GLOBAL MACRO INVESTMENT MANAGER

WHAT WE DO

About Vishni Capital

We are a discretionary macro investment management firm specializing in managed futures.

We are a licensed and registered Commodity Trading Advisor (“CTA”) which manages external and internal capital through our flagship strategy, Vishni Progression One

WHY VISHNI?

Vishni Capital Advisors LLC was launched out of a desire to create an investment management firm which more proactively studies and embraces intermediate-term market cycles

Most modern day investment management firms fall under one of the following three umbrellas:

Buy & Hold

PROS

  • Low cost
  • Easy for any investor to do using ETFs and index funds
  • Ability to compound savings over a long time-frame during bull markets

CONS

  • Tethered to the random timing of the allocations & rebalances
  • Tied to the perpetual performance of one or two broad asset categories
  • Success reliant on correctly identifying and maintaining faith in a very long-term cycle
  • Pressure to always be 100% invested
  • Requires investor to psychologically manage potentially severe and prolonged drawdowns

Long/Short Active Management

PROS

  • Can result in a reduced correlation to the overall market
  • Allows a skilled manager to demonstrate ability to pick securities and put up a better risk adjusted return than market benchmarks
  • Ability to adjust portfolio weightings to provide protection during market downturns

CONS

  • Wrought with fundamental bias and loose risk management if price action contradicts the manager’s thesis
  • Potential for liquidity issues in exiting and entering more thinly traded securities
  • High potential costs associated with fund administration fees, commission costs, margin interest and short borrow fees
  • Pressure to always be 100% invested
  • No guarantee that short positions will provide an appropriate hedge to long positions

Quantitative Trend Following

PROS

  • No directional bias gives the ability to profit in up and down markets
  • Uncorrelated to traditional asset classes
  • Longer-term duration avoids competition with most day traders/HFTs

CONS

  • Signals can be late stage and require protracted cycles to succeed
  • This results in the manager needing to either use smaller position sizes with wide stops or withstand higher portfolio drawdowns
  • Positions can be crowded as many other speculators are pursuing the same signal
  • Oftentimes get stuck buying at or near major highs and/or selling at or near major lows

While being aware that any investment model will have its own unique set of weaknesses, we sought out to create a different one that could be:

Agnostic

to the magnitude and direction of any single market

Patient

and willing to sit in cash and miss out on trends that were not forecasted

Adaptable

enough to quickly alter positions when proven wrong

Sustainable

enough to carefully manage gains & losses to grow at a gradual rate over the long-term

These core values helped lead to the creation of our flagship investment program: Vishni Progression One

All through time people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance and hope. That is why the numerical formations and patterns recur on a constant basis.

Jesse Livermore

Philosophy

A commonly held view among investors is:

Historical prices have zero bearing on future prices

We believe this to be somewhat true. A better way to phrase it would be:

Stagnant charts and historical data are not dependable for providing price predictions¹Brandt, Peter L. "Philosophy of Charting." Factor LLC (10 Mar. 2015): n. pag. Print.

However, we do believe that strong trends tend to support Newton’s First Law of Motion¹Brandt, Peter L. "Philosophy of Charting." Factor LLC (10 Mar. 2015): n. pag. Print.  which states:

Objects in motion tend to remain in motion. While objects at rest tend to remain at rest.

Therefore, if one has a way to quantify and define the characteristics of trends, it pays to selectively buy the strongest ones and sell the weakest ones as they become properly displaced because of the likelihood of immediate follow through.

Given the aforementioned lack of predictive dependability with historical data, the key to such an approach is to be able to:

  1. Quickly recognize when a trend forecast is incorrect and control losses
  2. Quickly recognize when a trend forecast is correct and maximize gains
  3. Implement rigorous money management rules so that the system can withstand several incorrect forecasts in a row while still being sufficiently profitable over the long run

These qualities are central to our process and crucial to the success of our program.

