K Capital Advisors
Account statements verified. Vendor is honest. A unique swing trading advisory that goes both long and short in highly liquid small to mid cap stocks. Average trade is 8 days in length. Adviser has a classic education and brings real world trading experience. Adviser forms hypothesis based upon fundamental research, and then executes trades based upon technical chart patterns. Very unique.
Today’s review is K Capital Advisors, a swing trading alert service that specializes in trading small to mid cap stocks. The alerts are both long and short, there is no trading of stock options. The cost of the service is $50 each month. The owner of the company is Kyle Matthew. How did I discover K Capital Advisors, and Kyle Matthew? He reached out to me. Apparently, Kyle had been reading my reviews and he wanted me to review his swing trading service. A vendor reach out to me? And actually want me to dig through their underwear drawer? To allow me to poke and to prod, and ask all my of difficult questions? If you read my reviews, I look at all of these trading vendors with a big yellow jaundiced eyeball. You will find little compassion and mercy from me. And so, I decided that if Kyle wanted to be my personal pinata, then I would oblige him. A good whacking from my “truth stick”, lets see what I could smash out of this brave/pitiful soul. And so, with the fervor of a Spanish inquisitor, I proceeded to smash, pick, poke and prod through this advisory, hoping to find something interesting.
The K Capital Advisors website is terrible. It looks ugly. This is not the website of a marketer. This is not one of those Profit.ly guru type websites that are candy coated with dazzling graphics, stories of $75,000 trading days, orange Lamborgines, fancy videos, stories of students turned millionaires, and an equity curve that looks like a skate board ramp. This website has the look of a one man shop, one that probably had zero experience in the building of a website. But is a fancy website what we are really interested in? How many of us have been drawn into the purchase of a scammy trading product, simply because the website was tailor made to appeal to our dreams of profit and glory? I know I have. And Kyle Mathews website is definitely not going to conjure dreams of trading glory. But again, this is not what is really important. What we really want to know is whether this guy is real? Who is he? Does he really trade? Can we make money with this guy.
This Guy Is Different
One of the first things that I talked about with Kyle is about verifying past trades and performance. My readers and I don’t want bullshit. We dont want an iphone picture of a supposed trading account, we don’t want a carefully selected image snippet of “real trades”, don’t insult our intelligence with after the fact You Tube trading videos, no testimonials from worthless third party sites like Investimonials, and specifically don’t even attempt to show us a jacked up equity curve from Profit.ly. We want brokerage statements. Nothing less will do. To my surprise, Kyle agreed.
The next thing I received from Kyle Matthews was a google spreadsheet that supposedly lists all of his trades dating back to 2013. The spreadsheet can be viewed here.
Sometimes the little things can give up big clues. The spreadsheet that Kyle sent to me is one such thing. Notice how well organized and professionally maintained this spreadsheet is? Notice the formulas and exact record keeping? This is not the spreadsheet that was created for the marketing of a product, this is the spreadsheet that was created to record the personal trading results of a thoughtful and well organized individual. I also like how I can enter my hypothetical starting balance, and then the spreadsheet automatically calculates a range of functions that give me some sort of idea of forward performance (based on prior results).
Along with the spreadsheet, Kyle also sent me a brokerage account statement that was issued directly from Interactive Brokers. Since I have an account with Interactive Brokers, I have a thorough knowledge of what these statements look like. These are real statements. Yes, they are confusing. And my personal Interactive Broker statements are just as confusing. When you look at these, you might be a little confused, but rest assured, I have gone over these and matched the trades on the spreadsheet with the brokerage account statements. The statements are below:
As you look over these statements, you might of noticed that these statements only cover the Interactive Brokers account from January 2015 through May 2015. I questioned Kyle on this big gap and asked for additional statements going back to 2013. Kyle went on to explain that he currently works for an investment bank and that the individual trades from the trading advisory were intermingled with his 401k benefits, and a host of other trades non related to the advisory.
After speaking with Kyle, I told him that I needed more proof. And so we compromised on a solution. He agreed to screen share with me a non recordable session behind the firewall of his company reports. On the screen sharing session, Kyle logged into the investment banks back office reporting system, and we proceeded to pluck out the trades in question. It took some time. And I will not be revealing the name of the Investment Bank, but I can confirm that the bank is “Too Big To Fail” and Kyle has made each of the trades that he claims. Although the trades were for various position sizes, and he did scale in and out depending on the risk. It made sense. And I believe him.
In addition to the submission of the Interactive Brokers account statements, and a visual review of trades executed at his employer trading account, I also took the extra step of verifying that the trades from the advisory were actually sent out to paying customers. This was a little tricky, but I discovered that Kyle was using Mail Chimp to send out his advisory updates. What is Mail Chimp? This is a 3rd party software application that is maintained in the cloud. This application, Mail Chimp would leave a trail of all outgoing email sends. I asked Kyle for the log in information for Mail Chimp and was able to confirm a chain of sends that corresponded with the trading advisory service. In short, everything that he had told me, I was able to verify.
More About Kyle Matthew
One of the things about Kyle’s crummy website that I do not like is the lack of personal information about him. And so I began a series of emails where we went back and forth and I asked him a lot of questions. One email in particular, does a good job of giving us a glimpse of Kyle, the person, and why he is doing what he does…
I wanted to get you my background and take on why I started an advisory. To start, I was born and raised in the Philly area and ever since high school I’ve always had a passion for investing. It started as really just a drive to be successful as I came from a middle class family who didn’t really have much. My parents sacrificed basically everything for my siblings and I to attend great schools and growing up we knew what it was like to struggle. But as I started to learn more about investing I began hearing about, and then extensively reading upon and learning, technical analysis and the art of reading charts and understanding short term trading. At a very early age I knew that there was more than just a buy and hold mentality out there where short term trading thrived. Through college I read and studied more on the subject and my curiosity really turned into a passion. Anything about technical analysis and swing trading out there I’d read.
