Only 4 of The Top 55 Legendary Investors Are 'Up' In 2008

The real benefit of day trading under current market conditions is that you're flat at the end of the day and protected against irrational gap downs that seem to be magnified 4-fold vs. what would happen in a bull market. I mean, come on, RIMM misses earnings by a penny during an economic downturn and the stock loses 25% in a week. When even triple play stocks (upside earnings, revs and guidance) lose almost 40% after earnings (FLOW), it's just not safe to be an investor unless you're in it for the very long term. I have two long-term holdings on strong growth companies and they're both down 20%.
 
Quote from NoDoji:

The real benefit of day trading under current market conditions is that you're flat at the end of the day and protected against irrational gap downs that seem to be magnified 4-fold vs. what would happen in a bull market. I mean, come on, RIMM misses earnings by a penny during an economic downturn and the stock loses 25% in a week. When even triple play stocks (upside earnings, revs and guidance) lose almost 40% after earnings (FLOW), it's just not safe to be an investor unless you're in it for the very long term. I have two long-term holdings on strong growth companies and they're both down 20%.
More...

+1


Long term investors who can separate the wheat from the chafe, and recognize value, really can at least begin to think about building long term, productive positions now. That doesn't mean there won't be more temporary pain. But that's the price one must bear to build long term wealth (forget about making money near term).
 
Quote from ByLoSellHi:

+1


Long term investors who can separate the wheat from the chafe, and recognize value, really can at least begin to think about building long term, productive positions now. That doesn't mean there won't be more temporary pain. But that's the price one must bear to build long term wealth (forget about making money near term).
More...

Agreed 100%, which is why I have some long term positions in a few growth and dividend stocks (which are NOT down by the way). But it sure feels good to have a good chunk of cash backing up my day trading margin right now. In February I believed the DOW would drop to 10600 this summer and people thought I was completely nuts, insisting January was the bottom, then later insisting March was the bottom. Yesterday when it dipped below 11000 I started to believe my own prediction. "Get the Hell Out Part II" opened a thread a while back with "Don't try to pick a bottom" and after looking at 2001-2002 charts I realized the 7500 DOW doom-sayers actually stood a chance of being right this year.
 
Quote from libertad:

...

Of course , day trading is the only way one can hope to consistently get stellar returns.

...
More...
daytrading is not scalable after 1-10M buying power, otherwise buffett would surely be a daytrader.

daytrading is for people with little cash.
 
Quote from yayt:

Like Renaissance Technology?
More...

Renaissance is not a person. How many traders do they have? I assume that OP stated that the dude makes 100K/day daytrading by himself. You can't compare performance of a group of people to that of a single person. On the other hand, one could divide the performance of a trading business by the number of people employed and get reasonable measure of performance that can be compared to that of an individual trader.
 
Quote from shortie:

daytrading is not scalable after 1-10M buying power, otherwise buffett would surely be a daytrader.

daytrading is for people with little cash.
More...


I was referring to this post. Daytrading is scalable to 10 million, 100 million, 1 billion and so on.
 
Quote from Cutten:

It's useful for most investors and traders to see the downside of value investing - utter catastrophe during a genuine bear market. Even Buffett got totally creamed in the 1973-74 bear. Ben Graham was ruined in 1929-32.

This is why trading/speculating is superior to investing IMO. The funniest thing is what will happen if the bear gets really serious e.g. S&P 1000. A lot of these guys will be down 50%+.

I have to say as well, that many on this list demonstrate an utterly appalling disregard for risk control. To be down 30%+ in a year is shocking. One measure of performance is the long-term compound return divided by the maximum drawdown. So people like Pabrai, Whitman, Greenblatt etc are having serious problems because their max drawdowns here are huge.

It raises serious questions about the viability of value investing if you have to periodicallly lose 35-45%+ of capital.

On a personal note, it is gratifying to see that I've been shorting some of the same stocks that these investment legends have been buying. From a competitive point of view, it's nice to be up significantly for the first half, whilst these guys are getting taken out and shot during the same period. Don't let anyone tell you that you can't outperform the best investors in the world.
More...

This is the age of the trader. The S&P is essentially now where it was in 1999 (in terms of inflation adjusted returns, it is down over that time).

One day again it will be like 1982, and the age of the investor will be back, but it is not now.
 
You must log in or register to reply here.
Back
Top