just go invisible after like a millisecond of being in bush makes it even harder to kill him. Thankfully, he doesn't provide must value to the team other than just serving as a tilt mechanism. 5/10.
√ Lulu. Polymorph is annoying, but it doesn't last that long. My real gripe is with shields. I hate shields. About to kill someone? Nope, he has a 300 HP shield suddenly. So annoying. 6/10.
√ A good Soraka. Her Q slows so much and heals her for such a ridiculous amount. I don't know how some people are able to land it so well. 5/10.
√ Shadow Assassin Kayn. My God. Even when he's not transformed, he can gank from wherever he wants, and you can't even ward against him because the spots are too far away and you can get caught, and even if you do it and then see him, it doesn't even matter because he walks through the wall and gets +100 MS, which you can't possibly outrun. And if you get camped? It's basically over. He gets transformation and you're basically permanently erased from the game because +200 MS from walls and then the W slow + his ability to move during it. Jesus. Current permaban. 11/10.
Rengar. Inevitably, he'll get to a point where he can hop from a bush, press Q, and insta-kill anyone. He can just come out of nowhere, too. His ult gives free armor pen so building armor means absolutely nothing. Gray health is aids too. He ALWAYS gets fed too with like a 20+ KDA. I'll say that based off some complaints that he requires a little more timing and skill than I'd previously thought, but I'll have to determine that myself later. 10/10.
√ Hecarim. Really, really annoying. At least he got somewhat nerfed, but man, he can just camp a lane and instakill over and over because of his insane movement speed and his ult which has an insanely long fear. Plus he can push you and get you out of position. Used to be a permaban. 9/10.
Shaco. Dude just pops out of nowhere from a backwards flank while you're just minding your own business and instakilsl you. Control wards aren't enough. 9/10.
√ Talon. He's thankfully not that popular, but there was one week a couple weeks ago where I saw him almost every game and he'd get fed every single time. Dude can legit just hop over walls willy nilly and has the same playstyle as Kayn but requires even less skill somehow. You just press WQ and instantly kill anyone. 9/10.
√ Nocturne. Dude can just press R and instantly TP to you and kill you by autoattacking you to death. Not much more needs to be said. Thankfully he's not as strong as he once was, but still. 8/10.
√ LeBlanc. Honestly, they should've just kept her rework. I don't know why we need yet another generic AP burst assassin in this game. I mean, she's gotten pretty manageable, but when she first got reverted, she was insanely ridiculous. 7.5/10.
√ Ekko. Dude's super slippery and his ult makes him basically impossible to kill. He's not that popular, though, and not that OP either, but just REALLY annoying. 7/10.
Full lethality Jarvan. This dude can straight up oneshot you with ult. If you don't get oneshotted, then you still basically are dead because there's no way to get out of it besides flash. 6/10.
Lee Sin. Ironically, not that he's annoying to play against, but that I hate having him on my team. The Lee usually ends up taking literally all the kills early game, leaving none of the actual carries, and then he falls off 20 minutes in, starts endlessly dying because he thinks he's still relevant, and then we wonder why we lose. 7/10 on my team, 5/10 on enemy team.
Kha'Zix. Generic AD assassin that doesn't really require much skill expression. Basically Rengar 2.0 but less damage. Idk why he exists. 6/10.
Hook supports:
Basically all of them, with heavy emphasis on √ Pyke and √ Blitzcrank and Nautilus. Their counter is to just sit behind minions, but those three can just walk through them and hook anyway. It's so stupid. Even if they don't, they just have to be lucky and hit ONE skillshot (even if they miss 10 in a row) and get a double kill. Blitz and Naut's hooks are also extremely fast and hard to sidestep. The recent buff that Pyke got also just makes him incredibly snowbally and ridiculous. Why does he get double gold??? Plus his passive that gives him free health and makes him super slippery. God. He used to be my permaban till I kind of got used to him and realized that Kayn is worse. Naut's hitbox is also needlessly wide, and it seems to prioritize champs instead of what the anchor hits first. I don't understand. The lollipopping effect is also really stupid.
Thresh: 7/10. Blitz: 10/10. Pyke: 11/10. Naut: 9/10.
√ Draven. This guy would definitely be my permaban if he were more popular. He just gets so much free stuff. He needs to perform a basic part of his kit (catching axes) and he gets overrewarded with it by essentially getting 450 gold off every kill rather than just 300. I don't understand. His autos also do like a quarter of your HP, and slightly misstepping is basically a death sentence. Your hope is just poke him from him trying to catch axes. Literally, your win condition is to not die even a single time, including your sh**ty autofilled support whom you have no control over, because once he gets even a single kill, he snowballs out of control. Two kills and the game is over. It's a race to see who makes the first mistake. Either he dies first, or you die first. I've come to learn to play against his playstyle by basically just letting him win lane and making sure he doesn't cash in any kills, and hopefully my jungler can kill him and make him lose his stacks. But usually either my support plays overaggressive or their jungler ganks and I'm overextended. He's just a ridiculous snowball feast-or-famine champion. So stupid. 10/10.
√ Tristana. She has SO MUCH free bullsh*t in her kit. Free waveclear, free ins, free outs, two forms of self-peel, strong all game, really long range, deletes towers. It doesn't matter if she's mispositioned AT ALL. She can be derping around and not paying attention to her support engage, and just hop in when her brain finally turns on, get a double kill, then hop out. Basically an assassin. I really hate her. 10/10.
√ Twitch. I legit just don't know how to play against this dude. Control wards are supposed to counter his invisibility, but in this season (well in prior seasons too), my inventory gets filled up with so much garbage that I can't. He just pops out of nowhere, gets insane attack speed, and instakills me because I'm mispositioned. Especially lategame where he can just pop up with his ult and 1v5. Wtf? He spikes way too hard off his two core items, as well. 10/10.
√ Jhin. His W is one of the most annoying abilities in this game. The support just needs to auto once, he lands his W which passes through minions and has infinite range for some reason, and then the support can finish the CC chain, or he can walk up and crit you for 1 million damage. Late game his crits are amazingly huge and he can run at 1 million miles per hour which makes him annoyingly slippery even though he's supposed to be "immobile." He used to be my permaban. 9.5/10.
√ Ashe. Long range and permaslow. Basically if you get autoattacked once you're dead if you don't flash because you just get autoed to death thanks to her Q and probably her support CCing you shortly after. 8/10.
√ Ezreal. He's not super strong right now, and I usually end up pooping on him, but he's so effing slippery. I hate it. He can just Arcane Shift out of everything. He throws out Qs which chunk your HP AND give him free gold with klepto, and on top of that, the WQ combo takes out at least 30% of your HP every single time. Really high annoying factor, but not really overpowered. 7.5/10.
√ Lucian. One slight misstep and he combos you for half your HP. He's been pretty bad since he got hard nerfed, but still super strong in the laning phase with the right support. I really hate playing against him. At least I've learned to properly position a little. 7/10.
√ Sivir. The spellshield is incredibly annoying and probably the only skilled part of her kit. She feels so boring to play as and against. 6.5/10.
√ Xayah. She is basically an assassin with how much damage she's able to output. Sure, I outrange her, but real annoying even if she's just even. 6/10.
√ Vayne. She's traditionally been a champ where I see her get picked and go "lul easy lane," however, I don't know what happened lately, but suddenly all the Vayne mains I've seen suddenly gained 200 IQ and actually dodge stuff, condemn correctly, and make plays. Late game too, she just deletes tanks because it's impossible to itemize against her. But yeah, if she's a bad Vayne she's pretty easy. Depends a lot on the support as well. 5.5/10.
√ Kog'Maw. He powerspikes really hard with items and ALWAYS scales. His laning phase is also not even bad either. I feel like I always lose lane against him and then he never ends up falling off because his range is insane and he shreds armor and stuff. He's definitely not that overpowered, though. Just really annoying. 5.5/10.
√ Tryndamere. God. I really hate this guy. I don't know why he doesn't get a rework already. He's so clunky and boring to play. If he's fed, he can just dive into the backline with E, get a triple kill, then walk away scot free because of his dumb retarded ult. There's no counterplay to him other than rooting while his ult is in effect, but you're most definitely already dead by that point because he's already E'd into you, killed you in 2 autos, then E'd back out with ult running. Even if he's behind, he can just splitpush all game and create priority. You basically have to keep one person on each lane otherwise he WILL end the game by himself. And if someone follows his splitpush he can just run away with E and ult. F**k this guy. One of the most unfun champs. He'd be my permaban, but he's not usually the one preventing my win. Just extremely unfun. 10/10.
√ Jax. The basic antithesis of ADC. His E is the most ridiculous part of his kit. He has insane mobility with his hop, so he can just dodge all your autos, hop to you, press E again to do an AOE stun (???), and you're basically gone. His ult also makes him impossibly tanky. If he doesn't wanna teamfight, he also has the option of going the singleplayer route and just splitpushing like Tryndamere. So annoying. 9.5/10.
√ Darius. Always gets fed toplane because people like to whack each other with auto attacks at top instead of doing efficient trades. While Darius just autos and gets his passive off and then ults, hooks, cripples, etc. etc. me later on because he's 20/0. Insanely fast with phage + ghost. Ugh. At least he's somewhat kitable. My experience playing toplane against him has also been terrible, so I feel the pain. 8.5/10.
Mordekaiser. He just ALWAYS gets fed no matter what. And I know why; it's because he's really overtuned. But then I have to deal with it when he ults me and then I lose the 1v1 because one Q chunks half my HP. 8.5/10.
√ Garen. If he gets fed and is smart and goes tanky, he's basically literally impossible to kill because of his flat damage reduction. He silences, he speeds himself up, still does damage because his Q does a lot and his ult does true damage + extra vs. the villain. I really hate him. He can splitpush hard too. If the trend isn't clear to you by now, I really hate splitpushing as a strategy in general. 8.5/10.
Volibear. He can just run at you at a million miles per hour, throw you over, slow you, and then auto you and bite you to death while he heals. Extremely overloaded. 8/10.
√ Gangplank. Basically another one of those ticking timebomb champions. Once his barrels start doing true damage, it's basically over because on top of slowing you by 90%, they also delete 90% of your HP too and there's absolutely nothing you can do to itemize against it. All you can do is hope you can auto the barrels fast enough. 7.5/10.
Trundle. Generic splitpusher with stupid high innate lifesteal. Boring. 7/10.
Yasuo. Classic hatred. He can be irrelevant all game, but still catch up later on because of his dumb double crit powerspike. His tornado is hard to dodge, his windwall blocks everything, and he has nigh infinite dashes so he can just walk up to you and land the tornado so you can't sidestep it. His ult does insane damage and has armor pen. But that's beating a dead horse. 7/10.
√ Udyr. He just has so much DPS with PtA, and can rush in with Bear Form and stun you, then go to Tiger Form and auto you to death super fast. Really low skill expression. 6/10.
Renekton. Dashes everywhere, AoE stun, insane innate lifesteal, etc. etc. He always ends up getting fed and then diving me and I instadie. 6/10.
√ Illaoi. Just because people don't effing know how to play against her so I end up having to deal with her. She's pretty simple, but when she gets fed she's unbearable. 6/10.
√ Nasus. He's usually manageable until he gets late game and then carries the game because he was able to freefarm and get 1000 stacks so he can just delete towers. The wither is also pretty aids. But I generally don't die to him since he's pretty easy to kite. He's just one of those race-against-time champs. 6/10.
√ Riven. Mostly just really annoying and slippery. Dashes, stuns, and shields up the wazoo. But definitely not that overpowered. 5/10.
Cho'Gath. You straight up need 5 items to be able to kill him reliably (crit + LDR + botrk), and it's nigh impossible to get that far into the game. Even then, he still has nearly 8000 HP, and he can just flash ult you and do 1500 true damage point and click. It's so unbelievably stupid. 9/10.
√ Rammus. The taunt, built-in thornmail, and damage reduction are just really anti-ADC and you basically kill yourself by attacking him. He can just come in at a million miles per hour, bump into you to knock up, taunt you, and you're basically dead because he bursts you despite being a "tank." 9/10.
Zac. He can just hop from a bush and knock you up with his E and you can't do much about it. He also does a lot of damage for being a tank. 8/10.
√ Leona. If they have ANY type of engage on their ADC, it's basically a free botlane. Her level 6 powerspike is just too strong against my squishy immobile Jinx booty. Her E is really wide and basically not side-steppable, and following that up with a Q and ult? Absolutely terrible. 8/10.
Amumu. The hitbox on his bandage toss is insanely forgiving, and his ult is huge for an AoE stun. At least you can QSS it pretty easily. 7.5/10.
Sion. Why are you able to Q from a bush invisibly? It's really dumb. I mean, you can be smart and ward and all, but it's just annoying. Plus, that ult + Q stun lasts forever. 5.5/10.
Singed. What does this champion even do? Literally nothing. He's just like Teemo in that he doesn't provide value to the team and just exists to annoy people, while also doing less. I mean, yeah, he's pretty useful in that he can misposition the ADC, but I absolutely hate having Singeds and Teemos on my team. 7/10 when on my team, 3.5/10 on enemy team.
Aaaaaaaaaaand that's pretty much it. Looking back at the list, I can deduce that I really hate champions that pop out of nowhere, AoE stuns, dashes/slipperiness, shields, innate healing, huge poke, invisible spells, insane damage, time/level-gated mechanics, solo pushers, and damage reduction. I dunno if anyone cares but I've been wanting to compile a list like this for a while, anyway. Feel free to discuss.
submitted by Chuck67322 to leagueofjinx [link] [comments]

[Steam] Winter Sale- Hidden Gems II; The Eleventh Hour

Personal Note: If you found any other hidden gems, or just have something to say, say it in the comments! It's the eleventh hour and people can actually hear you now!

