1/x Long tails in #exploration If you invested 100K AUD into each of 110 #ASX #discovery announcement containing "significant" or "major" discovery between 2010-2021 and held them for 1 year, you would have made 4.06 MAUD in profits. Sounds great right? #mintwit #mining

2/x In april 2014 your strategy is 500K below water. You get up in the morning to make a strong cup of coffe and smash another 100K on the table on the next "significant discovery". The investment you just made will go on to lose 98.8% of its value over the next 12 months.

3/x So where does the 4 mln in profit come from? Your 10 best investments alone will have produced all of your profits with an avg. return of 412 %. The best one yielding 791%. The other 100 will only break even. Its a game of catching the long tails. #copper #nickel #gold

4/x Investing in natural resources is not for the fainthearted. But you dont need to be complete deardevil to make success. @equivestinvest and I have built a database of price-data and fudamentals for +160K instruments over all asset classes and 29 countries.

5/x We will combine #geology and #quant #trading to separate the winners from losers. We built a strategy with 30% per trade with a 70% win rate. Things can and will go wrong between backtesting and acutal trading. Follow me to see if we succeed or fail!

@StrategiesQuant 30% per trade? Why 30% instead of using something like the Kelly criterion to optimize the trade?

@StrategiesQuant Especially for oil and gas plays which often have binary outcomes

@witchdoc86 I like the idea of using Kelly criterion to sieze positions. In the backtest i just assumed to allocate equal amount to every trade without compounding.