Regarding "Few get a consistent 20%/year."

[Jakobsberg]

I could imagine there are lots of small unknown traders out there gaining >20% compounded. With small money and only being answerable to yourself then i think it a relatively achievable goal to double your money in 3 years. Of course when you get too big then you start to move prices and it gets much harder.

And when you get to a few million USD then it makes sense to me to lower the risk, live off interest or dividends, so you stop aiming for 20% since you only need to get rich once. After that time to step off the gas and enjoy life.

Scataphagos - I dont doubt the numbers but many of those disciplines such as mutual or bond funds are limited by their investment charter. Many mutual funds had to invest in stocks through 2007/08/09 no matter what their opinion of the economy.

For small investors with millions and not billions of USD and freedom to invest wherever they want and use leverage (options etc) if they think its time to be aggressive or just sit in cash have advantage over the monitored institutions.

 

[i am nobody]

Years ago when I was a struggling money manager "trying to make a track record and attract clients"...

That says enough, no? You were struggling, could not make decent money, so now everybody should be a loser. Just to keep you away from a depression or to make it more bareble for you that you did not succeed?

Compoundinged has nothing to do with being able to make 20% return. You make 20% or you don't. Compound has nothing to do with it, it is an additional option that will not change your return. If you make 20% a year, you make it.

 

[i am nobody]

What is the educational value of all these stupid threads: you cannot do this............. it is impossible to do that.....trends don't exist..........consistent profits don't exist............

I promised myself that from now on I will not react anymore on these stupid statements. If you really want to start this kinds of threads it means you have a mental problem and you should go in therapy. It will maybe be more helpfull for you. And for many people this will be probably the best posting in this thread.

I don't care what others think is possible or not. I will do what I think is good for my situtation.

I understand you, Scat...., you need admiration from others for your superb trading. You can do what nobody else can????

 

[Scataphagos]

"...I understand you, Scat...., you need admiration from others for your superb trading. You can do what nobody else can????

You obviously understand NOTHING. ON IGNORE!!

 

[Scataphagos]

"...Scataphagos - I dont doubt the numbers but many of those disciplines such as mutual or bond funds are limited by their investment charter. Many mutual funds had to invest in stocks through 2007/08/09 no matter what their opinion of the economy.

I'm sure this will come as quite a surprise... but my gains came via "mutual fund timing".... and that was before there were leveraged and inverse funds. In one of my 100% total gain years, I was "in the market" only 23% of the trading days. That wasn't my biggest return year, but to this day I still find it astonishing.

When I was "pressing to make a name for myself", I averaged "41%, compounded annually for 18 years." I know, sounds ridiculous. I had to ask the software maker I used to track performance to "expand the program's ranges" to accommodate my results. They said, "What? Never heard of such a thing".

Fact is... I "traded around a long-side bias during a bull market" and made a lot via market timing and sector rotation. Maybe I was mostly lucky.... but lucky for 18 years? Nevertheless, I'm a reasonable source of information on all this... and I still say "averaging 20%/yr, compounded on capital" is good work.

 

[Jakobsberg]

"I'm sure this will come as quite a surprise... but my gains came via "mutual fund timing".... and that was before there were leveraged and inverse funds. In one of my 100% total gain years, I was "in the market" only 23% of the trading days. That wasn't my biggest return year, but to this day I still find it astonishing."

Not really. You had the advantage of being able to use timing. The mutual fund itself had to stay invested for the whole period so you likely outperformed it. Most of my gains in recent years have been from short period of leveraging into relief rallies after I think the bottom of the correction is in. 100% would be impressive if just straight stocks and no leverage. I have only done that with leverage (options, certificates etc).

Have to say though the language you use is rather unusual for the people I know with money and makes me suspicious.

 

[blakpacman]

What is the educational value of all these ...

The educational value is that it's a dose of truth to damper the often unrealistic expectations that newbie traders/investors have. There's this false perception among inexperienced traders that making money in the financial markets is easy. It's usually not until they've wiped out and lost their life savings that they figure out the truth.

 

[blakpacman]

I'm sure this will come as quite a surprise... but my gains came via "mutual fund timing".... and that was before there were leveraged and inverse funds. In one of my 100% total gain years, I was "in the market" only 23% of the trading days. That wasn't my biggest return year, but to this day I still find it astonishing.

When I was "pressing to make a name for myself", I averaged "41%, compounded annually for 18 years." I know, sounds ridiculous. I had to ask the software maker I used to track performance to "expand the program's ranges" to accommodate my results. They said, "What? Never heard of such a thing".

Fact is... I "traded around a long-side bias during a bull market" and made a lot via market timing and sector rotation. Maybe I was mostly lucky.... but lucky for 18 years? Nevertheless, I'm a reasonable source of information on all this... and I still say "averaging 20%/yr, compounded on capital" is good work.

That strategy prospered in the 1980s all the way up until there was a crackdown on the practice. It worked for Gil Blake and Norm Zadeh. Worked so well for Norm that he was able to burn through $46 million in his ill-fated attempt to create a nudie magazine empire.

 

[i am nobody]

The educational value is that it's a dose of truth to damper the often unrealistic expectations that newbie traders/investors have. There's this false perception among inexperienced traders that making money in the financial markets is easy. It's usually not until they've wiped out and lost their life savings that they figure out the truth.

The dose of truth should come from the "system", or whatever you call it, that this "would be trader" developed himself. In any business people have a business plan. That plan is based on the abilities (that should be tested and confirmed) from the "would be trader" himself. All the rest should not influence the "would be trader".
If you start a business what do you do? Base it on your own capabilities and experience that you put in a business plan, or would you just start and think you will become a second Bill Gates, or Larry Page or Michael Dell, because they were successful.

This constant warning against too high expectations are never found anywhere else except in the trading area. It is almost like a religious sect that wants to warn people for disaster. You can warn them too for marketing that might encourage people to spent more than they can afford. The famous American credit card behavior. There are more American families that had a real estate disaster the last decade, than there are "would be traders" that got completely ruined.
? Check the numbers of houses that were sold because people could not pay the mortgage anymore.

So why is there an educational value only here, if there is any?

From January 2007 to December 2011 there were more than four million completed foreclosures and more than 8.2 million foreclosure starts ….
http://www.globalresearch.ca/how-many-people-have-lost-their-homes-us-home-foreclosures-are-comparable-to-the-great-depression/5335430

http://www.nbcnews.com/id/42881365/ns/business-personal_finance/t/no-end-sight-foreclosure-quagmire/#.VTQCICHtlBc

Buying a family house has no risks at all. Real estate is very secure. Trading is dangerous. Watch the statistics. Millions of Americans lost everything in real estate, did millions of Americans lose everything in trading too? Perception and reality are two completely different things. Mixing them up can be very costly.

 

[galvinlee888]

The educational value is that it's a dose of truth to damper the often unrealistic expectations that newbie traders/investors have. There's this false perception among inexperienced traders that making money in the financial markets is easy. It's usually not until they've wiped out and lost their life savings that they figure out the truth.

Blackpacman - I just ignore this "I am nobody". Any of us that been in this trading business in long time know he is just BS on his return.
I make a good live in trading + investing, but with many years of experience (institutional and retail) and hard works. The dangerous of this BS "I am nobody" is he gave the newbie some false hope that they can quit a day job by making unrealistic income in trading.