Inspired somewhat by the recent post of Hidden Gems, I found that it's largely become completely congested. As such, I'll coalesce a lot of the deals posted by the guys there here, instead. I'll add others in case I find any of them in the original thread.
Personal Favorites
Puzzle Games found by crabbit
Random picks by ND1Razor
Unusual Games found by thelazyreader2015
RPGs loved by thelazyreader2015
Games Thrice Reposted by ParanoidAndroid1309
strikan33 posts the base list
With some other titles, Art4dinner recommends:
Gramis Silently slides:
A small list by thinkforaminute
Story rich, atmospheric game dragged into the light by BabyMustache
Less than a quid by Dux0r
A list of openish world RPGS from thelazyreader2015
Wishlist and personal favorites from gpt999
Misc Recommendations
With the large quantity of the old deals posted, I'd love to see any other hidden gems there might be out there. I'll post the two major things from the previous thread (The massive posts on Coop games and the massive post on games less than three dollars) below, and I'll post any other collections or mild reccomendations I find above.
submitted by Ullyses_R_Martinez to GameDeals [link] [comments]

An in-depth review of the "Ghost Mode" gameplay overhaul mod

As I'm sure you can all relate, the 10th Witcher Games Anniversary video brought a lot of feels. And with them came the itch to do yet another playthrough of my favourite video game. This time, to freshen up the experience, I decided to break from my tradition of only installing visual enhancement mods and look into the gameplay overhauls recommended on the sub.
To my surprise in-depth assessments of these mods were nowhere to be found. True you can look up detailed descriptions of what they change, but that won't give you an impression of how the changes work in practice nor an objective look at how they impact the overall experience. Thus the goal of this thread is to help you decide if you would enjoy using "Ghost Mode" for your next playthrough and to serve as a resource for posterity.
Note: the title of this post is no misnomer. This is a long read. If you already have an idea of what the mod is about and are just wondering "if it's any good", then feel free to skip to the TLDR rating section at the bottom.


First thing first, all the changes introduced by the mod remain true to the vanilla feel, flow and story of the game. There is no need to worry that the game you know and love will suddenly be unrecognisable, that you won't know your arse from your elbow. Secondly, I do not plan to rehash the full changelog in this review. Changes from Vanilla will only be mentioned if they are relevant to the point I am making.
Dsiclaimer: this review is written with the above in mind. I do not claim my experience to be completely exhaustive. For example, things which were difficult or annoying for my setup might be trivial for others and vice versa. Your mileage may vary.

General Gameplay

The mod has been implemented in a competent way. I did not notice any performance decrease compared to Vanilla and encountered no game breaking bugs. There was only a single major issue in 2.6 which was repeatable and highly annoying, but thankfully it seems to be fully fixed with version 2.7.
Immersion has been improved and the game world is more believable. Some examples:

Quests and Experience

The way the experience penalty works has also been changed. Previously you would get 100% of quest experience if you were at most 5 levels above the quest level, and basically 0% if you were 6 levels above or more. Now for every level you are above a quest the experience reward is reduced by 16%. This also works the other way around, you will receive an experience bonus for doing quests which are higher level than you.
This way you get the best of both worlds. You get to tailor the quest order to your liking, without having to suffer meta-gaming pressure, and at the same time Geralt will not end up overlevelled.


This is usually the number one reason why people recommend this mod and it is clear to see why. The author has implemented a great number of improvements to nearly all of the vanilla systems. Combat is more challenging and rewards players for their skill and preparation better. Geralt's overpowered traits and abilities have been toned down and your specialisation makes a much bigger difference to how you approach fights.
Overall, most battles are more fun with GM compared to vanilla. However this comes at a cost: namely the "realism", feel and flow of combat have all decreased to facilitate the above. Let's examine the 4 main areas where GM changes combat and evaluate them in detail.

Enemy behaviour

The first thing you will probably notice is that "all enemies have a reduced reaction time". The reason I put quotes around that phrase is because I don't know the actual inner workings of the mod and precisely how it has modified the AI scripts. Therefore I am just calling the effect as I saw and experienced it during my playthrough. The easiest way to describe it is: the time frame between you being in range of an enemy and the enemy starting their action is now much lower.
The primary effect of this change is an increase in difficulty. You now have to have faster reflexes in order to be able to dodge enemy attacks. Additionally, enemies will spend significantly less time in a hit recovery state after you land a blow. Which means that you won't be able to chain as many attacks as you could before, since your enemy will dodge/retaliate much more rapidly.
This change really shines when it comes to boss fights. The faster enemy reaction time forces you to play by the boss' rules and pay attention to their mechanics, rather than treating them as a higher health & damage generic enemy. To give a concrete example, let us look at the Olgierd fight at the burning manor.
In Vanilla you can easily beat him on Death March by ignoring the fight's mechanics. You simply position yourself slightly outside of his melee range and start a rend which he walks into. Then you follow this up with a quick dodge to the side to avoid the sand in the eyes and immediately start another rend. The boss gets locked in the above AI loop and you win pretty easily. The reduced reaction time in Ghost Mode counters this perfectly. By the time you are winding up your rend the boss, instead of walking into your sword, starts his own attack which targets where you will be after you swing and hits you before you can deal any damage.
So to beat him I had to actually play by the rules, which means conventional sword swinging is out of the question, especially as you also leave yourself open to a quick counter attack which kills you in 2-3 hits. The rules in this case are: counter his attack, swing once and go on the defensive. There are three different attacks he throws at you:
  • The red charge: when you are far away from him, it is the easiest to counter and the bare minimum required to win. If you can only counter this then you will win, but it will take ages.
  • The phase charge: is when he turns semi transparent and steps side to side. He only does this if your are slightly outside of melee range, so you have much less margin of error on your counter. If you are quick enough you can counter this type of attack with a close to 100% success rate, which means that a better player can defeat him much more rapidly.
  • Finally we have the slash combo, which he does when you are in melee range. This one is also counterable, but the reaction time is so small I didn't feel it was worth the risk. Especially because if you fail it and only parry you will be locked in that stance for a few of his hits which will drain your stamina significantly (and you cannot counter without stamina, but more on this topic later).
So as you can see from the above GM makes you pay attention to the intended mechanics and rewards skilled play.
The change to reaction time also has its downsides however, and they are major ones. Most notably, enemies which have extremely fast attack animations by default become unfair in melee combat. Especially if they are in a group. The best example of this problem are all of the insectoid type enemies like the endregas and the kikimores. Their attack animation is fast and when you pair it with an increased aggression and run speed it means that you literally cannot attack them preemptively. If you start any type of attack (without dodging one of their attacks or parrying first) they will strike you first, even if you were outside of their melee range when you initiated your swing. As you can probably tell fighting groups of these enemies is extremely annoying especially early on. Later you can cheese them by unloading your entire reserve of Dancing Stars & Northern wind bombs for some semblance of crowd control, but even that is like putting a plaster on an amputated leg. What's strange is that looking at past feedback numerous people have complained about these enemies, throughout the mod's life cycle. Yet the author has failed to address the problem, which is that they shouldn't have reduced reaction time in the first place. Such empty difficulty, only for its own sake is never good.
Another downside is that early on you cannot take on groups of certain enemies, like wraiths, nekkers or insectoids for example, without resorting to AI abuse. This probably only applies to the higher difficulties, but when the best way of beating groups in the early game is dragging enemies one by one to the edge of their AI leash it doesn't feel good. No matter how skilled you are in melee combat you cannot defeat such packs head on without numerous deaths, which doesn't make you feel like a witcher at all in those encounters.
Finally, GM also implements monster "dodge" with a much more heavy handed approach compared to Vanilla. All sorts of enemies will now dodge your attacks more frequently. This is yet another example of where combat quality was sacrificed in order to increase combat difficulty. I write "dodge" in quotation marks because normally the word implies that the enemy sees your attack and reacts to it by getting out of the way. This mod makes the enemies which "dodge" the most feel like blatant AI bots with rigid if-then logic in their script, which harms immersion. Some examples:
  • Enemies dodging mid attack, when it makes no sense for them to do so
  • Werewolves dodging while airborne in the middle of their lunge
  • Humans dodging attacks that come from behind them and they cannot see
  • Shrieker glitching into its "on the ground" dodge animation while flying, after being shot with a crossbow
  • Occasionally enemies dodging attacks while burning, sirens dodging when knocked down etc.

Skill Balance changes

A lot of adjustments have been made to the skill tree in order to improve how balanced Geralt is in combat. The changes can mostly be summed up by saying "baseline Geralt was nerfed". What that means in practice is that witchering aspects you do not invest points into will be significantly worse compared to vanilla. For example the signs, crossbow and damage bombs are a lot less useful for my mainly sword focused build. This is a good thing as specialisation encourages more diversity in your playstyle. Here are some examples:
  • Quen no longer always blocks at least 1 attack, regardless of how much damage it's supposed to absorb. Now it's no longer the combat crutch it used to be in Vanilla as it will only absorb the value of the shield and the rest of the damage will go through.
  • Poison and bleed effects are no longer extremely overpowered boss monster killers. Their duration and damage are significantly reduced to the point where 1 poison application is equal to about 2 additional sword attacks. Still good, but now balanced.
  • Crossbow & Bombs now only deal half damage if they were auto aimed. And of course manual aiming during combat is way too slow unless you have invested into the related skills. There seem to be a few minor bugs related to these items. For example manual crossbow shots sometimes don't bring big flyers down despite hitting them successfully. Superior Samum, manually aimed, dealing 5 (yes five) damage on kikimores.
  • In general overpowered skills have been nerfed (rend, whirl, euphoria etc.) while underpowered abilities have been buffed (crippling strikes, undying, counter attack etc.).
Overall the skill tree feels significantly more polished and we now have a lot more viable choices to pick from.

Defensive techniques (dodge, roll, counter, parry)

The way dodging and rolling worked in Vanilla was a simple binary check. Did you press the appropriate button before the attack connected with your character? If yes then avoid all damage, regardless of where your character ended up going (for attacks which can be dodged). And while this was still a big improvement from the second game, the i-frames were way too generous and the moves lacked any stamina cost. Which made it all to easy to just spam the dodge button and be invulnerable. GM changes this behaviour by also taking into account the direction Geralt moves in when dodging/rolling with respect to the enemy attack. Now if you dodge in time but still end up connecting with the attack, depending on the angle, you will take partial damage and debuffs based on what direction you were going in.
Parrying and countering have been significantly enhanced compared to the base game. Essentially now you can parry/counter nearly all attacks, those coming from monsters included. Taking counters as an example, you may counter light attacks just like before - by reducing all incoming damage - but now you retaliate against monsters with a "counter slash". This also applies to heavy attacks (including hammer and spear wielding humans) except that damage is reduced only by 50%. Both parry and counter now have a stamina cost depending on the attack you have deflected. This is a great addition to the game in my opinion. It plays perfectly with the risk and reward scale. Countering carries a greater reward because you spend your time negating the monster attack and dealing damage on your own, instead of just negating as you would with a dodge. However the risk is also greater because you confusing monster light and heavy attacks means you will take significant damage, especially if your build is not prepared for it. Yet another gameplay element where skill is rewarded.

