Deal for New trader
- Thread starter Purple Barney
- Start date
No, I will say it again. Skill and edge are not the same thing. A lot of skilled traders blow up. Edge speaks for itself. There is nothing wrong with skill. Skill is very important. But you cannot convert skill to edge. Look, this is circular logic here. You say you have more skill then everyone else, hence you have an edge. So what is stopping everyone else from acquiring the skill you have thereby giving them edge? See? And round and round we go.
I'm not downplaying skill or saying skill is a bad thing. Quite the contrary. I'm just saying skill is not edge. You keep running around here talking about how you are going to learn "edge" that one else can learn and how you have "superior" skills that no one else can attain. This makes absolutely zero sense.
You are chasing your own tail with this logic. Any btw, no matter how many hours you spend in a batting cage, you will never be Barry Bonds. No matter how many hours you spend on the driving range, you will never be Tiger Woods. Skill and edge are NOT the same thing.
Quote from marketsurfer:
may i ask how these are traded by a prop trader at a firm like echo or bright, as an example ???
<i>Dave: PIPES are another one of Buffett's techniques. The first time I heard this term was when you mentioned it above. Please explain PIPES a little deeper.
James: A PIPE is a private investment in public equity. For instance, if a company needs to raise money quickly and does not want to go to the secondary process they will often sell shares to hedge funds or mutual funds directly at a discount to where there stock is trading.
Dave: Exactly how does Buffet use PIPES?
James: Buffett's investment in Gillette was a great example. Gillette was losing market share to Bic and various hostile takeover guys were circling around like vultures. Gillette approached Buffett as a white knight. He bought a significant piece through a PIPE which was basically convertible debt paying 8.75%, convertible at a slight premium to where the stock was trading then. Buffett saw that Gillette would never have cash flow issues so he would always get his coupon and principal back IN THE WORST CASE, and in the best case he converts and makes a lot of money on the stock, which is what happened. He's played PIPES on over a dozen situations, most of which I outlined in the book.
Dave: This seems to have lots of the "margin of safety" criteria he adheres to. Am I correct? Do PIPES have the safety Buffett craves?
James: PIPES have a huge margin of safety, perhaps more than any other market mechanism. He often gets convertible debt, paying a high interest rate, and convertible into stock at a price he thinks is decent for the company. It's a low-risk situation for him.</i>
I don't know if Bright or Echo trades them. But I know a prop firm that does 700 million shares a month in PIPES deals.
No. True skilled traders do not blow up. You might have to blowup a few times before you actually become skilled though. You know, money management is part of the skill(a big part). Many learn about that and risk management after blowing up, many times, then they become truely, SKILLED.
And its not circular logic at all. What stops everyone from learning this superior skill and becoming more skilled? Hm, maybe thats why you don't see the successful traders going around telling everyone how they do it. The reason everyone can't just learn it is because its NOT easy. Trading is hard, it takes experience, and many times, it takes huge losses to learn the true skills. Not every one has the patience, or money to put up to finally acquire these skills. Most the stuff that works in the stock market goes directly against common sense and normal psychology. If it was so easy everyone would do this and get rich! You should know this stuff.
And you are right, no matter how hard you practice, you won't be tiger woods or barry bonds. Just like no matter how hard you practice you probably won't be managing a few billion like Soros. But if you practice enough, you might become a very good golfer, or baseball player. Or hey, maybe you can even make a pretty good living trading stocks. At least better than a school teacher.
People that have skill may still blowup, but if you are still in danger of blowing up, you are not truely skilled yet. You are not consistent yet. And there are plently of people out there that have the skills to be consistent, and not blow up.
Again you are confusing edge with skill. I never said one cannot make money through skill and I never said skill cannot be acquired. I don't know why you keep beating this to death. Just stop saying you are going to create edge through skill. LOL. I know it's semantics, but it's important enough a concept to understand.
And on a side note, skilled traders blow up all the time. In many cases it's simply a black swan type event that they can do nothing about. Has nothing to do with skill.
"Luck and chance happen to us all."
interesting, mav, thanks.
i see its "filtering" down.
best wishes, surf
Yes, that may be true, but that is not edge. LOL.