I try to form many different mental pictures of what the world should be like and wait for one of them to be confirmed. You keep trying them on one at a time. Inevitably, most of these pictures will turn out to be wrong — that is, only a few elements of the picture may prove correct. But then, all of a sudden, you will find that in one picture, nine out of ten elements click. That scenario then becomes your image of the world reality…

Bruce Kovner

Program Highlights

Low Correlation

Given our ability to go long or short along with the luxury of being selective and patient, we expect to exhibit very low correlation when compared to any other asset class over the long term

Strong Risk Management

At Vishni, we understand just how difficult it is to recap major losses. As a result, we set a hard cap on monthly losses and use stop orders on all positions at all times

Highly Liquid

The markets we trade allow us to exit positions and return to cash nearly 24 hours a day/5 days a week. We never feel the need to be fully invested at all times and have no problem holding heavy cash positions during uncertain periods

Incentive Fees Only

Management fees can be a significant and unjustified drain on an investment account. Forgoing a guaranteed fee keeps our interests in line with yours and pushes us to constantly ensure that we are protecting and growing your capital safely

Low Margin Usage

We tend to be selective with the positions we pursue and we only stick to the most widely traded contracts. Those factors combined with an avoidance of the options market allow us to meet our objectives while utilizing an average daily margin utilization of under 10%

Strong opinions. Weakly held.

Peter Brandt

Our Process

 

At Vishni, we view all markets as fractal in nature. In other words, the juxtaposition of current prices in relation to historical prices as viewed through differing units of time can oftentimes reveal valuable information about the strength of a market’s trend.

While we conduct our own fundamental research to try to get a sense of what future news catalysts could impact a market trend, we always adhere to price action first and foremost. We tend to achieve the greatest risk/reward opportunities when the two forms of analysis align concurrently.

We use the market as a guide and try to listen to what it is saying. We believe the best way to study, quantify and capture trends in the futures markets is through the prism of what we define as progressions

Through years of investment, back testing and live testing, we created our proprietary Progression System. This system is not a magical black box, but rather a framework based on math and historical pattern recognition. We use it to guide us and protect us as we seek out strong risk/reward opportunities which we believe support our theses on the overall macro climate.

The system is constantly evolving and responding to market changes, which we believe gives it a distinct advantage over linear, rules based systems. Nevertheless, we understand its weaknesses and have implemented rigorous risk management standards with the goal of preserving investors’ capital through drawdowns and periods of uncertainty.

Our process begins by using the system to back test many of the most widely traded macro futures contracts. Historical price data is analyzed per market and per fractal to verify that there are numerous occurrences of strong and smooth trends each year in either direction.

This is the current universe of futures contracts we track and trade¹We are always searching for new products to add to our tracking list. However, given the vast number of opportunities available within this existing set , we are hesitant to add new contracts unless we can confidently demonstrate a repeatable edge. :

Price data of the nearest month futures contract for each product is updated daily in our models to document changes in the open/high/low/close prices for the following fractal levels:

process2

We then overlay several additional studies and indicators on top of the underlying price data in each market in an attempt to answer the following questions:

  1. Which way is the current trend for each fractal level?
  2. How strong is each trend?
  3. Which markets are exhibiting the strongest long-term trends right now?
  4. Does there appear to still be room to run in the direction of the long-term trend? Is there anyway to calculate some sort of realistic target to understand what the possible reward can be if successful?
  5. How is current sentiment per market? What known fundamental events are upcoming in the following weeks/months which could influence the price path?
  6. Where is the path of least resistance?

When enough of our signals line up to allow us to confidently answer those questions and create a near-term thesis, we then wait for the final confirmation signal. While at times we will enter a strong trend that is already in progress,  the most successful signals tend to occur after a swing reversal or a key breakout in the direction of the thesis on a daily time series.

Next our system tells us where the initial stop loss level should be placed. Using this stop loss level, we calculate how much we are willing to risk on this trade. That provides us with the position size for this trade. Once determined we move immediately and place block orders to enter the trade as close to the current market price as possible.

 

Our goal is to always be completely agnostic to the outcome of any single trade thesis. Therefore, we aim to risk no more than 0.5-1.0% of nominal trading capital on any one position.