Armour, stamina and different playstyles

Stamina management is now a big part of combat, rather than a mere afterthought with Tawny oil. The base regeneration rate is significantly reduced, all combat actions pause this regeneration for a short while and counter and parry stamina costs are increased. The armour you are wearing now also affects your stamina more than the Vanilla regeneration penalties. Light armour has no penalties and increases stamina regen, medium armour introduces a stamina cost for rolling & sprinting and heavy armour has stamina costs associated with rolling, dodging and sprinting.
Armour now plays a much bigger role in the game thanks to its significantly increased damage absorption capabilities. Plenty of enemies now have high armour values which also makes the armour penetration stat on swords better. To help with this, your heavy attacks now have a significant amount of armour penetration by default. This means that quick attack spam is no longer maximum dps against all enemy types and you will have to mix in heavy attacks much more frequently. Some enemies like golems are so heavily armoured that using quick attacks against them is basically pointless. Similarly, high armour values on your gear now make a big dent in the incoming damage whereas in Vanilla they were useless and the only thing that mattered were the resistances on the gear.
Both of these changes together translate into very distinct melee combat playstyles depending on which Witcher set you are wearing, which is one of the best features of GM for me.
  • Light Armour: the Cat set provides the combat experience which is closest to Vanilla DM, with a few important tweaks. Firstly, because you have very little damage reduction, Quen is practically useless. It won't even fully absorb a light attack from a drowner. This combined with the change to the defensive techniques means that you actually have to be quick on your feet and good at dodging, you can only rely on your own skill. Secondly you can also mix in counters for increased dps once you are familiar with the attack patterns of the enemies. However you still have to dodge heavy attacks due to your lack of defence. This makes the Feline armour playstyle a skillful dance combining counters & dodging which is extremely fun, especially against bosses and small enemy groups.
  • Medium Armour: the Wolf set is a bit of a jack of all trades, master of none. It has less damage compared to the Cat but more defensive stats and armour. This essentially means that your playstyle is similar to the Cat but you reduce some of the risk and settle for a lesser reward. You still can't afford to counter heavy attacks, but at the same time the stamina penalties for sprinting and rolling are mostly irrelevant as the latter is only necessary to get out of the way of enemy AoE attacks. As a result you will be safer against large groups compared to the cat but will have to settle for reduced offensive capabilities.
  • Heavy Armour: the Bear set in GM presents a markedly different combat experience compared to vanilla. The quickest way to describe it is as an "immovable object". The stamina cost for dodging means that you will spend all of your time holding your ground and countering ALL enemy attacks (apart from AoE). The high armour value and damage resists mean that you can shrug off heavy attacks with ease. Combine this with talents that use adrenaline to heal you and an Ekkimara decoction to create a true tank build. However, due to the slow stamina regeneration signs are pretty much out of the question because every sign costs 10+ counter attacks leading to a big dps loss. This playstyle is extremely fun against groups of enemies because it allows you to combine defense with offense and simultaneously negate enemy damage. It also has its weaknesses - namely big enemies and bosses who make heavy use of area effect attacks, such as Griffins and Imlerith for example. Overall I didn't spend much time testing this playstyle in my run, but I found it very satisfying and fun. Definitely keen on using it for a complete playthrough in the future.
Another highlight of the GM combat enhancements are the 1v1 fist fights (seriously). They are much more challenging, fun and skill intensive due to the reworked stamina system. In Vanilla these were pretty formulaic - keep your distance from the opponent so that they only lunge with a heavy attack, which is easier to counter compared to the fast jabs. Counter it, throw a one-two and then rinse and repeat. In Ghost Mode you no longer have the stamina to consecutively counter all attacks and must spend some time in between counters to recover, which introduces a great deal of tension and makes the fights more skillful. Remember, dodging pauses your stamina regeneration so you don't have an easy way around this. Especially as many arenas are quite small which make this process challenging. Furthermore blocking jabs costs significantly less stamina, so if you're confident in countering the opponent's fast attacks you have a great opportunity to skill display. In addition group fist fights are a lot easier compared to Vanilla, because the opponents aren't health sponges. This is another great change in my book as those were pretty tedious and the fist fight system doesn't really work great for group combat.
Finally, to finish off this section, I would like to spend some time looking at enemy balance in the Blood & Wine expansion. There were several problems with it in my opinion, which overall decrease the quality of the experience.
  • Giant centipedes deal too much damage. Yes they are generally easy to avoid, however them one shotting a character in master crafted Feline Gear + Quen + Superior Insect Oil + Protective Coating + 600 hp green mutagen at full life seems excessive. I'd suggest a 30% damage nerf. For comparison, level appropriate Giant Centipedes hit harder than red skull cyclopses and werewolves.
  • High concentration of monsters which work badly with the reduced reaction times due to their instant attacks.
  • Arachnomorph damage seems to be balanced against them hitting you once when most of the time they double tap you, which enables 1 small spider to pretty much instantly kill you from full life if you make a mistake. Damage should be reduced by at least 40%.
  • The two Guardian Panthers in the Professor Moreau quest are extremely overtuned for when you face them and, as a consequence, require extremely cheesy strategies to beat.
  • Alps are probably the hardest enemies in the whole game. Thankfully you only have to fight them twice. The first one's alone and she's manageable, but the second involves you getting tag-teamed by a Bruxa as well and that one is quite painful. It's a good thing Dettlaff can mind control other "lesser" vampires, because otherwise one of those ginger vamps would easily wipe the floor with both him & Regis at the same time.

Items and crafting

  • Witcher set bonuses now scale with the number of pieces equipped rather than being binary. Bonuses also apply from the lowest set tier and not just Grandmaster level. This is a good change in my book as they diversify your combat style from an earlier stage of the game. Set swords are no longer the best weapons for their level requirement, so exploring the world and doing contracts for relics feels much more rewarding.
  • The weapon & armour upgrade kits, sold by master craftsmen, are a great addition to the game. They allow you to increase the base damage/armour of your equipment by increasing its level requirement by 1 (i.e. the Aerondight effect). This enables you to make use of those special relic swords like: Hjalmar's Steel Sword, Pang of Conscience, Blade of the Bits, Winter's Blade etc. from the moment you obtain them to as long as you wish. This means that you must only pick a weapon based on if its secondary stats have synergy with your build, and this opens up a lot of choices and min-maxing.
  • Speaking of special relic swords, these now have significantly improved secondary stats which makes them stand out from the generic random relics. Depending on your build you will probably end up using one of these for most of your playthrough. It feels great to get a "special" sword reward for a quest which is actually useful and not vendor fodder like in Vanilla.
  • Equipment crafting now requires significantly less materials, so you are no longer forced to dismantle an entire army's worth of arsenal to craft something. Unfortunately the craftsmen will now rip you off much harder, comparatively to Vanilla, with their fees. So if you want to unlock all the levels of the Runewright and deck out Corvo Bianco in the various Witcher sets you will still have to pick up and vendor massive amounts of loot.
  • Crafting costs of random weapons in the early game, before you can access sets and contract relics, are prohibitively expensive.
  • White Gull isn't so difficult to produce anymore as it doesn't require Redanian Herbal and you can craft the Mandrake Cordial yourself, white honey now comes with more charges - both are nice QoL changes.
  • Potions and bombs require significantly less ingredients, so theoretically you would need to spend less time picking flowers. However considering that you could buy most of these cheaply from herbalists in the vanilla game (and still can) this change is more or less irrelevant in practice.
Cooking recipes are a good addition to the immersion in my experience. A witcher on the path should be able to cook himself a meal while squatting in some untamed wilderness. Unfortunately, in practice I did not use these recipes at all after leaving White Orchard. There are a few problems with the current implementation:
  • Food & drink healing is not balanced according to the amount of ingredients required to produce. For example, right at the start of the game you can learn how to make apple juice which is in the top tier of drink healing and costs next to nothing to make, in contrast with other much more expensive drink recipes which very often heal for less. Food recipes require way too many ingredients (the vast majority of which must be bought) and offer sub par healing in comparison.
  • Human enemies in Velen and onwards drop way too much food, often between 2-3 pieces each. Why should I waste money buying ingredients and cooking when I could obtain something nearly as good for free?
  • Coking recipes are too expensive for what they offer. They could use a 50% coin cost reduction across the board. Food recipes should require less ingredients. There should be more distinct healing "tiers" for different food & drink, less total recipes and bandits should drop less grub to incentivise people to interact with the system.


  • Enemies focusing more on NPCs during combat (if present) makes certain escort quests significantly more annoying on Death March: namely the Black Pearl and the Skellige mine clearing duo. Those NPCs could use a buff to their survivability.
  • All wolves/dogs & boars are significantly weaker compared to the vanilla game. Probably a design decision, but it feels out of place since all other enemies are harder. Wolves in the Land of a Thousand Fables do have level appropriate stats unlike all their siblings for some reason.
  • Kinks to the extra books/notes feature: fist fight quests keep giving you the same note after a brawl for every brawl, many texts are given out at weird times. For example, right at the beginning of some action sequence.
  • Early game bosses and contract monsters (level req < 15) could use a modest health reduction to prevent boredom. Later on the only enemy that felt too "health spongy" was Iris' nightmare. Those Olgierds could use a health reduction because at the moment the fight is quite repetitive, lacks the atmosphere of the burning manor fight and so becomes a bit tedious.
  • The base Yrden duration is too short and makes fighting Wraith bosses extremely tedious early on, until you get Enhanced or preferably Superior Moon Dust.
  • Superior Cursed Oil now requires berserker skin which is not obtainable in Skellige if you investigate the massacre with Ceris. Previously there was a bug where berserkers spawned near Kaer Morhen, but this seems to be fixed in the newest version. The only place I found berserker skin in the whole game was in the Borsodi vault (?), dropped by one of his guardsmen (??). Either put a copy of the ingredient somewhere in the Vildkaarls' village, or change it to some other more lore appropriate place. The current location makes no sense.
  • The inventory weight system is at best a sidegrade to Vanilla. Yes, it is unrealistic that Geralt is able to hold all these weightless ingredients in Roach's saddlebags. So this mod now gives them weight and forces you to regularly deposit all your ingredients in the stash. Then to access them more conveniently every time you are at an appropriate vendor (alchemist/blacksmith/armourer) Geralt is able to telepathically access said stash to obtain the ingredients. To me it seems like one unrealistic element was simply replaced with a different one equally as unrealistic, so what's the point?
    • In all fairness you can reduce the weight of all items from the mod options, but that slider leads to even more immersion problems. Because if you wish to compensate for the weight on all the ingredients you have to turn up the slider so much that all the swords and armour now weigh practically nothing as well. A better solution would be keeping the weight slider and adding a check box for "Zero ingredient weight", or just using the vanilla weight system because the current implementation isn't a clear improvement.
  • I find the name of the mod to be a bit unfortunate, since it has nothing to do with any of the content. Makes you wonder if it's one of the reasons why it is not more popular.
  • Grapeshot seems to deal insignificant damage to higher level enemies. Superior version of it hits arachas for 5 damage with an aimed shot for example. Even without bomb talents it shouldn't be this weak.
  • Aerondight has lost a great deal of its unique flavour (all items can now be upgraded) and the nerf to its secondary stats was too great. Before it would give 10% attack power per stack, up to 10 stacks, now this has been reduced to 5% crit damage. For comparison, random relic swords can spawn with 60%+ critical damage and have 4 other secondary stats as well. Not to mention free sockets, which cost ~8000 gold for Aerondight. Finally, while the bonus at maximum stacks is still great it's now harder to maintain due to the decreased enemy reaction time, is basically non-existent against all the instant attack foes (and for heavy armour builds) and has overlap with several consumables (thunderbolt potion & oils now give crit chance) and talents which reduces its effectiveness even further. Overall the sword feels underwhelming and not worth using.
  • Olgierd's sabre, Iris, no longer gains charges when enemies block your attacks and doesn't buff the damage of the fast attacks. To compensate it now deals 10% of target's maximum life in addition to the other bonus damage when charged. I was very excited to use this sword with the new item upgrade kits and was left moderately disappointed. The life loss penalty is still too big and basically forces you into using Katakan decoction which doesn't feel great. Furthermore, to charge the sword you must deliver 3 successful fast attacks in succession. Against armoured enemies this feels horrible as you're effectively whacking them with a wet noodle until you can charge the finisher. In addition, humans are much more likely to dodge your attacks compared to before causing you to often whiff on the charged strong attack while still paying the health cost. Overall the sword is still worth using and feels satisfying with the Severance runeword, however I would like to see some quality of life change: for example halving the health penalty.
  • This mod breaks the following achievements: equipping a full witcher set (Armed and Dangerous), equipping all the grandmaster set pieces (Dressed to Kill), equipping Aerondight (Embodiment of the Five Virtues). Tested on GoG. Probably irrelevant for 99% of people, but worth mentioning.
  • The Undvik set has less armour than the basic Feline set, despite having a higher level requirement and being heavy armour.
  • Superior Full Moon heal, based on current toxicity, either does not work or heals a minuscule amount.
  • Kill count bestiary section feels a bit too arcade-y and gimmicky for my tastes. Would prefer it hidden at the bottom of the list and collapsed by default or, better yet, an optional toggle in the mod options if possible.

Scoring (TLDR)

I will now attempt to rate this mod based on an arbitrary scale I just made up. A score of 5/10 means that overall the mod neither improves nor deteriorates the experience when compared to the original game. A higher score than that is good, lower is bad.
  • -1 for the fast reaction times on enemies with instantaneous attack animations (and the fact that this hasn't been fixed for so long) and the balancing issues of Blood & Wine.
  • -0.5 for the overall lowered quality of the combat experience: namely its feel, flow & realism.
  • -0.5 for all the points listed in the Nitpick section.
  • -0.5 for the experience penalty system which promotes meta-gaming and for the subpar support of the NG+ mode
Overall: 7.5/10. Despite the occasional hiccups I thoroughly enjoyed my playthrough with Ghost Mode. I found the mod to be an overall improvement to the base game and definitely recommend it.

