Buffet has averaged about 35% pa over the last 30 years. Not a bad rate.
Did Buffett Really Claim to be able to make 50%/yr?
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This thread is a circle jerk... But I'll throw in my two cents anyway...
As my trading capital has grown, so has my diversification. Wall Street tells us that "Overly Diversifying" your trading or investment portfolios will muddy your quality of returns, but I haven't found that to be the case at all over the past few years. While my increased diversity has allowed me to extend my trading to vessels previously unreached, it has also allowed me to increase my transaction sizes as well. By decreasing the size of positions while they move against me, but not to the point of a stop loss, I increase position size in other areas that are rallying. The balance of my investment portfolios use to be spread out over only a handful of sectors and different trading instruments, and with the small sizes I was holding in each one, any selling (or covering) without fully exiting the position would almost always be detrimental to the expected gains in other areas. Now, on the other hand, I have two to three times as many positions being held simultaneously, and with larger position sizes, it is easier to move around capital from one to the other. A larger base capital for me, thus far, has only meant more homework but with fewer headaches. My trading/investing has become much more balanced with the increased size and distribution of funds, and the consistency inherent in appropriately balancing a larger portfolio has made the once difficult task of exiting an entire position, and then frantically searching for a new one, nearly obsolete. When matching the appropriate size of each position to the expected return or risk of loss becomes one of your most difficult tasks, everything seems much simpler than it ever was before. My thoughts? With more $$$ comes more work, but it also comes with the nice little bonus of greater consistency and much more fluid (less stressful) decision making.
...Take that Buffett!
As my trading capital has grown, so has my diversification. Wall Street tells us that "Overly Diversifying" your trading or investment portfolios will muddy your quality of returns, but I haven't found that to be the case at all over the past few years. While my increased diversity has allowed me to extend my trading to vessels previously unreached, it has also allowed me to increase my transaction sizes as well. By decreasing the size of positions while they move against me, but not to the point of a stop loss, I increase position size in other areas that are rallying. The balance of my investment portfolios use to be spread out over only a handful of sectors and different trading instruments, and with the small sizes I was holding in each one, any selling (or covering) without fully exiting the position would almost always be detrimental to the expected gains in other areas. Now, on the other hand, I have two to three times as many positions being held simultaneously, and with larger position sizes, it is easier to move around capital from one to the other. A larger base capital for me, thus far, has only meant more homework but with fewer headaches. My trading/investing has become much more balanced with the increased size and distribution of funds, and the consistency inherent in appropriately balancing a larger portfolio has made the once difficult task of exiting an entire position, and then frantically searching for a new one, nearly obsolete. When matching the appropriate size of each position to the expected return or risk of loss becomes one of your most difficult tasks, everything seems much simpler than it ever was before. My thoughts? With more $$$ comes more work, but it also comes with the nice little bonus of greater consistency and much more fluid (less stressful) decision making.
...Take that Buffett!
Great Post... Especially for being your first.
Doesn't everybody love it when you try to post something useful, only to get a follow-up post from a newb like this one...?
Welcome to ET... dick.
5:1 says this guy has 20 posts by the 28th...
come on; everybody on ET makes 200% return a day. Any less is unacceptable
i would like to point out again that buffett must have meant Investment (holding period of several months or years) not Trading as a way to make 50%.
i interpret buffett's wisdom as "it is impossible to make substantially more than 50%/yr consistently via investment".
how much can be achieved via trading - who knows...
Yes, I was referring to investing too. Given that in my opinion a good investor will utilize combo strategies with derivatives and such to enhance and smooth the equity curve.