Managing Expectations

I would love to tell you that I have returned from a relaxing two week vacation on an island paradise but then I would be lying. Pretty much everything that could have gone wrong during this trip in fact did go wrong. At times it felt like we should have changed our last names to Murphy. Does that mean we didn’t have a great time? Of course not! Because as with everything in life, and particularly when it comes to trading, the path to success lies in managing your expectation and your actions.

Now that I’ve stimulated your curiosity (old sales trick) I may as well share some of the sordid details of our Tenerife train wreck. We arrived late on the 8th at around 1:00am and then drove up towards Vilaflor where we had rented an airbnb property which was advertised as a ‘beautiful relaxing forest villa’. And at first sight that’s exactly what we seemed to be getting. During the check-in I tested the Internet and lo and behold it was actually working, making it one major concern being crossed off the list. Exhausted we went straight to bed ready to enjoy some much needed quiet time for the next 10 days.

Forest Villa From Hell

When we woke up we quickly realized however that the veranda of the villa was facing what later turned out to be a large bottling plant which was emitting an constant hum generated by industrial size air conditioning units mounted to its roof. It completely drowned out the chirping of the birds and the rustling of the wind in the pine trees surrounding us. We immediately notified our host via whatsapp who told us that it was probably due to the hot weather and that this was the first time he had heard about this. Suffice to say of course that the words ‘bottling plant’ or ‘industrial A/C unit’ had not been part of the airbnb listing.

Curiously however none of the reviews in the listing ever mentioned noise as a problem either. Which was a bit of a puzzler for both me and my wife. We live in the center of Valencia which is probably one of the noisiest cities in the second noisiest country on earth (only beaten by Japan). So a slight humming would have been forgivable but what we had to endure for the remainder of our time there was most definitely smack middle in the ‘vacation ruining’ category.

You Are Being Watched

The second bad surprise happened shortly after when I realized that all the hallways of the house had been plastered with video cameras. This really shocked me a little as I would never have expected this in an airbnb rental. You’d put up with external cameras to some extent but who wants to potentially be filmed running around naked in your house during vacation?

We actually wound up putting tape on top of the lenses but could never really shake the feeling that we somehow may be watched or recorded. After all cameras are tiny these days and a host who doesn’t think twice about putting up large cameras may just feel entitled to sneak in a few into your bedroom or bathroom as well.

One thinks that all this would be more than sufficient ground for cancellation, however due to our late check-in time we waited until later in the afternoon to file a complaint with airbnb. And that put us beyond the initial 24 hour period for reimbursements. Not that it would have really helped us as the entire island was booked out and the only remaining rentals were undesirable to put it kindly. I did file a claim with airbnb which is still being reviewed but I very much doubt I will see much if any of my money back. And quite frankly it’s not really about the money – it’s about being lied to and cheated out of what was supposed to be a quiet vacation in a forest paradise.

The Beauty Of Tenerife

We could have let this ruin our vacation but in the end we decided to simply travel around the island as much as possible and explore many of the micro climates Tenerife has to offer. A few snapshots for you nature lovers:

This is a panorama shot I took while we were hiking through the center of the volcanic crater of El Teide. It really looks like we’re on the moon but there are signs of wildlife all over the place.

A different perspective taken from higher up. You can actually see the edges of the old crater further in the distance. The air is incredibly pure and when I saw some tourist stand there with a cigarette in his mouth I felt compelled to walk over and give him a swift kick in his family jewels.

Here’s a view taken at about 5,500 feet (1500 meters) around sunset as we were descending from the high plateau of the volcano. It’s a lot more breathtaking when you actually see it flow into the mountainside.

A similar view taken a day earlier. As you can see there was quite a bit of cloud cover down below but as soon as you ascended to over approximately 4,500 feet you were greeted by blue skies. In Tenerife it’s always sunny somewhere they say, if you’re mobile you can pick your weather.

Near our village things were of course a bit more temperate. My wife took this shot near the villa where we stayed the first ten days.

Just a few kilometers over to the West and you are at Masca which has its own unique majestic beauty. Which I am not showing here (you can find a ton of great shots on Google) – instead here’s a snapshot of a surprise rainbow which presented itself on our last day before we left. A magical moment indeed.

By the way I actually did the canyon hike in Masca up and down and it almost killed me. On the way up my legs were literally giving out on me as I was severely dehydrated despite having brought along 1.5 liters of water. Fortunately some young German kid strolled by and offered me some of his otherwise I may have just dropped off some cliff. Well, not the worst place to die if you ask me.

But Wait There’s More

After our initial ten days I was supposed to be training with some Ukrainian Systema expert in Los Gigantes. In order to be nearby and to safe myself a lot of driving we had decided to rent an apartment in one of those typical anthill complexes near the coast. Now once again we checked in and everything seemed fine until we started to hear loud construction noise coming from the beach.