Never Asked Questions

Q: What difficulty should I play on?
  • You are looking for a similar challenge to vanilla Death March or early game B&BB, to see if you like the other gameplay changes? Story & Sword. If you don't care about the combat then I would suggest that you also reduce monster damage from the mod options.
  • You played on Death March from level 1 and found it too easy? Blood and Broken Bones.
  • You played on Death March from level 1 with self-imposed limitations such as: no Quen, not using set swords, deliberately skipping some of the best talents and found it too easy? Death March.
Q: What build did you use?
A: Combat/Alchemy - GM Death March
I went for delusion & poisoned blades first. Muscle memory & strength training second, then back to alchemy for protective coating, afterwards filled out the combat tree. Undying was only equipped once the first B&W skill slot was unlocked and I could move an alchemy skill there, on lower difficulty levels I would replace it with Razor Focus. Delusion is optional. I pick it mostly for RP reasons although the extra stamina regen is nice, especially early on. If you don't want to use it then replace it with the Synergy skill from the alchemy tree.
Q: Any other interesting stats/tidbits from your run?
  • Hardest 1v1 fight: werewolf outside of the Whispering Hillock, ~10 deaths.
  • Other boss fights with number of deaths in parenthesis: WO Griffin (1), Imlerith (2), Toad Prince (0), Olgierd (3), Caretaker (1), Olgierds (2), Caranthir (0), Eredin (1), Dettlaff (0)
  • Hardest group fight: arachas cave south west of Harviken on Faroe, 8 deaths.
  • Found the "Tor Zirael" sword for the first time ever in 4 playthroughs, not sure if finally lucky or spawn chance increased in the mod. Unfortunately, stats wise it's still rubbish.
submitted by Paskoff to witcher [link] [comments]

After 9 months of obsession, here is my open source Node.js framework for backtesting forex trading strategies

TL;DR There's lots more to the story. But the code is all open source now. Have at it. I'm too exhausted to continue with this. If you'd like more details, feel free to message me. If you happen to carry on with this project or use any ideas from it, I would greatly appreciate it if you could keep in touch on your findings. If anyone has any insights, please feel free to comment or message me.
I've spent the last nine months working furiously on this. I started a project for backtesting strategies against data I exported from MetaTrader. I had a very powerful computer crunching numbers constantly, trying to find the most optimal configuration of strategy indicator inputs that would results in the highest win rate and profit possible.
Eventually, after talking with a data scientist, I realized my backtesting optimizer was suffering from something called overfitting. He then recommend using the k-fold cross-validation technique. So, I modified things (in the "k-fold" forex-backtesting branch), and in fact it provided very optimistic results when backtested against MetaTrader data (60 - 70% win rate for 3 years). However, I had collected 3 months of data from a trading site (by intercepting their Web Socket data), and when I performed validation tests against that data using the k-fold results created from the MetaTrader data, I only got a ~57% win rate or so. In order to break even with Binary Options trading, you need at least a 58% win rate. So in short, the k-fold optimization results produce a good result when validation tested against data exported from MetaTrader, but they do not produce a good result when validation tested against the trading site's data.
I have two theories on why this ended up not working with the trading site's data:
For the strategy I use the following indicators: SMA (Simple Moving Average), EMA (Exponential Moving Average), RSI (Relative Strength Index), Stochastic Oscillator, and Polynomial Regression Channel. forex-backtesting has an optimizer which tries hundreds of thousands of combinations of values for each of these indicators, combined, and saves the results to a MongoDB database. It can take days to run depending on how many configurations there are.
Basically the strategy tries to detect price reversals and trade with those. So if it "thinks" the price is going to go down within the next five minutes, it places a 5 minutes PUT trade. The Polynomial Regression Channel indicator is the most important indicator; if the price deviates outside the upper or lower value for this indicator (and other indicators meet their criteria for the strategy), then a trade is initiated. The optimizer tries to find the best values for the upper and lower values (standard deviations from the middle regression line).
Additionally, I think it might be best to enter trades at the 59th or 00th second of each minute. So I have used minute tick data for backtesting.
Also, I apologize that some of the code is messy. I tried to keep it clean but ended up hacking some of it in desperation toward the end :)
gulpfile.js is a good place to start as far as figuring out how to use the tools available. Look through the available tasks, and see how various "classes" are used ("classes" in quotes because ES5 doesn't have real class support).
The best branches to look at are "k-fold" and "master", and "validation".
One word of advice: never, ever create an account with Tradorax. They will call you every other day, provide very bad customer support, hang up the phone on you, and they will make it almost impossible to withdraw your money.
submitted by chaddjohnson to algotrading [link] [comments]

