"Real Winners Are Equity Traders"

[Fundlord]

"what I do, stock and real estate speculation. It's bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing." --Gordon Gekko, Wall Street. 1987

...it's not just Equities alone, it's in addition to a little something called Options that will make all the difference.

in all seriousness though, it depends on how you look at it...for the collective whole picture...sure, you can say Buy n Hold stocks will hold better than the collective cowboy speculators.
like everything, you have to know what you're doing...but for the masses...most will fail or be average.

They flashed Gekko's holdings at the end of WS2 it was just a long/short equity portfolio, but then again his edge was insider trading. Easier done in equities than anything else.

Why the need for options ? 90% of options expire worthless sounds a bit like FX to me.

 

[Mo06]

"then again his edge was insider trading. Easier done in equities than anything else."

If you have insider knowledge, then options give you HUGE leverage on stocks....

 

[sheda]

I think that statistic is heavily skewed. The crowd FX attracts are different that the crowd stocks attract.

Exactly that. Riding a stock with a huge position on an amazing run for a year or more is not really comparable to highly leveraged futures and currency trading.. "I made my fortune with 10,000 future trades" never does sound as sexy as "I bought eBay when it was at $9 now I smoke $100 cigars on my yacht"

 

[rmorse]

Options and FX both have an economic component for hedgers and can be used to speculate. The point is that there are investors and there are traders. If you are an investor, I would agree that sticking with a portfolio of equities might be a good decision for many. However, trading is materially different. Trading is a business based on finding an edge and taking advantage of it while managing your risk. If a trader only wants to stick with one asset class, that makes sense for them. But to make blanket statements about some asset classes should be ignored over others without any other basis, is very narrow minded.

I have stuck with equity options over the years. I think I would have done better if I started with futures and options on futures. And I have little to complain about. I'm happy with my results.

 

[Mo06]

Here's a quote from a great stock trader..


"It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon."

- Reminiscences of a Stock Operator

 

[billyjoerob]

Exactly that. Riding a stock with a huge position on an amazing run for a year or more is not really comparable to highly leveraged futures and currency trading.. "I made my fortune with 10,000 future trades" never does sound as sexy as "I bought eBay when it was at $9 now I smoke $100 cigars on my yacht"

is that true? on ET at least the stock traders are considered amateurs. the futures traders are the professionals. "I trade oil futures according to my algorithmic system" sounds more sophisticated than "I think Chipotle burritos taste really good, it's got a bright future."

 

[jsp326]

Here's a quote from a great stock trader..who eventually commited suicide


"It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon."

- Reminiscences of a Stock Operator

I added an important detail in bold. Not to take anything away from Livermore, but his life shows how hard it can be to trade consistently and follow the right principles.

 

[sheda]

is that true? on ET at least the stock traders are considered amateurs. the futures traders are the professionals. "I trade oil futures according to my algorithmic system" sounds more sophisticated than "I think Chipotle burritos taste really good, it's got a bright future."

Thats kind of what I mean, we have all at some point heard of that guy who invested in a single stock security and made a killing, but those chugging away complex systems with thousands of trades in the same time frame, it just does not have the same allure. The winners are the ones that make the returns what ever they are dealing with however they decide to approach it.

 

[OddTrader]

"Real Winners Are Equity Traders"

Haven't you noticed a typo: "Real Winners Are Equity Investors"

 

[Mo06]

"Not to take anything away from Livermore, but his life shows how hard it can be to trade consistently and follow the right principles."

Agree with you 100% on that...