Why a Public Track Record Changes Everything (and How to Read Anyone Else's)

Screenshots of spectacular gains cost nothing to produce. You only ever see the position that worked, over the period that suits. They prove nothing — and yet they convert, which explains their abundance.

The only serious proof is a dated, continuous and complete record, losses included.

Three biases that inflate published performance

Survivorship bias

Measuring a strategy on the companies that still exist today mechanically erases bankruptcies and delistings. The result is flattering and false. An honest record includes the companies that disappeared along the way.

Look-ahead bias

Using data published after the fact to justify a past purchase is the most common amateur backtesting error. Annual accounts are not known on 31 December: they appear weeks later. A serious backtest is point-in-time — it uses only the information genuinely available at each decision date.

The chosen period

Every strategy has its favourable window. A record starting precisely at the March 2009 low tells you more about the start date than about the method. Insist on complete, consecutive calendar years.

Questions to ask before paying

• Does the period cover at least one full bear market?
• Are transaction costs and slippage deducted?
• Were the entry and exit rules published before the measured period?
• How many positions, and at what rebalancing frequency?
• Are the simulated portion and the genuinely tracked portion distinguished without ambiguity?

That last question is decisive. A backtest remains a simulation, however rigorous. Presenting it as a live record is, at best, negligence.

The four numbers that actually matter

A track record never reduces to a single figure — and the one pushed hardest is precisely the least informative.

Cumulative return

This is the advertising number: "+185%". It says nothing until you know over how long. +185% in three years and +185% in fifteen describe neither the same strategy nor the same risk.

Annualised return

The average compounded return per year. It is the only figure that lets you compare two methods, because it neutralises duration. When a pitch shows a spectacular cumulative figure but omits this one, the omission is rarely accidental.

Maximum drawdown

The gap between the highest point reached and the low that followed. This is the number that decides whether you will hold on. A strategy with an excellent annualised return but a 60% maximum drawdown will be abandoned by almost everyone who follows it — and abandoned at the worst possible moment, namely the bottom.

Recovery time

How many months to regain the previous peak. Two strategies with identical maximum drawdowns are not comparable if one returns to its high in eight months and the other in six years.

What we publish, and how

Our model portfolios are mechanical: entry, exit and rebalancing rules are written down and public. Nobody picks a line by hand, which makes the record reproducible by a third party — the only test that counts.

Our history rests on a point-in-time backtest, labelled as a simulation, with live tracking from launch onwards. Drawdowns are shown alongside the gains, because no strategy exists without bad periods, and a strategy showing none is lying.

The ultimate test: reproducibility

A method whose rules are published can be recalculated by a third party. It is the only check that does not depend on the seller's good faith. If nobody, even given time and effort, can redo your calculations, your track record is not evidence: it is an assertion.

Ask the question plainly: given your rules and public data, would an attentive reader arrive at the same ranking you did? The answer sorts methods from sales arguments remarkably fast.

This is also why any element of human selection, however small, changes the nature of what is being promised. The moment a manager "adjusts" a position, the record stops being that of a method and becomes that of a person — which you can neither verify nor reproduce, and which walks out of the door the day they do.

There is a second, quieter benefit. Rules written in advance protect the person applying them. In a drawdown, the temptation to intervene is overwhelming, and it is precisely then that discretionary decisions do the most damage. A published rule removes the question.

Transparency is not merely a moral posture: it is the one competitive advantage no marketing copy can imitate. A competitor can copy your method. They cannot copy ten years of history published in the open.

This article is information and education. It is not personalised investment advice. Past performance is not a guide to future performance. Investing carries a risk of capital loss.