Valkyrie, Assault and covert ships review

Alright, I've played the shit out of this game for the last two days. I have almost 1337 kills. Here's my take. First, let me give the layout:
Part 1 Game Types
Part 2 Ships
Part 3 Ingame issues ______________________________________________
Part 1 Game Types
All game types are working great, and working as intended. However- extraction is currently a joke competitively. Maps like necropolis give clear advantages to schism teams. This advantage stems from the fact that the current meta in extraction is using top speed yurei's to capture the relic. On the first flight out of the carrier (match start) it's a race to get there- and normally the team who's yurei get's their first will have the first point.
Necropolis, and Forge both create situations where one team has to travel around in-game objects- while the other can take a straight line. Obviously, the straight line speed yurei get's to the point faster. Assuming that both teams are competent, it's rather annoying to know you will just give up a point when placed on the wrong team.
Extraction also relies on blind luck. If a relic spawns near a carrier as a full capped yurei is launched- it confers a significant advantage to that team. A yuri that is already traveling at top speed, with a full cap is nigh impossible to kill save for a lucky Mjolnir missile.
My suggestion is to make the gates be permanent structures. Near each carrier, and one for each team. Have the relic always spawn in one central location. Having the gametype changed in this fashion will allow for more viable ship types and more sustainable play styles than the current yurei cluster fuck we have currently.
Other than that- both new maps are great (outpost is my new favorite by far)
Part 2 Ships
Assault: Wraith
I flew the wraith almost singularly in old valkyrie. I liked the ship but always wished that it could be faster- more nimble, and agile. Unfortunately, warzone wraith feels more like a fat dominator. The wraith is a good benchmark. In the right hands, it still is deadly. However, it no longer is the king it once was. As of now, the wraith is no longer the top tier "best at everything" ship. It is a jack of all trades, and still incredible at carrier assault.
I enjoy the wraith because it now needs to use its advantages and flying style differently when coming up against other ships. Compared to most of the assault tree, the wraith has some high EHP. When fighting ships like the strix, yurei, shadow, supports- the wraith wants to push for a head-on, slower fight. Use it's EHP to its advantage and kill opponents with brute force. Against the jackal or heavies, the wraith needs to rely on its superior mobility to push a turn fight- and fight in the corners.
Overall, I like the place of the wraith (EHP and DPS wise). I do think that it is far too slow and sluggish though. When compared to just about any other assault (and shadow) the wriath has less 'burst/alpha, ' but over a length of time, the slow heating gattling guns do a better sustained DPS. If this is the case, the wraith needs to have the tools to drag fights out- so that way its nice EHP and higher DPS can start coming into play.
Currently, the wraith struggles in the turn fight against yurei / jackals when piloted by experienced pilots, and that's a shame- as the wraith should be one of the quintessential dogfighters.
My last piece to say about the wraith is its ultimate. The missile, which gives no warning before blowing you to smithereens. Instakill weapons with no warnings are not fun. I have been against teams where I have spawned, been instakilled by a missile- only to spawn twice more and meet the same fate. It's infuriating gameplay where I have no action to take, and no warnings. The missile is cancer, and the wraith could do with a better ultimate.
Lastly, the Mjolnir missile wrecks carriers. Two of them almost instakill the core- and that's just no fun.
--------------------------------------------------------------------- Upgrades
Accelerated Reciever +20% ROF, -15% damage per shot. Again, you ideally want the highest 'burst/alpha' DPS possible. The wraith has lowish 'burst/alpha' and high sustained DPS. This upgrade makes no sense, in fact in snapshot situations when fighting in the corners, it significantly lowers your burst DPS. Again, no logical reason why anyone would want to get this upgrade
Cooling Bonds: -10% Primary Weapon Overheat I have no idea what this does. Do you get to shoot 10% longer before your gun overheats? Or when you overheat are you allowed to continue regular shooting while waiting for 10% less time? Either way- it doesn't matter. This upgrade is useless in 99% of situations. It's only possible use could be on carrier assault, or shooting a tanky heavy. However, as someone who has flown many hours in the wraith- proper trigger control will go a longer way than this ever could.
Upgraded Ballistics: +15% Primary Weapon Damage per shot, -20% Rate of fire. As the only attack upgrade that is going to help cover the wraiths abysmal 'bust/alpha' DPS- this is the only attack upgrade to use. The only other choice would be not to choose an attack upgrade. How binary, how boring.
Overall the attack upgrades on the wraith are very disappointing. No room for 'personalized' gameplay. The upgrades have horrible choices that do nothing to change the fighting style of the ship.
I think this is some of the most ill-fated designs I have seen. The wraith has: Armor: 226 Shield: 110
Two of the defense upgrades worry about shields. One offers shield EHP (+15%) or shield recharge (10%). The last upgrade, (enhanced plating) gives 10% to armor EHP which is 248.6 total armor. Enhanced plating provides you with the highest raw EHP, with no drawbacks. There is no logical choice to choose any other defensive option.
Shield recharge is an entirely useless upgrade to get on any ship, but certainly for the wraith- as it's an armored fighter. Valkyrie is about burst. If your ship can survive the burst/alpha of an attack- you live for another day. At no point can you utilize any point of shield regen upgrades efficiently in any regular fighting. And the shield EHP upgrade gives less overall EHP than the armor EHP upgrade, while also lowering shield regen time. You would have to be touched to use it.
How blase. I thought upgrades were not supposed to be so quickly figured out using simple maths and logic. It would be so sweet if the upgrade tree had more elements of unique style, instead of this rubbish.
With so many missiles flying around in warzone- it's important to have countermeasures up as often as possible.
Again with simple math:
Extended Flare (-15% ECM cooldown, -10% duration) Cooldown: 25.5 seconds Duration: 2.7 seconds
Rapid Flare (+10% duration, +15% Cooldown) Cooldown: 34.5 Duration: 3.3 Seconds
Burst Flare (10% ECM range) If this was true ECM (all missiles explode once coming into range of your ship, regardless if they are targeted at you or a nearby ally)- this might have some use. However, the flares the yurei and wraith shoot do not have this effect. Even if it was the case that they destroyed other missiles, it's not worth choosing this upgrade instead of Extended Flare (-15% cooldown, -10% duration.)
If piloting skills are on point, you can time your ECM to where the shorter length doesn't matter. Again, there is a clear winner here- proven with simple logic and maths. I was hoping for some more variability in this tree.
Again, an obvious choice here. Good players fly around using boost or break (never regular 'slow boat speed'). By consistently using either boost or brake while flying- upgrades that give 10% increase to cap recharge are rendered pointless. From what I can tell- there is no difference in cap refill speed when you are holding the brake. Upgrades giving the largest pool of cap (called secondary tank) are the only choice in this case- no discussion.
I am disappointed with the upgrade tree on the wraith. There is no room for debate or an upgrade that could be preferred depending on flying style. There are simply four choices that are the absolute best from a logical/mathematical viewpoint; anything else would be stupid.
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Assault: Jackal
I enjoy this ship for many reasons. One of the biggest is that it appears to be the old spur body, with extra armor added onto the wings. I like the idea of the jackal- however, I feel it's implementation has been done poorly. The playstyle I enjoy about the jackal is the idea of a riot police officer with a shotgun.
The Jackal has a stupid amount of EHP for an assault (even before taking into account the over shield.) However, it's gun leave so much to be desired. We already have three flack ships- why do we need more? I was hoping that the jackal would have a shotgun like effect, with a scatter like weapon. Higher close range burst DPS. Instead what I'm given is a slow firing tank- and that just feels wrong.
All of that being said, I still enjoy the jackal. Particularly on outpost near the B point. The jackal likes to be in close spaces, going in tight circles at slower speed. The jackal lives for outposts corridors- and that's what I like about this ship. Out in the open, it's a rather poor choice. But in and around structures, the jackal shines.
Other than the poorly implemented weapon system, the jackal also suffers for a poorly thought out ability (overshield), and ultimate- along with poor upgrade choices. As for the ship, the jackal has the majority of it's EHP in armor. The overshield is a useless shield addition that feels wrong on the ship- especially when you take into account it's upgrade paths.
In the dogfight, the jackal wrecks smaller ships. WIth the proper upgrades, and the secondary fire ready- you can nearly one shot shadows, yurei's, and weaker supports. Against the wraith, if you can get it slow and into an enclosed space, you can melt it with ease. The jackal is always pushing for a merge- and want to go head on. Poor pilots or pilots forced into literal corners thanks to an enclosed space will find it difficult to stay away from this strategy. However, in the open, the jackal will have a hard time trying to push its advantage- and will be outmaneuvered.
In closing- let's talk about the jackal ultimate. It is so out of place on this ship- I don't even know where to begin. Unlimited cap and boost is something the yurei or wraith would want- not the jackal. The jackals fighting style is not high speed, and at no point is it ever going to be crying for cap or unlimited boost. It's slow and doesn't even have impressive top-end speed. The yurei ult has something the jackal could use to better effect. Give the jackal a sustained shotgun fire with increasing DPS- and get rid of this awkward boost ult. Or find a way to give the jackal an ability that will help it dominate in it's preferred element.
--------------------------------------------------------------------- Upgrades
Attack: The jackal has an overheat problem and excels at close quarters quick burst types of damage. A ship could be made to shine in a CQB (Close quarters battle) situation- and that is what I would expect from jackal upgrades.
Sadly, this is not the case. Its attack tree has first the Precision Barrel upgrade which gives -15% damage for 20% more range. Precision barrel is the complete antithesis to the entire idea of the ship. At no pint in valkyrie are you ever going to want to take an upgrade that is lowering your DPS? The jackal doesn't want more range, and if it's trying to fight at range, it's going to lose. This upgrade is worthless.
The next upgrade just gives a flat 7% increase in damage. When you compare this option to the first upgrade (precision barrel -15% damage 20% more range or the last upgrade Strengthened Mag housing +15% ROF, -20% range), there is no logical choice not to use the enhanced coils (+7% damage) every time. The jackal doesn't need to have higher ROF- as if you tap both of the triggers down with secondary fire, you deliver damage almost instantly as it is.
The jackal has an overheating problem, and a higher ROF amplifies that problem. Logically it doesn't make sense. Instead, the only choice is Enhanced coils (7% damage). This tree is again disappointing, as it's straightforward to spot the clear winner here.
I think this tree is the most disappointing for the jackal. Currently, the jackal EHP numbers look like this: Armor: 210 Shield: 168 Overshield cooldown: 60 seconds
As you can see- this ship is an armored ship. It has the majority of its EHP located there- yet a shield ability. The jackal has no way to defeat missile DPS- so using the overshield to buffer missile damage is an ideal situation. That, along with hugging close to walls, and staying inside structures (like a crab) are this ships best defense against missile fire.
The first defense upgrade (Robust Plating) gives +20% to armor and -10% to shield. After using this, the jackal now has: Armor: 252 Shield: 151.2
That defense upgrade gives the most raw EHP. As I have stated earlier, having the most raw EHP on a ship is the most useful stat to have without question.
The other two defense upgrades are as follows: Rejuvenate. Which gives 7% shield recharge rate- along with Superior shields which are +10% shield, -20% armor. Superior shields is once again a fool's errand, as it would give the jackal the following: Armor: 168 Shield: 184.8
Superior shield is a joke. Just look at this huge EHP discrepancy, why on early would anyone want to choose this upgrade? As for rejuvenating (+7% increase shield regen time)- again why is an armored ship wanting a bit more shield regen? All of these upgrade paths fail horribly at what the jackal wants- which is the ability to be an armored ship. Again, it's a straightforward matter of determining the 'best' option here- and that's dull.
One of the jackals most glaring weaknesses is that it doesn't have any way to counter the ever-present missile threat in valkyrie. Personally, I like this idea, as it pushes this ship into structures. Lack of missile defense fits into the playstyle of the ship- and discourages flying out into the open with it.
As I have shown earlier, the jackal is an armor tanked ship at heart- it wants nothing to do with shields. The defense upgrades push the ship even further away from shields. The jackal's ability is shield based which flies in the face of armored ship design. There is a mismatch here. The jackals overshield does not come up fast enough for it to be used as an EHP buffer regularly. 60-second cooldown is an eternity. Not to mention, that at base shield- an overshield will only give 72 shields worth of EHP.
Therefore- the only other option is to use it as a way to reduce incoming missile volley damage. In light of this- the first upgrade, (Enhanced shell +15 overshield, +10% cooldown) is useless as it increases your already long cooldown period.
Enduring shell isn't wrong (-5% cooldown time), however when you look at the numbers- Rapid shell (-10% cooldown, -15% overshield) is without question the best. A jackal with rapid shell gets 61.2 shield EHP every 54 seconds.
Either way, the overshield adds a paltry amount of EHP to an armor tanked ship. The jackal has a poorly designed active, and even worse upgrade paths- leaving this entire area of the ship ripe for better ideas/gameplay elements.
Mobility is an easy section to reason through. The mobility upgrades offered to the jackal are quickly figured out. As a slow, small radius turn fighter- the only viable upgrade here is augmented ignition (+20% Acceleration, -10% max speed). The faster acceleration helps the jackal in the corners and contributes to lowering turning radius- helping this ship push for merges.
The jackal's max speed matches that of the wraith- but as I have said earlier this ship doesn't like to be out in the open, Therefore, engine power is useless. The jackal doesn't have the cap to utilize the high-end speed, and the lower acceleration is going to hurt it significantly in the corners when dogfighting.
The last upgrade (engine expertise +5% cruising speed) is a complete waste. When flying in valkyrie, players are going to be on the brakes- or using boost. Never slow boating. It's a waste of an upgrade on any ship, and an unfortunate addition to the upgrade tree. One of, if not the most poorly designed upgrades (next to shield recharge) is cruising speed upgrades- can we please get something of more consequence?
In closing, like the wraith- the jackal has no room for argument or playstyle modifications. There is an 'objective best' upgrade path for this ship, and that's disappointing. I was hoping that there would be a multitude of upgrades that would fit styles of play- but It seems this is rarely the case.
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Assault: Strix