That passion really led me to Wall St. where I worked at a middle market securities firm on a derivatives desk while in undergrad. That’s where I really got a sense of the money to be made in the market from both the buy and sell sides. It was intense. As a 20 year old I was working with guys making six figures in minutes to days, buying planes and just living these ridiculous lifestyles. But that’s where I also learned about the dangers behind that money and the greed that people can learn to be accustomed to. Ironically, my mentor at the time and that entire desk were eventually prosecuted for several serious trading crimes well after I left my co-op. That said, it was an amazing experience to learn and grow as a college student.
From there I finished undergrad, and instead of heading back to Wall St. I worked for a Fortune 100 company, got my MBA and really learned what it was to run a business at an massive level from both the ground up and top down. With some luck, I took those roles and my MBA to an energy based private equity firm where I decided to get my CFA charter which I’m still in the process of getting. The private equity space is amazing. It’s a constant cat and mouse game that touched all sides of my quantitative and qualitative mind.
This entire time though I’ve always honed and sharpened my personal trading and passion for investing. Finally, after seeing all of the BS out there on a constant basis, I decided I could very easily open something on my own which finally led me to start K Capital. It’s funny to a degree because you see dozens of these gurus out there with zero actual backgrounds in finance. You ask them what their Shape Ratios are, or their variance and standard deviations of risk or anything remotely related to portfolio management, and it’s just silence. And these guys are actually in chat rooms day trading! That level of ignorance and shadiness was really the 2nd reason behind opening and starting K Capital. Besides my passion for it, I just found, and still find it, almost hysterical some scams and pie in the sky pitches some services sell.
Either way, I love where I’m at right now and can’t wait to continue to grow personally and professionally. Most importantly, to grow in the RIGHT way. Like we talked about, I show everything on the site and always will. There’s no sense in hiding trades or your background. It either makes you a better trader or you fade away out of the game.
I appreciate your time with all of this and can’t wait to see both of our sites grow!
A Clearer Picture
If you have made it this far, and are not completely lost by my nearly incoherent writing, then you are possibly beginning to realize that I might have found a gem. The more I read on this guy, watch his videos, and process THE WHY of his trades, the more I begin to realize that K Capital Advisors is not just a chart reading service. This guy actually digs through publicly filed (and massively confusing) financial statements of these public companies and tries to figure out what these companies are really up to. So, he is a hybrid, using technical and fundamental to form his hypothesis. He attempts to understand how these companies actually run their businesses, and he is able to process and make sense of things like cash flow, debt instruments, why companies will do things that most people are clueless about. He understands that the charts are just a representation of everything that is happening at a fundamental level. He forms an underlying theory based upon fundamental research, and then he executes based upon chart patterns. Its interesting, it is different, but most importantly…what he is doing is actually making money.
The Years Ahead
In my opinion, in the years ahead we cannot just blindly buy and hold stocks, and then wait for the federal reserve to lift the entire market higher. We need to use not only technical information, but we also need to form logical conclusions on why businesses will rise or fall. This is what makes Kyle so interesting, he has the classical MBA background, works for an investment bank, and has real world experience in private equity. All of this working together forms a pretty potent combination. I have little doubt that this guy is going to be a wealthy guy. He has the passion, the smarts, a interest in the fundamentals, and a track record.
How Best To Trade The Service
K Capital Advisors is a swing trading service. The average trade length is 8 days and we do not need to be chained to a trading screen. With this in mind, we do not need to worry about the day trading rule. In other words, we can be selective with our brokerage. However, since the trading is a bit more active, then simply laying down for the usual $5-$10 trades at Schwab would be wasting our money on commissions. The best way to trade this service would be through an account at Interactive Brokers. The minimum trade is $1 per side, and most of Kyles trades should be about $2 per side of each trade, depending on the amount of shares.
I plan on trading Kyle’s advisory for the next 12 consecutive months. And I will be updating this page in the interest of performance posterity. How do I plan on trading the service? I am going to set aside $10k of my Interactive Brokers account and purchase $2,500 worth of shares per trade. If you look at Kyle’s track record, you will see streaks of losing trades. For instance, during January-February 2014…Kyle could do nothing correct. But folks, this is what real trading looks like! I cannot stress this enough to beginning traders, if you want to be successful at this game, then you need to accept periods of rough performance. Conversely, since the beginning of 2015, Kyle has been on fire with excellent performance. Can he continue? This remains to be seen. Please revisit this page often for real time performance summaries.
Wrapping Things Up
I have now done quite a few of these trading reviews. It is becoming easier and easier to spot the bullshit performers from the true trading athletes. The bullshit artists love to market these perfect equity curves that are pure nonsense. The real traders that enter the slaughterhouse daily? The equity curves are bumpy, jagged, sometimes messy, but always seem to hit new highs. These bumpy and jagged equity curves are where the truth is waiting. This is what real trading looks like. Its hard to find honest trading vendors, especially those that put their own money on the line, trade with their customers, and eat only what they kill. Kyle Matthews has shown me nothing but integrity, honesty, openness, grit, and most importantly….a unique perspective.
Thanks for reading. Don’t forget to leave comments below. Even the haters will find that their voice is important.