As you know, last month – September 2022 – EPG was the winner of the DarwinIA contest. Yeah it was the first of the DarwinIA Winners in September list. Didn’t you know? Come on, look at my last post.
Apart from the fact that I am very excited to receive a generous investment from Darwinex and being on top of great traders for a month. I was thinking…
What has happened to the last winners of the DarwinIA contest?
I tried to get some numbers from the Darwinex platform but unfortunately there isn’t any filter to get the data I want. A pity because now I’m going to search for the data manually. Therefore, I will lose a statistical base, but I’ll continue digging anyway. Let’s see what I find.
I would like to know what has happened historically to those Darwins that won the DarwinIA contest at any month given.
If we were investors: Would it be a good idea to invest in those Darwins just because they win in a month?
- If they win is because they are the best. Aren’t they? It is a safe bet to invest in the best
- If they win is because they had an abnormal good month. It is reasonable to expect that the following months will be bad. Just for the mean reversion rule
In any case; ‘a’ or ‘b’, it should be only a matter of time to invest on those Darwins, holding them time enough, to give us some good profits.
How much time is ‘time enough’?
I took the top three Darwins who occupied the podium in each month for the last 24 months. This is August 2018 until August 2020. I couldn’t take more recent DarwinIA months because I want to see the evolution of those champions for two complete years.
I gathered their returns for 3 months, 6 months, 1 year, 18 months, 2 years
Again, it has been a task 100% manual. I burned my eyelids writing down the results on a spreadsheet. Here you have the data if you are curious, by the way:
Once I got the data for two years, I found these interesting results. Look at the graph:
The performance deteriorates over time. Besides, it doesn’t look a good idea not even took the winners for the shortest timeframe: 3M.
If we differentiate by position, we can see that Gold Medal tends to be better than Silver Medal. And Bronze Medal drags any possible performance:
Did you expect that? How can you explain it?
First, as said previously there’s not enough data to get conclusions. I just took manually 84 samples.
However, if we had to believe the trend that show us the graphs we would conclude that it isn’t a good idea to use the Podium of the DarwinIA monthly winners as an indicator to cherry pick the Darwins to invest. Right?
Having said that, In my opinion these results are highly biased by two factors:
One, Three to Five years ago the criteria for ordering the DarwinIA list was different from what we have today. So, results can’t be consistent.
Also, Three to Five years ago there were infamous Darwins on the Podium. They were pure Martingale systems and we all know how Martingale ends:
Two, Although today we can find great Darwins, I suspect that 5 years ago it wasn’t the case. The environment before was a shorter community, not so many good Darwins a lot of them eventually faded away.
But hey! A Gold Medal is a Gold Medal my friend!!