After we are in a trade, it is monitored on a daily (and sometimes hourly) basis. While entries and stop losses are systematic, profit targets invoke more discretion.

Our focus is on preserving capital yet maximizing gains. This is an inherent contradiction and a tricky balancing act which requires thoughtful management, experience and self-awareness.

Perfomance

Disclaimer

ALL INVESTING COMES WITH THE RISK OF LOSING MONEY. PLEASE CAREFULLY REVIEW THIS WEBSITE DISCLAIMER AND VISHNI CAPITAL’S DISCLOSURE DOCUMENTS PRIOR TO INVESTING.

VISHNI CAPITAL ADVISORS LLC IS REGISTERED AS A COMMODITY TRADING ADVISOR WITH THE COMMODITY FUTURES TRADING COMMISSION (CFTC). VISHNI CAPITAL’S INVESTMENT MANAGEMENT SERVICES ARE INTENDED EXCLUSIVELY FOR QUALIFIED ELIGIBLE PARTICIPANTS. TO BE ELIGIBLE TO INVEST IN THIS PROGRAM YOU MUST BE CONSIDERED A QUALIFIED ELIGIBLE PERSON UNDER THE TERMS AND CONDITIONS DEFINED BY COMMODITY FUTURES TRADING COMMISSION REGULATION 4.7. PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS WEBSITE AND ASSOCIATED DISCLOSURE DOCUMENTS ARE NOT REQUIRED TO BE, AND HAVE NOT BEEN, FILED WITH THE COMMISSION.  THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE.  CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS WEBSITE OR THE ACCOUNT DOCUMENT. FOR A FULL EXPLANATION OF WHAT IS REQUIRED TO BE A QUALIFIED ELIGIBLE PERSON UNDER THE REGULATION PLEASE CONTACT VISHNI CAPITAL ADVISORS LLC DIRECTLY.

THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.

THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. IN SOME CASES, MANAGED COMMODITY ACCOUNTS ARE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT AND ADVISORY FEES. IT MAY BE NECESSARY FOR THOSE ACCOUNTS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THE DISCLOSURE DOCUMENT CONTAINS A COMPLETE DESCRIPTION OF THE PRINCIPAL RISK FACTORS AND EACH FEE TO BE CHARGED TO YOUR ACCOUNT BY THE COMMODITY TRADING ADVISOR (“CTA”).

THE REGULATIONS OF THE COMMODITY FUTURES TRADING COMMISSION (“CFTC”) REQUIRE THAT PROSPECTIVE CUSTOMERS OF A CTA RECEIVE A DISCLOSURE DOCUMENT WHEN THEY ARE SOLICITED TO ENTER INTO AN AGREEMENT WHEREBY THE CTA WILL DIRECT OR GUIDE THE CLIENT’S COMMODITY INTEREST TRADING AND THAT CERTAIN RISK FACTORS BE HIGHLIGHTED. THIS BRIEF STATEMENT CANNOT DISCLOSE ALL OF THE RISKS AND OTHER SIGNIFICANT ASPECTS OF THE COMMODITY MARKETS. THEREFORE, YOU SHOULD PROCEED DIRECTLY TO THE DISCLOSURE DOCUMENT AND STUDY IT CAREFULLY TO DETERMINE WHETHER SUCH TRADING IS APPROPRIATE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. YOU MAY ALSO REQUEST DELIVERY OF A HARD COPY OF THE DISCLOSURE DOCUMENT, WHICH WILL ALSO BE PROVIDED TO YOU AT NO ADDITIONAL COST. THE CFTC HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN ANY OF THESE TRADING PROGRAMS NOR ON THE ADEQUACY OR ACCURACY OF ANY OF THESE DISCLOSURE DOCUMENTS.

AS WITH ALL TRADING STRATEGIES, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

PLEASE ACKNOWLEDGE YOUR UNDERSTANDING OF THIS IMPORTANT STATEMENT BY CLICKING THE ‘I ACCEPT AND ACKNOWLEDGE’ BUTTON BELOW.

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Advisory Team

Rudy Karsan

KEY ADVISOR

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