I was apprehensive about this ship. Thankfully, all of my fears were put to rest when I had the chance to fly it. The Strix is a well-designed sniper ship, and everything about it fits the bill. I enjoyed the playstyle, and love glassing people with the ultimate from so far away.
Everything on this ship fits a great theme. It's no dogfighter, but the dash drive, nice EHP, and high cap allow it to evade everything except a determined yurei. This ship does have some pitfalls though. These shortcomings mostly concern its upgrade path, and the in game UI.
The current UI makes it difficult to determine hits with the primary gun. Is there any way you can make this more visible? Telling exact range is also another UI shortcoming. I would like to know how far the strix can shoot (especially once you have utilized the 20% range increase or decrease upgrades.) If you could lock a target, and the triangle around the target could be red (out of range), or green (in range) it would help pilots determine the range to target quickly, without wasting precious shots. With the current UI, it's impossible to tell how far one can shoot. It's frustrating, and the only way that I can reliably 'know' that a target is at 2.2K is by using a missile lock- which then tells me the exact moment they move into my max range... Unless it's longer than 2.2K?
Field control with the strix is paramount to the success of this ship. The inability for a pilot to know how close they have to get ruins it for me.
--------------------------------------------------------------------- Upgrades
With the current UI- it's hard to justify trying to use increase range (precision barrel +20% range, -15% ROF, or Strengthened Mag Housing -20% range, +15% rof). I like these two upgrades. If the UI could more clearly show ranges- there are some great gameplay choices given to the player here, that can be argued- and certainly different upgrades used on various maps and game types. I like where these are going, but the UI would need to be fixed before I ever thought about flying with them.
That being said, 15% slower firing time is an eternity. While it would make you a bit safer, I'm not sure an extra .5K is worth the range upgrade. The shorter range version I do feel is competitive. You will be closer, but also outputting so much more damage. I like the tradeoff.
That leaves us with enhanced coils (+7% damage), and currently, that is the only upgrade worth choosing. It gives you the most breathing room (in range) and gives the player a higher grace period to re-align their aim after a shot. It's far safer than strengthened mag housing, and I would think that in actual combat- gives the most DPS. You have to make fewer shots with enhanced coils to see a benefit- while if you choose an ROF option, you always need to be on track.
Either way, good work here CCP. If the UI could be fixed, I see the strix as having a plethora of options with no clear winner to identify.
Unfortunately, the good work of the attack upgrades dies with the defense tree. The Strix EHP looks like this:
Armor: 112 Shields: 224
The defense upgrades are laughable- just like the jackal and wraith before it.
Option one is Shield capacitor (which gives +15% shield EHP, -10% recharge rate). When you choose this option- the strix shield gets 257.6 shield EHP. This option provides the strix the highest EHP possible. As I have said on occasions before, shield regen time is a useless stat. Increasing or decreasing it by a small amount is useless in combat. EHP and raw buffer are what matters. Especially to a sniper- who needs to have the EHP hold out long enough to pull range.
The next option is enhanced plating (+10% armor), and you would have to be daft to use this. After this upgrade, the Strix armor sits at 123.2. A paltry amount. The Strix is a shield ship. Upgrading its armor is a complete waste, making this upgrade worthless.
Lastly, we have Shield regeneration (+10% recharge, -15% shield EHP). As I have stated earlier, this upgrade takes away everything you would want in the strix. It's a complete waste, and useless. There is only one choice on this upgrade tree- and that's sad. Surely we can do better?
Dashdrive is the lifeblood of this ship- with dash and a full cap of boost; the strix can outrun just about anything. Running in this manner keeps the ship safe, and with a healthy shield EHP buffer- it's challenging to take down.
Dashdrive is the only way the strix can shield itself from missiles. At base, the dash cooldown is 30 seconds. So ideally- we want to reduce that as much as possible.
Dash 1 (+10% dash duration, +15% cooldown) is a waste. As dashdrive lasts for two seconds, you are paying an additional 5 seconds of cooldown for .2 more seconds in the dash.
Dash 2 (-7% cooldown) is slightly better. Cooldown is now 28 seconds.
Both of these pale in comparison to the last upgrade, Dash 3. Dash 3 (-15% cooldown, -10% dash duration) If the strix wants to have dash up as much as possible to increase survivability- this is the only choice. Cooldown time is now 25.5 seconds, and your dash time is only reduced by .2 seconds.
Again in the tech tree, simple math makes for an obvious choice, with no room for any other.
As I have shown in the Wraith and jackal, the strix suffers from the same problem upgrades in the mobility tree. The strix has a lower top end speed (500) than other assualt ships. Because of this, it needs to have the largest cap possible to dashdrive- then depend on having higher cap after the dash to outpace opponents.
Like the other ships, it appears that holding break recharges cap at the same rate. In the case of the strix- you will be holding break almost continuously while setting up shots. This will lead you to having plenty of time to recharge your capacitor.
Regeneration manifold (+10% recharge rate, -15% cap size) is useless, as explained above.
Secondary tank (=15% cap size, -10% recharge rate) like the wraith- it's the only choice here. It gives you everyting you could want on the strix, no exeptions.
Enhanced distributer (+10% cap size) Just a worse version of the secondary tank upgrade. It should never be picked.
Again, the upgrade pathing on the strix leaves so much to be desired. There is no counterplay here- simple maths will clearly show which upgrade is superior.
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Assault: Yurei
Ahh, the golden child of the assault tree. It's fast, nimble, and maneuverable. It feels like how the wraith should be. Can you make the Yurei even swifter? This ship is by far my favorite and simply a blast to fly. It has a cultivated mobility upgrade tree as well and choosing some of those upgrades completely altered the ship gameplay. It's entertaining to play around with, and talk with other pilots about their preferences.
I honestly think this ship is near perfect. Except for four things.
  1. The auto-aim on the primary weapon and ultimate needs to go. I can't compensate for lag with this ship. And I can't hit supports. These problems are amplified when I am not on my native server. After spending so much time in the wraith- I have honed my aiming skills to a razor's edge. It's so frustrating to watch the computer trying to correct (while missing) a target that I should be hitting. Turn the auto aim off; it's destroying this ship.
  2. The ultimate makes no sense. While mayhem is fun- to get the most out of it, the yurei has to be going slow and pointed in a straight line (all the things it never wants to do). Give the yurei the jackals ultimate, or some hypermobility/hypervelocity type of upgrade. The yurei lives on cap, and speed. It's ultimate should amplify it. Mayhem doesn't suit it at all.
  3. The upgrade tree (bar two of the mobility upgrades) is a joke, just like the other assault trees. There is no depth- it's very binary, simple math leads to the best upgrades, and that's disappointing.
  4. The yurei is a blast to fly. I wish that there would be more 'high speed' 'agile' ships to choose from instead of just one. It's a shame.
Again, as I have explained before- it's ideal in valkyrie to have high 'alpha/burst' DPS. The attack tree on the yurei is geared towards missiles. Ideally, finding an upgrade that gives the highest burst damage is head and shoulders above the other choices.
Fast reload (+20% missile reload speed, -15% damage). This upgrade is the antithesis of what would be competitive in valkyrie so that we can ignore this.
Destructive warhead (+7% missile damage) This wouldn't be a bad upgrade. However, there is a third- which completely blows it out of the water.
Enhanced warhead (15% damage increase per missile, -20% reload speed). The clear winner. When fighting other yurei, quick merges with a head flicked 3X missile, and a full overheat burst kills a target. It will also easily knockout many other medium / low health targets as well.
It's unfortunate that again, we have a clear winner and no room for counterplay with any of the other upgrades.
For reference, the yurei has:
Armor: 110 Shields 112
Of the three defense upgrades available:
Superior shields (+10% shields, -20% armor) Total EHP: 222.4 Bear in mind that the base yurei has 222 EHP. so this upgrade gives .4 more EHP.
Rejuvenate: 7% increase shield regen. As I have spoken at length about this before- this upgrade is useless on all ships, and most certainly for the yurei. The yurei has a wet paper bag of a tank. It needs all the help it can get, and this gives it nothing it could ever want. Useless.
Robust Plating: (+20% armor, -10% shields) total EHP: 232.8
Ding, Ding Ding. Again using simple math, we have a clear winning here. Robust plating gives nearly 5% more raw EHP, making it the clear winner.
Lowering cooldown and having counters up as often as possible gives you the best chance of survival in valkyrie. Base stats are 15 second ECM cooldown with 3-second duration.
Again with simple math:
Extended Flare (-15% ECM cooldown, -10% duration) Cooldown: 25.5 seconds Duration: 2.7 seconds
Rapid Flare (+10% duration, +15% Cooldown) Cooldown: 34.5 Duration: 3.3 Seconds
Burst Flare (10% ECM range) If this was true ECM (all missiles explode once coming into range of your ship, regardless if they are targeted at you or a nearby ally)- this might have some use. However, the flares the yurei and wraith shoot do not have this effect. Even if it was the case that they destroyed other missiles, it's not worth choosing this upgrade instead of Extended Flare (-15% cooldown, -10% duration.)
If piloting skills are on point, you can time your ECM to where the shorter length doesn't matter. Again, there is a clear winner here- proven with simple logic and maths. I was hoping for some more variability in this tree.
This upgrade tree (of all the assault ships) has two options that wowed me. They offered an entirely new ship, and flying style.
Augmented ignition (+20% acceleration, -10% max speed) This option turns the yurei into a knife fighter. Scary fast in the corners, and able to react at lightning speeds. This upgrade allows the yurei to shine in smaller areas and slower fights. The 20% acceleration is absurdly fast when dogfighting other ships, and when coming up upon another opponent, you can fly circles around them,
The big tradeoff here is that the yurei's top-end speed is much lower. Augmented ignition is not ideal for extraction games, and in some cases can lower survivability. That being said, between the two viable options- I think that this choice is best for new players and pilots. It would still have its place inside clinical 1v1 dogfights- and on many maps. Otherwise, I think that true veteran pilots will choose the second option.
The second option is engine power (+10% max speed, -20% acceleration). This upgrade is hands down the single reason why I have put so much time into this ship. It has completely changed the flying dynamic and added a new meta to dogfighting, and ship control. This upgrade has an incredibly high skill ceiling, and it's just a blast to fly.
Careful management of cap, turning rate, and speed are needed to make this upgrade shine. No longer can you just throw the ship into continuous corners, or ideally let your speed drop off. If kept at high speed, the yurei can attain speeds that make it untouchable. It takes a ton of practice to keep speed, while still being productive on the field and delivering DPS. It's an intense gameplay element. More upgrades should provide this kind of wow factor. I feel like I am flying an entirely different ship. Excellent work here.
The last mobility upgrade is Engine expertise (+10% cruising speed). And as I have mentioned earlier- cruising speed is a worthless stat- as most / all ships are going to be braking or accelerating at all times. Engine expertise is a waste of an upgrade slot.
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The shadow is the ship that I had dreaded the most when I learned of its development. After playing against, and with this ship- I can say without a doubt that it is a blight upon the game.
The shadow offers a very dull, and binary gameplay element. It completely steps in on the toes of the strix. Currently, I would argue that it does the job of sniper more efficiently than the strix.
The shadow has limited use in the game and on teams. It is designed to hunt one player, or steal kills. The shadow is a natural choice for many players- as it allows your stats to look 'good.' The ship is a vulture- nothing more. Taking kills, and sniping very low health targets, it can't provide useful DPS or control nodes. It's useless on carrier assault (save for its ultimate, which I will discuss later.) and has limited use in extraction.
The shadows head tracked sniper weapon is absurdly easy to aim, and difficult to dodge. Frequently when playing against a shadow- one of two things will happen.
Shadow flies in with a group of friendlies or cloaked. Takes shot at a target, and if it has weak tank/low EHP instant kills it. If the shadow misses (which is difficult) the targeted ship turns around and slaughters the shadow. It's very annoying. Instantly killed by something you can't see, or instantly killing a defenseless ship is not healthy gameplay.
It provides no useful element to a team, other than collecting its points and kill stealing.
I don't want to do an entire analysis of this ship. Frankly, I'm disgusted with it. The cloak timers are absurdly long, the damage far too high- and the ease at which that damage applied ridiculously easy.
On the flip side, this ship is not interesting to chase, or dogfight- as it instantly dies, or cloaks for eternity. There is not intense gameplay here. Only waiting to see if the shadow pilot is uncoordinated enough to miss easily lined up shots. Thankfully you at least tell ships that one is nearby when cloaked. However, this is not enough defense. Worst of all, intelligent shadow pilots will approach their targets without cloak- insta kill them, then cloak for escape. If you are involved in a dogfight- you have no warning then. I'm thankful that you can still see cloaked ships on radar, but there needs to be another element.
Consider adding a proximity decloak range to the shadow. If it flies too close to anything, have the cloak turn off, or be visible during the duration the ship is too close to the target. Or, you could show the shadow as a different triangle on the radar.
Lastly, let's talk about the ultimate. Violent whisper and all insta kill ultimates for that matter need to go. They are not fun, engaging- and the fact that this can be used for carrier cores is a joke.
At the VERY LEAST make it very easy to notice when the violent whisper is used (see D.VA from Overwatch). This ultimate is the cream on top of the cancer cake.
This ship is a complete failure CCP. I am desperately hoping that you rework the entire tree. I'm not going to do a module review, as I don't want to give this ship any hope.
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Ingame issues
A quick list:
All in all, my hat is off to you CCP. You guys hit it out of the park with this one. With some fine-tuning and a bit of balance work- this game is going to be incredible. It's already miles better than old Valkyrie. I'm impressed that such a small team could create something like this. Gameplay is fresh, and on many ships- very deep. Looking forward to spending more time in the cockpit :)
In closing, I'm planning to look at the rest of the ships in depth. I have been flying the supports quite a bit and will do a write-up when I can. To quickly summarize- the medusa is a better wraith, than the wraith (just please turn off auto aim). Kirin is completely useless at all levels, Nagi is working as intended- and the banshee phaser is baked aids. Why are phasers still in the game?
submitted by Almostblue- to valkyrie [link] [comments]