There’s a reason why I choose the silly beach shot as the featured image of this post. May look just fine at first sight but if you look a bit closer…

Yes, that’s right there’s currently a major construction project right in front of the local beach and it just so happens to be facing our balcony as well. Oh joy… but in this case not something I would bother airbnb with as the timing of major construction projects clearly is outside the control of the host.

Just a 200 meters down however we took this snapshot during sunset during the weekend. I actually took a few dozen shots of the scene as I felt like I was on some surreal Star Trek set.

The Guru

When I showed up at training the first day I immediately had a bad feeling about this supposed Systema master. It’s not that he wasn’t experienced as I had technically vetted him beforehand, but I quickly got an impression that he was suffering from a what I call a ‘guru complex’, which is something I have unfortunately come across several times in over 25 years of studying various types of martial arts. He put me through an extended questionnaire of what my life goals were and then engaged in some strange psycho-analysis which really rubbed me the wrong way. I shot back a few times that I was there for hands on training, but it quickly became clear that the guy had found enlightenment and wasn’t shy of berating anyone who didn’t see things his way. To make a long story short, on the second day I basically told him that he was full of shit, that he was wasting my time, and that it wouldn’t work out, then I simply walked away. I really should have not paid that guy in advance, but my time and mental equilibrium are more valuable than anything else.

It’s Not All Bad

We actually had a bit of luck as well as we forgot to reserve a spot on the gondola leading up to the 12,000 feet peak of El Teide. And would you believe it, the darn thing got stuck due to high winds and they had to extract the passengers with a helicopter after being stuck there for hours on end. When we drove by on our way back from a hike that very day we saw a bunch of emergency vehicles, local police, ambulances, etc. and the access to the cable car was blocked off. My wife would have probably eaten everyone on board, so I guess we all got away easy.

Lessons Learned

The lessons we learned on this trip (once again): First up you really never know what to expect no matter how well in advance you plan your trip. People always lie in listings and once you there your options are severely limited. Of course due to the mutual rating system in airbnb you will rarely see a negative review, rendering the entire exercise a complete waste of time. In the future I will simply ask my host some very directed questions in advance in order to establish precedence and hopefully be able to argue a strong case in case things go wrong.

But instead of dwelling on the negative I am glad that we simply focused on the positive and moved on. It’s just like being in a very promising campaign and suddenly Yellen lets off a brainfart and you are instantly deprived of several R of paper profits. That’s trading and most certainly that is an aspect of life as well. You cannot change or prepare for things outside your control, so you just have to roll with them.

Secondly – you are not special. There were many times when we felt we were being treated badly or unjustly during our trip. Due to the influx hundreds of thousands of unruly tourists each year customer service in Tenerife has adjusted itself to a mixed international clientele, much of which often borders the abusive and clueless. So if you look like a tourist then you most certainly will be treated like one, even if you happen to speak Spanish fluently. This is one of the aspects of tourism I hate the most and the reason why I usually choose to stay off the beaten track. People further up in the center of the island were extremely lovely I’m glad to say.

Finally, it’s always great to be back. No matter how amazing your vacation there’s no place like home, your own bed, your own kitchen, your entertainment setup, your garage with your tools, your neighborhood, your gym, and your friends. It’s the little things we all take for granted we should value the most.

Credits

I would be amiss if I did not extend my most sincere thanks to Scott ‘The Convict’ Phillips who didn’t just do a bang job filling in during my absence but actually produced such excellent material that apparently everyone was starting to dread my return. Curiously there actually was an increase of new sign-ups during my time away which took me a bit by surprise. Apparently a focus on educational material and in particular systemic trading seems to be valued a lot more than I had anticipated. Which is excellent news as there are literally a myriad of topics we could be covering moving forward as I am not exactly a stranger to that domain.

What Do You Want To See?

So the question I would like to put forward is what exactly you guys would like to see covered here in the future. There’s certainly a lot we could share. Please use the comment section to discuss your thoughts on the topics suggested below:

• System Trading
  • Theory
  • Backtesting / Forward Testing
  • Asset Classes
  • Mean Reversion and Stationarity
  • Cointegration
  • Trend/Momentum Strategies
  • Campaign Management
  • Volatility
  • Market Cycles
• Leverage, Position Sizing
  • Scaling In
• System Programming
  • NinjaTrader Introduction
  • Python Introduction
  • Quantopian Introduction
  • QuantConnect Introduction
• Hands-on System Building
  • System Ideas & Implementation
  • RAW Edge Parsing
• Tape Reading

I could go on but this should get you guys started. I would also like you to share which posts you enjoyed the most during my absence. For your convenience I have added Scott’s posts to the ‘popular‘ and ‘system trading‘ category so that you can easily find them in the future.

P.S.: I forgot to mention that I backed my rental car into a wall in our driveway. Fortunately I had purchased full insurance. As the old saying goes: Only the paranoid survive