Cutting losses - not the best idea

????Mr Markets????,

Your self-congratulatory comments aside, it is clear your long-only stock investment system suffers from survivorship bias. Yes, you've made money making big bets that a market will continue moving in the one direction it has moved historically. Yes, you feel great for having done so and having been profitable.

Others have gone before you -- it certainly seemed like a great idea to keep buying emerging market debt 10 yrs ago. And it certainly seemed like a great idea to buy tech stocks 5 years ago. And sure, the best idea seemed to be to have no stoploss and instead to double down when the market dipped. Up until the end.

Maybe the market will keep drifting up, and the rising tide will continue to lift all boats, including yours. Maybe it won't. I wouldn't want to be the "no stop loss" guy testing out this or any other single direction / single market investment strategy.

BTW, I know plenty of MBAs who've gone to Wharton and other equally or more prestigious MBA schools -- Chicago, Harvard, Columbia, NYU. These schools are very easy to get into and most of the grads are dumb as rocks, with a few exceptions. You and I both know that degree isn't worth the paper it's written on, so please stop touting it as in any way meaningful with respect to trading or investing.
 
I have heard different places over the years that Peter Lynch spent around $10 million per year sending a team of people to companies when he was interesting in buying their stock. Bean counters to the bean dept, engineers to R & D, sales slicksters to marketing, etc. The best in their field, a traveling force. For a week or more they would pour over the books and records and talk to people. He certainly was rewarding with the longest winning streak of any mutual fund manager. Great record and a triumph of fundamental research.

Most companies are so incredibly large I don't think any one person within the company, even the president himself, could absolutely say that their company was a "buy" on any given day. So many decisions are delegated, so many departments, so many divisions in many different countries, so many product lines, mergers, lines of credit, receivables, etc. No one person can have a handle on it.

Many of us here are quite surprised, actually stunned that one "mrmarket" can turn the investing world upside down by sitting in his arm chair reading Yahoo or MorningStar reports, then make investing decisions that lead to investment returns and win/loss ratios that make Peter Lynch look like a schoolboy.

Cool.
 
If time is measured by annual percentage rate to judge performance solely, without the consideration of labor costs then conversation is meaningless when comparing these styles.

Scalping would have a higher labor cost than this style that is in this thread. So it would demand a higher gross APR when comparing.

If one spends their time trading because they truly enjoy it then this is another point. Some people work at jobs they hate to make a living.....some do not.

Risk is truly at debate here. How do we define it? Do different styles change the definition of risk? Do expectations have anything to do with it? Does time have anything to do with it?

What would you say as to how you define risk? anybody? Compare it to a standard that is defined as the benchmark. Is the benchmark different for longer term? Can risk be broken down to fit all types of trading into a factor?

What do these terms mean to you?:

scalping
swing
position
day
investing
speculating
short term
long term
intermediate term
buy and hold


Please excuse the classroom discussion style. But lets think about this. Could all these have the common denominator of risk and which method would one use to universally rank with?

Michael B.
 
Quote from onewaypockets:

I have heard different places over the years that Peter Lynch spent around $10 million per year sending a team of people to companies when he was interesting in buying their stock. Bean counters to the bean dept, engineers to R & D, sales slicksters to marketing, etc. The best in their field, a traveling force. For a week or more they would pour over the books and records and talk to people. He certainly was rewarding with the longest winning streak of any mutual fund manager. Great record and a triumph of fundamental research.

Most companies are so incredibly large I don't think any one person within the company, even the president himself, could absolutely say that their company was a "buy" on any given day. So many decisions are delegated, so many departments, so many divisions in many different countries, so many product lines, mergers, lines of credit, receivables, etc. No one person can have a handle on it.

Many of us here are quite surprised, actually stunned that one "mrmarket" can turn the investing world upside down by sitting in his arm chair reading Yahoo or MorningStar reports, then make investing decisions that lead to investment returns and win/loss ratios that make Peter Lynch look like a schoolboy.

Cool.
More...

LoL :D :D :D
 
Quote from onewaypockets:


Many of us here are quite surprised, actually stunned that one "mrmarket" can turn the investing world upside down by sitting in his arm chair reading Yahoo or MorningStar reports, then make investing decisions that lead to investment returns and win/loss ratios that make Peter Lynch look like a schoolboy.

Cool.
More...

If you've followed me for some time, you'd know that I do indeed have 42 consecutive profitable trades of 15% or better. I've posted many of these on here in real time when I entered into the trade (some of these threads were deleted, I don't know why).

The fact that you question that my record is legitimate indicates to me that you think it is remarkable. If my record was ordinary, I guess you wouldn't be so interested in it. So, based on that, it seems to me that you think I'm a very good trader.
 
Quote from mrmarket:



If you've followed me for some time, you'd know that I do indeed have 42 consecutive profitable trades of 15% or better. I've posted many of these on here in real time when I entered into the trade (some of these threads were deleted, I don't know why).

The fact that you question that my record is legitimate indicates to me that you think it is remarkable. If my record was ordinary, I guess you wouldn't be so interested in it. So, based on that, it seems to me that you think I'm a very good trader.
More...

Careful, 42 consecutive profitable trades of 15% or better now? Aren't you forgetting a key word?? I thought it was 53 consecutive trades according to your initial thread??

You have a HUGE credibility problem, You give it a rest. No one believes a word you say.
 
Quote from Romeo:



Careful, 42 consecutive profitable trades of 15% or better now? Aren't you forgetting a key word?? I thought it was 53 consecutive trades according to your initial thread??

You have a HUGE credibility problem,
More...
You mean to say MM doesn't have a Wharton MBA???!!!!! Nhaw, say it isn't so. :confused:

I have noticed that MM doesn't try to help others by posting on other threads. Must not have anything to offer.
 
Partially agree with that.

:cool:

Profits run may be one of the best ideas;
however some well researched selling plan is real close to it.

=====================================
Searching for wisdom like a prospector panning for gold
-Solomon, trader king.:cool:
 
Quote from mrmarket:



If you've followed me for some time, you'd know that I do indeed have 42 consecutive profitable trades of 15% or better. I've posted many of these on here in real time when I entered into the trade (some of these threads were deleted, I don't know why).

The fact that you question that my record is legitimate indicates to me that you think it is remarkable. If my record was ordinary, I guess you wouldn't be so interested in it. So, based on that, it seems to me that you think I'm a very good trader.
More...

There are lies, there are bold faced lies, then there are statistics.
--Mark Twain

Never chase a lie. Let it alone, and it will run itself to death.
--Lyman Beecher

It is better to deserve honors and not have them than to have them and not deserve them.
--Mark Twain

:D
 
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