Perpetual Option: Och-Ziff Capital Management Group (OZM)

In his book, You Can Be a Stock Market Genius, Greenblatt talks about using LEAPs to make leveraged bets. The book included his trade in Wells Fargo (WFC, another topic for a future post, I suppose).
But sometimes, stocks get down so cheap that they become priced like options. In the Genius book, the WFC LEAPs were priced at $14 while the stock was at around $77.
Here, we have a hedge fund manager trading less than $3.00/share, which is a typical price for regular options, not even LEAPs. Of course, all stocks are options on the residual value of businesses. But sometimes things are priced for either a large gain or zero, just like an option.
I call this a perpetual option, but that reminds me of those lifetime warranties. Like, who's lifetime? The manufacturer's? The store's? Yours? Nothing is forever, so I guess there really is no such thing as a perpetual option. But anyway...
Och-Ziff IPO'ed in 2007 at $32/share and traded in the mid $20's right before the crisis, then down to below $5.00 during the crisis and back up to the mid-teens. I've been watching this since the IPO and looked at it again when it was trading around $10/share. It's down quite a bit since then. I didn't own it back then but I did take a small bite down at $5.00/share.
I have mentioned other private equity and hedge fund managers here in the past but haven't owned most of them because of the amount of money that seemed to be going into alternatives. I was just worried that the AUM's of all of these alternative managers were going up so quickly that I couldn't imagine them earning the high returns that made everyone rush to them in the first place. Look at the presentation of any of these alternative managers and their AUM growth is just staggering.
Extremely Contrarian We investors walk around and think about all sorts of things; look at store traffic, taste new foods/restaurant concepts, count how many Apple watches people are wearing (I recently biked around the city with my kid (Brooklyn to Central Park, around the park (around the big loop) and all the way downtown back to Brooklyn (30+ miles) and I think I counted two Apple watches that I saw compared to countless iPhones. And this was in the summer so no coats or long sleeves to hide wrists).
And a couple of the things that we tend to think about are, What does everybody absolutely love, and what are they 100% sure of (other than that Hillary will win the election and that the market will crash if Trump wins), and What do people absolutely, 100% hate and don't even want to talk about? In the investing world right now, it seems like the one thing that everybody seems to agree with is that active investing is dead (OK, not completely true because we active investors never really lose faith in it). The data points to it (active managers underperforming for many years, legendary stock pickers too not performing all too well, star hedge funds not doing well etc...). The money flows point to it (cash flowing out of active managers and into passive funds, boom in index funds / ETFs; this reminds me of the 1990's when there were more mutual funds than listed companies. There are probably more ETFs now than listed companies). Sentiment points to it (stars and heroes now are ETF managers, quants etc.).
By the Way Oh, and by the way, in case people say that it is no longer possible due to this or that reason for humans to outperform indices or robots, I would just say that we have seen this before. Things in finance are cyclical and we've seen this movie before.
From the 1985 Berkshire Hathaway Letter, Most institutional investors in the early 1970s, on the other hand, regarded business value as of only minor relevance when they were deciding the prices at which they would buy or sell. This now seems hard to believe. However, these institutions were then under the spell of academics at prestigious business schools who were preaching newly-fashioned theory: the stock market was totally efficient, and therefore calculations of business value -- and even thought, itself -- were of no importance in investment activities. (We are enormously indebted to those academics: what could be more advantageous in an intellectual contest -- whether it be bridge, chess or stock selection than to have opponents who have been taught that thinking is a waste of energy?)
What Do People Hate? So, back to what people absolutely hate. People hate active managers. It's not even stocks that they are not interested in. They hate active managers. Nobody outperforms and their fees are not worth it. What else do they hate? They hate hedge funds. I don't need to write a list here, but you just keep reading one institution after another reducing their exposure to hedge funds. There is a massive shakeout going on now with money leaving hedge funds. Others like Blackstone argues that this is not true; assets are just moving out of mediocre hedge funds and moving into theirs.
This is a theme I will be going back to in later posts, but for now I am just going to look at OZM.
OZM OZM is a well-known hedge fund firm so I won't go into much detail here. To me, it's sort of a conventional equity-oriented hedge fund that runs strategies very typical of pre-Volcker rule Wall Street investment banks; equity long/short, merger arb, convertible arb etc. They have been expanding into credit and real estate with decent results. But a lot of their AUM is still in the conventional equity strategies.
What makes OZM interesting now is that chart from the Pzena Investment report (see here). These charts make it obvious why active managers have had such a hard time. The value spread has just continued to widen since 2004/2005 through now. Cheap stocks get cheaper and expensive stocks get more so. You can see how this sort of environment could be the worst for long/short strategies (and value-oriented long strategies, and even naked short strategies for that matter). Things have just been going the wrong way with no mean reversion.
But if you look at where those charts are now, you can see that it is probably exactly the wrong time to give up on value strategies or value-based long/short strategies; in fact it looks like the best time ever to be looking at these strategies.
Seeing that, does it surprise me that many pension funds are running the other way? Not at all. Many large institutions chase performance and not future potential.
Conceptually speaking, they would rather buy a stock at 80x P/E that has gone up 30%/year in the past five years that is about to tank rather than buy an 8x P/E stock that has gone nowhere in the past five years but is about to take off; they are driven by historic (or recent historic) performance.
OZM Performance Anyway, let's look at the long term performance of OZM. This excludes their credit and real estate funds which are doing much better and are growing AUM.
This is their performance since 1994 through the end of 2015:
OZM fund S&P500 1994 28.50% 5.30% 1995 23.50% 27.40% 1996 27.40% 23.00% 1997 26.70% 33.40% 1998 11.10% 28.60% 1999 18.80% 21.00% 2000 20.60% -9.10% 2001 6.30% -11.90% 2002 -1.60% -22.10% 2003 24.00% 28.70% 2004 11.10% 10.90% 2005 8.80% 4.90% 2006 14.80% 15.80% 2007 11.50% 5.50% 2008 -15.90% -37.00% 2009 23.10% 26.50% 2010 8.50% 15.10% 2011 -0.50% 2.10% 2012 11.60% 16.00% 2013 13.90% 32.40% 2014 5.50% 13.70% 2015 -0.40% 1.40% 5 year avg 5.85% 12.57% 10 year avg 6.69% 7.32% Since 1994 12.05% 8.87% Since 2000 7.59% 5.01% Since 2007 5.14% 6.53%
So they have not been doing too well, but it's really only the last couple of years that don't look too good. Their ten-year return through 2013 was +8.2%/year versus +7.4%/year for the S&P 500 index. It's pretty obvious that their alpha has been declining over time.
For those who want more up-to-date figures, I redid the above table to include figures through September-end 2016. And instead of 5 year and 10 year returns, I use 4.75-year and 9.75-year returns; I thought that would be more comparable than saying 5.75-year and 10.75-year, and I didn't want to dig into quarterly figures to get actual 5 and 10s.
OZM fund S&P500 1994 28.50% 5.30% 1995 23.50% 27.40% 1996 27.40% 23.00% 1997 26.70% 33.40% 1998 11.10% 28.60% 1999 18.80% 21.00% 2000 20.60% -9.10% 2001 6.30% -11.90% 2002 -1.60% -22.10% 2003 24.00% 28.70% 2004 11.10% 10.90% 2005 8.80% 4.90% 2006 14.80% 15.80% 2007 11.50% 5.50% 2008 -15.90% -37.00% 2009 23.10% 26.50% 2010 8.50% 15.10% 2011 -0.50% 2.10% 2012 11.60% 16.00% 2013 13.90% 32.40% 2014 5.50% 13.70% 2015 -0.40% 1.40% 2016* 1.10% 7.80% 4.75 year 6.53% 14.58% 9.75 year 5.48% 6.72% Since 1994 11.68% 8.92% Since 2000 7.29% 5.27% Since 2007 4.82% 6.86%
So over time, they have good outperformance, but much of that is from the early years. As they get bigger, it's not hard to see why their spread would shrink.
They are seriously underperforming in the 4.75 year, but that's because the S&P 500 index was coming off of a big bear market low and OZM didn't lose that much money, so I think that is irrelevant, especially for a long/short fund.
More relevant would be figures from recent market peaks which sort of shows a through-the-cycle performance. Since the market peak in 2000, OZM has outperformed with a gain of +7.3%/year versus +5.3%/year for the S&P, but they have underperformed since the 2007 peak. A lot of this probably has to do with the previous charts about how value spreads have widened throughout this period.
I would actually want to be increasing exposure to this area that hasn't worked well since 2007. Some of this, of course, is due to lower interest rates. Merger arb, for example, is highly dependent on interest rates as are other arbitrage type trades. (The less risk there is, the closer to the short term interest rate the return is going to be.)
One thing that makes me scratch my head, though, in the 3Q 2016 10-Q is the following: OZ Master Fund’s merger arbitrage, convertible and derivative arbitrage, corporate credit and structured credit strategies have each generated strong year-to-date gains through September 30, 2016. In merger arbitrage, certain transactions in which OZ Master Fund participated closed during the third quarter, contributing to the strategy’s year-to-date gross return of +1.3%. Convertible and derivative arbitrage generated a gross return of +0.5% during the third quarter, driven by gains in convertible arbitrage positions, commodity-related volatility, commodity spreads and index volatility spread trades. Year-to-date, convertible and derivative arbitrage has generated a gross return of +1.3%. In OZ Master Fund’s credit-related strategies, widening credit spreads and certain event-driven situations added +0.4% to the gross return within corporate credit during the third quarter, while in structured credit, a +0.9% gross return during the quarter was attributable to the realization of recoveries in certain of our idiosyncratic situations. Year-to-date, the corporate credit and structured credit strategies are each up +1.2% on a gross basis. Gross returns of less than 2% are described as "strong". Hmm... I may be missing something here. Maybe it is 'strong' versus comparable strategies. I don't know. Anyway, moving on...
Greenblatt Genius Strategies Oh yeah, and by the way, OZM is one of the funds that are heavily into the yellow book strategies. Here's a description of their equity long/short strategy: Long/short equity special situations, which consists of fundamental long/short and event-driven investing. Fundamental long/short investing involves analyzing companies and assets to profit where we believe mispricing or undervaluation exists. Event-driven investing attempts to realize gain from corporate events such as spin-offs, recapitalizations and other corporate restructurings, whether company specific or due to industry or economic conditions.
This is still a large part of their book, which is a good thing if you believe that the valuation spreads will mean revert and that Greenblatt's yellow book strategies are still valid.
One thing that may temper returns over time, though, is the AUM level. What you can do with $1 billion in AUM is not the same as when you have $10 billion or $30 billion. I don't think Greenblatt would have had such high returns if he let AUM grow too much.
This seems to be an issue with a lot of hedge funds. Many of the old stars who were able to make insane returns with AUM under $1 billion seem to have much lower returns above that level.
Here is OZM's AUM trend in the past ten years. Some of the lower return may correlate to the higher AUM, not to mention higher AUM at other hedge funds too reducing spreads (and potential profits).
Just to refresh my memory, I grabbed the AUM chart from the OZM prospectus in 2007. Their AUM was under $6 billion until the end of 2003 and then really grew to over $30 billion by 2007.
Their 10-year return through 2003 was 18%/year vs. 10.6%/year for the S&P 500 index.
From the end of 2003 through the end of 2015, OZM's funds returned +7.2%/year versus +7.4%/year for the S&P 500 index. So their alpha basically went from 7.4%/year outperformance to flat.
This is actually not so bad as these types of funds often offered 'equity-like' returns with lower volatility and drawdowns. The long/short nature of OZM funds means that investors achieved the same returns as the S&P 500 index without the full downside exposure. This is exactly what many institutions want, actually.
But still, did their growth in AUM dampen returns? I think there is no doubt about that. These charts showing tremendous AUM growth is the reason why I never owned much of these alternative managers in the past few years I've been watching them.
The question is how much of the lower returns are due to the higher AUM. Of course, some of this AUM growth is in other strategies so not all new AUM is squeezed into the same strategies.
Will OZM ever go back to the returns of the 1990's? I doubt that. First of all, that was a tremendous bull market. Plus, OZM's AUM was much smaller so they had more opportunities to take advantage of yellow book ideas and other strategies.
Boom/Bubble Doesn't Mean It's a Bad Idea By the way, another sort of tangent. Just because there is a big boom or bubble in something doesn't necessarily make that 'something' a bad idea. We had a stock market bubble in the late 1920's that ended badly, but owning parts of businesses never suddenly became a bad idea or anything. It's just that you didn't want to overpay, or buy stocks for the wrong reasons.
We had a boom in the late 1990's in stocks that focused on picking stocks and owning them for the long term as exemplified by the Beardstown Ladies. Of course, the Beardstown Ladies didn't end well (basically a fraud), but owning good stocks for the long haul, I don't think, ever became a bad idea necessarily.
We had a tremendous housing bubble and various real estate bubbles in recent years. But again, owning good, solid assets at reasonable prices for the long haul never became a bad idea despite the occasional bubbles and collapses.
Similarly, hedge funds and alternative assets go through cycles too. I know many value investors are not with me here and will always hate hedge funds (like Buffett), but that's OK.
We've had alternative cycles in the past. Usually the pattern is that there is a bull market in stocks and people rush into stocks. The bull market inevitably ends and people lose money. Institutions not wanting to lose money rush into 'alternative' assets. Eventually, the market turns and they rush back into equities.
I think something similar is happening now, but the cycle seems a bit elongated and, and the low interest rates is having an effect as alternatives are now attracting capital formerly allocated to fixed income. In the past, alternatives seemed more like an equity substitution, risk asset.
Valuation OK, so what is OZM worth?
Well, a simple way of looking at it is that OZM has paid an average of $1.10/year in dividends in the last five years. During the past five years, the funds returned around 6%/year, so it's not an upside outlier in terms of fund performance.
Put a 10x multiple on it and the stock is worth $11/share.
Another way to look at it is that the market is telling you that it is unlikely that OZM will enjoy the success even of the past five years over the next few years. Assuming a scenario of failure (stock price = 0) or back to sort of past five years performance ($11), a $3.00 stock price reflects the odds of failure at 73% and only a 27% chance that OZM gets back to it's past five year average-like performance. Of course, OZM can just sort of keep doing what it's doing and stay at $3.00 for a long time too.
There is a problem with this, though, as the dividends don't reflect equity-based compensation expense; OZM gives out a bunch of RSU's every year.
To adjust for this, let's look at the economic earnings of the past five years including the costs of equity-based compensation.
Equity-based compensation expense not included in economic income is listed below ($000):
2008 102,025 2009 122,461 2010 128,737 2011 128,916 2012 86,006 2013 120,125 2014 104,344 2015 106,565
It's odd that this doesn't seem to correlate to revenues, income or AUM; it's just basically flat all the way through.
If we include this, economic income at OZM averaged around $520 million/year. With fully diluted 520 million shares outstanding, that's around $1.00/share in economic earnings per share that OZM earned on average over the past five years. So that's not too far off from the $1.10/share dividends we used above.
One of the interesting things about investing is when you find alternative ways to value something instead of just the usual price-to-book values, P/E ratios etc.
So how would you value this?
What about adjusting the implied odds from the above. What if we said there's a 50/50 chance of recovery or failure. Let's say recovery is getting back to what it has done over the past five years on average, and failure is a zero on the stock.
50% x $0.00 + 50% x $10.00 = $5.00/share
In that case, OZM is worth $5.00/share, or 70% higher than the current price. You are looking at a 60 cent dollar in that case.
Let's say there is a 70% chance of recovery.
70% x $10.00 + 30% x $0.00 = $7.00/share.
That's 130% higher, or a 40 cent dollar.
By the way, the AUM averaged around $37 billion over the past five years, and remember, their return was around 5.9%/year so these figures aren't based on huge, abnormal returns or anything.
As of the end of September 2016, AUM was $39.3 billion, and this went down to $37 billion as of November 1, 2016. OZM expects continued redemptions towards year-end both due to their Justice Department/SEC settlement and overall industry redemption trends.
The above ignored balance sheet items, but you can deduct $0.60/share, maybe, of negative equity, or more if you think they need more cash on the balance sheet to run their business.
Preferred Shares As for the $400 million settlement amount and preferred shares, the settlement amount is already on the balance sheet as a liability (which was paid out after the September quarter-end). The preferred shares were sold after the quarter ended. They have zero interest for three years so I don't think it impacts the above analysis. You would just add cash on the balance sheet and the preferreds on the liability side.
