The longer you play, the more likely you will die

[ETcallhome]

I use to skateboard on a half-pipe along time ago-- the more you skated, the more you kept pushing the boundaries-- the more you pushed your limits, the more likely it became that you would get hurt bad. I ended up breaking my back and arm---

Very very very few kept pushing the boundaries and improving--- these were the outliers-- maybe 3-5 made it to middle age without major injuries---unlesss they quit

Just like trading-- the more you push your limits, the more likely it is that you will blow up. Think of Niederh$ffer--brilliant guy with a monster competitive streak--- he needed to stay on top of the hedge fund world with the best returns-- he was forced to keep pushing the limits to maintain world class status-- we all know what happened.

With this said, I guess for folks that are easily satisfied and not interesting in pushing their own limits ( or account) -- sure, after you learn the game, you can churn out a living provided enough capital. BUt for those who want to go for the gusto, be one of history's top dogs, YOU NEED TO PUSH LIMITS and TAKE RISK. with this risk comes the fact that the longer you play, the more difficult it becomes to maintain your level among your peers thus the more risk equals more chance to blow up.

The timid mouse souls will never understand--- that's who the corporate world is for-- yet they try to bring that idea to the wild west of the markets-- i can't think of a more boring life.

surf

all I ever wanted was to churn out a simple living. Never have figured out how to do that. Everything I have to show for myself is the result of a few lucky trades.
I don't need any gusto or to be recognized as a top dog. I am extremely non competitive. Nobody wants me to even play board games with them because I see so point in winning if there is no cash prize.

But geting back to the question, If I keep doing what I am doing and I live long enough I will blow up. Like I said, accepting that made me a much much better trader.

 

[marketsurfer]

Well, ask yourself:

John D Rockefeller, who by most accounts is the most successful businessman in U.S. history, how did his business turn out?

I know you are a fan of VN. For all his faults one of his best concepts was of never ending cycles. How does this theory fit in?

I am a Jim Simons fan, but perhaps Jim is a result of a perfect storm of coincidence?

VN's concept is "ever changing" cycles----- Simons cracked market structure itself-- a true edge-- he is definitely a positive black swan.

surf

 

[2rosy]

be the bookie not the gambler

 

[Frederick Foresight]

the longer you trade, the more likely it is that you blow up-- ??

Depends on how you trade, doesn't it?

Also in the interview he [Peter Brandt] said that if you do this long enough, you can't help but make money because enough opportunities will present themselves over the course of time. The question is whether you will be in the game long enough to take advantage of those eventual opportunities. And the key to that longevity is risk control and money management.

"Strong opinions, weakly held."

On the other hand, if you're going to bet everything on red, then you probably shouldn't do it more than once, if at all.

 

[Maverick74]

It's amazing to me how many people on ET do not have an education in finance, or economics for that matter. The only thing that matters in the long run, is like any business, is the net present value of all the future cash flows that you generate in this business. The NPV will take into account blowups and opportunity cost of capital. If NPV is > 0 then you should trade. Very simple. Whether you blow up or not is immaterial as it's priced into the NPV calculation.

 

[Frederick Foresight]

It's amazing to me how many people on ET do not have an education in finance, or economics for that matter. The only thing that matters in the long run, is like any business, is the net present value of all the future cash flows that you generate in this business. The NPV will take into account blowups and opportunity cost of capital. If NPV is > 0 then you should trade. Very simple. Whether you blow up or not is immaterial as it's priced into the NPV calculation.

I don't think NPV can be reasonably applied to speculative trading, especially over the long run. Trading cash flows cannot be predicted with meaningful confidence or probability, especially over the entire course of a trading career.

 

[ETcallhome]

It's amazing to me how many people on ET do not have an education in finance, or economics for that matter. The only thing that matters in the long run, is like any business, is the net present value of all the future cash flows that you generate in this business. The NPV will take into account blowups and opportunity cost of capital. If NPV is > 0 then you should trade. Very simple. Whether you blow up or not is immaterial as it's priced into the NPV calculation.

yet we are still waitng for a highly educated economist or MBA to successfullly and consistently out perform. You would think they know all about NPV.

 

[marketsurfer]

It's amazing to me how many people on ET do not have an education in finance, or economics for that matter. The only thing that matters in the long run, is like any business, is the net present value of all the future cash flows that you generate in this business. The NPV will take into account blowups and opportunity cost of capital. If NPV is > 0 then you should trade. Very simple. Whether you blow up or not is immaterial as it's priced into the NPV calculation.

VN is a great example of that--- blew up several times but remains very wealthy-- and still made more over time for his investors than lost overtime--

 

[marketsurfer]

yet we are still waitng for a highly educated economist or MBA to successfullly and consistently out perform. You would think they know all about NPV.

That's a super ignorant thing to say-- there are FAR MORE highly educated succesful folks in the finance markets than dropouts etc.

Jim Simons is just one example-- there are tons of finance PhD's who are ultra wealthy from trading MBA is a joke in the finance world-- they know how to use powerpoint, that's about it

 

[Maverick74]

yet we are still waitng for a highly educated economist or MBA to successfullly and consistently out perform. You would think they know all about NPV.

Do you understand what NPV is? It's the fact that they DO know what it is as to why they are not trading. If their NPV is < 0 which based on their education is going to make their opportunity cost extremely high thereby creating a negative NPV.

Do you even know what an MBA is? Nobody gets an MBA to trade, you get an MBA to work in management. You want me to list all the successful Econ and math majors who killed it in the market. I don't know, say John Arnold, Paul Tudor Jones, Jim Simons, Ed Thorp, George Soros, Ray Dalio. Wasn't much of a wait was it?