01
New Income
Money that comes in
neutral.farm
Be the house.
Hedge fund strategies for retail traders
Delta neutral
Yield
Compound
02
Buy Assets
Buy assets such as SPYx
03
Assets Compound
Average return target: 10-12%
04
Lend Assets
Put productive assets to work
05
Borrow USDC
Borrow USDC with assets as collateral
06
Spend or Reinvest
Use for expenses or reinvest
01
New Income
Money that comes in
02
Buy Assets
Buy assets such as SPYx
03
Assets Compound
Average return target: 10-12%
04
Lend Assets
Put productive assets to work
05
Borrow USDC
Borrow USDC with assets as collateral
06
Spend or Reinvest
Use for expenses or reinvest
Drawdown Math
Protect capital.
When capital falls, the recovery required is larger than the loss. This is why downside control matters before upside chasing.
“Rule No. 1: Never lose money.
Rule No. 2: Never forget Rule No. 1.”
To Break Even
| Loss | Gain Needed |
|---|---|
| -5% | +5.3% |
| -10% | +11.1% |
| -20% | +25% |
| -30% | +42.9% |
| -40% | +66.7% |
| -50% | +100% |
| -60% | +150% |
Recovery Curve
Required gain rises faster as losses deepen.
-50% = +100%
small losslarge loss
Compounding
Compounding effect.
Compounding rewards patience. The same return becomes more powerful as the base gets larger.
$250k at 15%
$1Mafter 10 years
Start
$250k
base
Year 3
$380k
1.52x prev
Year 5
$503k
1.32x prev
Year 7
$665k
1.32x prev
Year 10
$1.01M
1.52x prev
Outperform By Doing Less
Invest smart not hard.
Most active managers fail to beat the S&P 500 over long periods.
10-year odds
~1/10
Large-cap active funds that beat the S&P 500 over a decade.
Source: S&P Dow Jones Indices SPIVA U.S. Scorecard
Active Managers vs S&P 500
Most active managers lag the benchmark over time.
10 years
year 0year 10