If you want to deduct the full amount of the settlement of $400 million, you can knock off $0.77/share off the above valuation instead of the $0.60/share.
Earnings Model The problem with these companies is that it's impossible, really, to predict what their AUM is going to be in the future or their performance. Of course, we can guess that if they do well, AUM will increase and vice-versa.
But still, as a sanity check, we should see how things look with various assumptions in terms of valuation.
First of all, let's look at 2015. In the full year to 2015, a year that the OZM funds were down (master fund), they paid a dividend of $0.87. Adjusted economic income was $240 million (economic income reported by OZM less equity-based comp expense) and using the current fully diluted shares outstanding of 520 million, that comes to $0.46/share. OK, it's funny to use current shares outstanding against last year's economic income, but I am trying to use last years' earnings as sort of a 'normalized' figure.
Using these figures from a bad year, OZM is current trading at a 29% dividend yield (using $3.00/share price) and 6.5x adjusted economic income. This would be 8.3x if you added the $0.77/share from the settlement above.
OK, so average AUM was $44 billion in 2015, so even in a bad year, they made tons in management fees. Fine. We'll get to that in a second. AUM is $37 billion as of November 2016, and is probably headed down towards year-end.
2016 Year-to-Date So let's look at how they are doing this year so far. Fund performance-wise, it hasn't been too good, but they do remain profitable. These fund businesses are designed so that their fixed expenses are covered by their management fees. Big bonuses are paid out only when the funds make money.
Anyway, let's look at 2016 so far in terms of economic income.
In the 3Q of 2016, economic income was $57.4 million. Equity-based compensation expense was $18.3 million so adjusted economic income was $39.1 million. Annualize that and you get $156 million. Using 520 million fully diluted shares (share amount used to calculate distributable earnings in the earnings press release), that comes to $0.30/share adjusted economic income. So at $3.00/share, OZM is trading at 10x arguably depressed earnings. (This excludes the FCPA settlement amount). If you include $400 million of the FCPA preferreds (total to be offered eventually), then the P/E would actually be closer to 12.6x.
For the year to date, economic income was $195 million, and equity-based comp expense was $56 million so adjusted economic income was $139 million. Again using 520 million shares, that comes to $0.25/share in adjusted economic earnings per share. Annualize that and you get $0.33/share. So at $3.00/share, OZM is trading at 9x depressed earnings, or 11x including the FCPA preferred.
OK, so maybe this is not really 'depressed'. With still a lot of AUM, it is possible that AUM keeps going down.
AUM was $37 billion in November, but let's say it goes down to $30 billion. That's actually a big dip. But let's say AUM goes down there. And then let's assume 1% management fees, 20% incentive fees, and economic income margin of 50% (averaged 56% in past five years) and the OZM master fund return of 5%.
In this case, economic income would be $300 million. Equity-based comp costs seems steady at around $100 million, so we deduct that to get adjusted economic income. This comes to $200 million.
That comes to around $0.40/share. At $3.00/share, that's 7.5x adjusted economic earnings, or a 13% yield, or 9.4x and 10.6% yield including the FCPA preferreds.
So that's not bad. We are assuming AUM dips to $30 billion and OZM funds only earn 5%/year, and with that assumption the stock is trading at this cheap level.
Things, of course, can get much worse. If performance doesn't improve, AUM will keep going down. You can't really stress test these things as you can just say their returns will never recover and that's that.
On the other hand, any improvement can get you considerable upside.
If assets return to $40 billion and returns average 6% over time, economic income margin goes to 56% (average of past five years), adjust economic income per share is $0.76/share and the stock could be worth $7.60/share for more than a double.
Here's a matrix of possibilities. Skeptics will say, where are the returns below 5% and AUM below $30 billion?!
Well, OK. If returns persist at lower than 5%, it's safe to assume that AUM will go down and this may well end up a zero. That is certainly a possibility. It wouldn't shock many for another hedge fund to shut down.
On the other hand, if things do stabilize, normalize and OZM recovers and does well, there is a lot of upside here. What is interesting to me is that the market is discounting a lot of bad and not pricing in much good. This is when opportunities occur, right?
5% 6% 7% 8% 9% 10% 30,000 $0.45 $0.52 $0.58 $0.65 $0.71 $0.78 35,000 $0.56 $0.64 $0.71 $0.79 $0.86 $0.94 40,000 $0.67 $0.76 $0.84 $0.93 $1.01 $1.10 45,000 $0.78 $0.87 $0.97 $1.07 $1.16 $1.26 50,000 $0.88 $0.99 $1.10 $1.21 $1.32 $1.42 55,000 $0.99 $1.11 $1.23 $1.35 $1.47 $1.58 60,000 $1.10 $1.23 $1.36 $1.49 $1.62 $1.75
The row above is the assumed return of the OZM funds. The left column is the AUM. Assumptions are 1% management fee, 20% incentive fee, 56% economic income margin (excluding equity-based comp expense) and $100 million/year in equity-based comp expense.
It shows you that it doesn't take much for adjusted economic income per share to get back up to closer to $1.00, and can maintain $0.45/share even in a $30 billion AUM and 5% return scenario making the current stock price cheap even under that scenario.
Conclusion Having said all that, there is still a lot of risk here. Low returns and low bonuses can easily make it hard for OZM to keep their best people. But if their best people perform, I assume they do get paid directly for their performance so that shouldn't be too much of an issue.
A lot of the lower returns in recent years is no doubt due to their higher AUM. But it is also probably due to crowding of the hedge fund world and low interest rates leading to an overall lower return environment for all.
If you think these things are highly cyclical, then you can expect interest rates to normalize at some point. Money flowing out of hedge funds should also be good for future returns in these strategies. The part of lower returns at OZM due to higher AUM may not reverse itself, though, if OZM succeeds in maintaining and increasing AUM over time.
But even without the blowout, high returns of the 1990's, OZM can make decent returns over time as seen in the above table.
In any case, unlike a few years ago, the stock prices of many alternative managers are cheap (and I demonstrated how cheap OZM might be here) and institutional money seems to be flowing out of these strategies.
So: OZM is cheap and is in a seemingly universally hated industry Money is flowing out of these strategies, particularly performance chasing institutions (that you would often want to fade) there is a bear market in active managers and bubble in indexing (which may actually increase opportunities for active managers) value spreads are wide and has been widening for years making mean reversion overdue etc. These things make OZM a compelling play on these various themes.
I would treat this more like an option, though. Buy it like you would buy an option, not like you would invest in, say, a Berkshire Hathaway.
There are a lot of paths here to make good money, but there are also plenty of ways to lose. If you look at this like a binary option, it can be pretty interesting!
Posted by kk at 8:11 PM No comments: Links to this post Email This BlogThis! Share to Twitter Share to Facebook Share to Pinterest
Labels: OZM
Saturday, October 29, 2016 Gotham's New Fund Joel Greenblatt was in Barron's recently. He is one of my favorite investors so maybe it's a good time for another post.
Anyway, this new fund is kind of interesting as I am sort of a tinkerer; this is like the product of some financial tinkering. I don't know if it's the right product for many, but we'll take a look.
But first, let's see what he has to say about the stock market in general.
The Market Greenblatt says that the market is "expensive". The market is in the 21st percentile of expensive in the past 25 years. Either a typo or he misspoke, he is quoted as saying that the market has been more expensive 79% of the time in the past 25 years. Of course, he means the market has been cheaper 79% of the time.
The year forward expected return from this price level is between 2% to 7%, so he figures it averages out to 4% to 6% per year. In the past 25 years, the market has returned 9% to 10%/year so he figures the market is 12% to 13% more expensive than it used to be.
He says: Well, one scenario could be that it drops 12% to 13% tomorrow and future returns would go back to 9% to 10%. Or you could underearn for three years at 4% to 6%. We're still expecting positive returns, just more muted. The intelligent strategy is to buy the cheapest things you can find and short the most expensive.
But... Immediately, bears will say that this 25 year history is based during a period when interest rates went down. The 10 year bond rate was around 8% back in 1991, and is now 1.8%. In terms of valuation, this would have pushed up asset values by 6.2%/year ($1.00 discounted at 8%/year then and $1.00 discounted by 1.8% now).
Declining rates were certainly a factor in stock returns over the past 25 years. Of course, the stock market didn't keep going up as rates kept going down. The P/E ratio of the S&P 500 index at the end of 1990 was around 15x, and now it's 25x according to Shiller's database (raw P/E, not CAPE). So the valuation gain over the 25 years accounted for around 2%/year of the 9-10% return Greenblatt states.
Here are the EPS estimates for the S&P 500 index according to Goldman Sachs:
2016 $105 20.4x 2017 $116 18.5x 2018 $122 17.6x
Earnings estimates are not all that reliable (estimates have been coming down consistently in the past year or so). But since most of 2016 is done, I suppose the $105 figure should be OK to use.
I don't know if it's apples to apples (reported versus operating etc.), but if we assume the 'current' P/E of the market is 20x, then the valuation tailwind accounted for 1.2%/year of the 9-10%. But then of course, even if this was a fair comparison, there is still the aspect of lower interest rates boosting the economy by borrowing future demand (and therefore overstating historical earnings).
In any case, one of the main bearish arguments is that this interest rate tailwind in the past will become a headwind going forward. Just about everyone agrees with that.
But as I have mentioned before, calling turns in interest rates is very hard, Japan being a great example. If you look at interest rates over the past 100 years or more, you see that major turns in trend don't happen all that often; it's been a single trend of declining rates since the 1980/81 peak, basically. What are the chances that you are going to call the next big turn correctly? I would bet against anyone trying. OK, that didn't come out right. I wouldn't necessarily be long the bond market either.
Gotham Index Plus So, back to the topic of Gotham's new fund. It is a fascinating idea. The fund will go long the S&P 500 index, 100% long, and then overlay a 90%/90% long/short portfolio of the S&P 500 stocks based on their valuations.
The built-in leverage alone makes this sort of interesting. Many institutions may have an allocation to the S&P 500 index, and then some allocation to long/short equity hedge funds. The return of the Gotham Index plus would be much higher (when things go well).
I think this sort of thing was popular at some point in the pension world; index plus alpha etc. Except I think a lot of those were institutions replacing their S&P 500 index portfolios with futures positions, and then using the cash raised to buy mortgage securities. Of course, when things turned bad, oops; they took big hits in S&P 500 futures, tried to post cash for the margin call and realized that their mortgage funds weren't liquid (and was worth a lot less than they thought).
Or something like that.
There is risk here too, of course. You are overlaying two risk positions on top of each other. When things turn bad, things can certainly get ugly.
I think Greenblatt's calculation is that when things turn bad, the long/short usually does well. I haven't seen any backtests or anything, so I don't know what the odds of a blowup are.
Expensive stocks tend to be high-beta stocks and cheaper stocks may be lower beta, so in a market correction, the high-beta, expensive names may go down a lot harder.
To some extent, lower valuations may reflect more cyclicality, lower credit risk / lower balance sheet quality too so you have to be a little careful. In a financial crisis-like situation, lower valuation (lower credit quality) can tank and some higher valuation names may hold up (like the FANG-like stocks).
But Greenblatt's screen is not just raw P/E or P/B, but is tied to return on capital, so maybe this is not as much of an issue compared to a pure P/B model.
The argument for this structure is that people can't stay with a strategy if it can't keep up with the market. Here, the market return is built in from the beginning and you just hope for the "Plus" part to kick in. In a long/short portfolio, the beta is netted out to a large extent so can lower potential returns. This fixes that. But there is a cost to that.
In any case, I do think it's a really interesting product, but keep in mind that it is a little riskier than Gotham's other offerings.
Oh, and go read the article on why this new fund is a good idea. Greenblatt is always a great read.
Chipotle (CMG) Well, Chipotle earnings came out and it was predictably horrible. The stock is not cheap so it hasn't been recommendable in a while, but I really like the company. There was a really long article on them recently which was a great read. It didn't really change my view of them all that much. I think they will get a lot of business back, eventually.
The earnings call was OK, but what was depressing about it was that they decided to ditch Shophouse. I don't think any analysts asked about it so it was a given, I guess. I had it a couple of times in DC and liked it and was looking forward to it in NY, but I guess that's not going to happen. As an investor, that was not baked into the cake, I don't think, even though there was probably some hope that the CMG brand can be extended into other categories.
This puts a lot of doubt into that idea. Someone said that brand extensions in restaurants/retail never work, and that has proven to be the case here. I wouldn't get too excited about pizza and burgers either. Burgers are really crowded now and will only get more so.
If CMG has to look to Europe for growth, that is not so great either as the record of U.S. companies expanding into Europe is not good. I would not count on Europe growth.
Anyway, this doesn't mean it's all over for CMG. I think they will come back, but there are some serious headwinds now other than their food poisoning problem; more competition etc. They were the only game in town for a while, but now everyone seemingly wants to become the next Chipotle, so there are a lot of options out there now.
As for Ackman's interest in CMG, I have no idea what his plan is. There is no real estate here as CMG rents all their restaurants, and their restaurants had high 20's operating margins at their peak. I don't know if they will ever get back up there, but it's not like these guys don't know how to run an efficient operation. Maybe Ackman sees SGA opportunities, but pre-crisis, SGA was less than 7%, so there wouldn't be that much of a boost from cutting SGA. Or maybe he thinks it's time for CMG to do what everyone else is doing and go for the franchise model. Who knows? I look forward to seeing what his thoughts are; hopefully some 500 page presentation pops up somewhere...
McDonalds I don't want to turn this into a food blog, but I can't resist mentioning this. I have been a lifelong MCD customer; I have no problem with it. OK, it may not be my first choice of a meal in most cases, but it's fine. And when you have a kid, you tend to go more often that you'd like. But still, it's OK. It is what it is, right?
I like the remodelling that they are doing, and the fact that they have free wifi is great too. But here's a big clustermuck they had with their recent custom burger and kiosk idea. I walked into a MCD without knowing anything about any of this recently. A lady said I can order at the kiosk and I said, no, I'll just go to the counter, thank you.
And I waited 10 minutes or so in line, looking up at the tasty looking special hamburgers on the HD, LCD menu board. It was finally my turn at the cash register and I said I want that tasty looking hamburger up there on the screen. And the lady said, oh, you can only order that at the kiosk. I was like, huh? That was really annoying. So I wait all this time and I can't get what I want; I have to walk all the way back and get in another line again? Come on! At that point, I didn't want any other burger so I just ordered a salad (and the usual for my kid).
OK, so it's my fault, probably. User error. But as a service company, as far as I'm concerned, that was a massive fail on the part of MCD.
OK, Now That I started... And by the way, since I got myself started, let me get these two out too. Yes, I spend too much time at fast food joints. Guilty. But still, here are my two peeves related to two of my favorite fast casual places:
Shake Shack: Being dragged there all the time, I have learned to love the Shack-cago hot dog. Chicken Shack is awesome too, in case you don't want to eat hamburgers all the time. But I can't tell you how often they get take-out and stay wrong. I had a long run where they didn't get it right at all and had to ask for things to be packed to go. It is really annoying and wastes everyone's time.
Chipotle: This hasn't happened to me the last couple of times, but this is the usual conversation that happens to me just about every time I go to Chipotle.
CMG: "Hi, what can we get you today?" (or some such) Me: "Um, I'll have a burrito..." CMG: putting the tortilla in the tortilla warmecooker, "and would you like white rice or brown rice? Me: "White rice is fine" CMG: with tortilla still in the cooker, "and black beans or pinto beans?" Me: "black beans". CMG: laying a sheet of aluminum foil on the counter and placing the tortilla on it, moving over to the rice area, "Was that white rice or brown rice?" Me: "white rice" CMG: sliding over to the beans, "and black beans or pinto beans?". Me: "black".
I can't tell you how many times this exact thing happened to me. If you can't remember what I say, don't ask beforehand! Just ask when we get to whatever you are going to ask me about! This is not rocket science, lol... Incredibly annoying.
Anyway, I still love CMG and will keep eating there.
Oh, and to make things interesting, I decided to post a contact email address in the "about" section of the blog. I will try to respond to every email, but keep in mind I may not look in that email box all the time.
I will try to post more, though. (read original with tables)
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