I've heard people ask alot why are there not traders as rich as Buffett. Investors keep reinvesting their profits where as traders use their profits to live off of. It would be interesting to see what the results would be if traders showed what they could have earned had they used their profits to increase their trading pool.
Traders Cant Beat The Market
- Thread starter Free Thinker
- Start date
You can switch his "Truth #1" around. He says that active investors as a whole must average slightly lower than the markets. I haven't wrapped my arms around that yet, but doesn't that suggest a ratio of winners to losers amongst the active investors? Meaning, if one guy makes half of what the market does, another makes 50% more? Or mayhaps the ratio is 2 losers to one winner, so our hero makes 100% more.
I've been doing ok using the Rydex Funds to go long and short the market. My indicators are the adx and the slow stochastic. I can trade them once a day, every day, and Rydex doesn't complain. Moreover there are no broker fees and no maintainence fees.
My daytrading sucks. What worked perfectly yesterday didn't work at all today etc, etc, etc.
I am also hedged against any losses. I never lose more money in the market than I make in short term fix income investments. So I've made money every year in the bear market.
I'm optimistic that things will get better. I don't care which way the market moves as long as it isn't sideways.
regards
My daytrading sucks. What worked perfectly yesterday didn't work at all today etc, etc, etc.
I am also hedged against any losses. I never lose more money in the market than I make in short term fix income investments. So I've made money every year in the bear market.
I'm optimistic that things will get better. I don't care which way the market moves as long as it isn't sideways.
regards
I don't know why this is being discussed by traders. If you do not believe you can beat the market you should not be trading.
If you believe you can beat it then the rewards can be outstanding.
From Bruce Kovner interview in Market Wizard
<b>Were you influenced by Michael?</b>
Oh, yes, very much. Michael taught me one thing that was incredibly important{pause}
<b> That is a great lead-in. What is the punch line?</b>
He taught me that you could make a million dollars. He showed me that if you applied yourself, great things could happen. It is very easy to miss the point that you really can do it. He showed me that if you can take a position and use discipline, you can actually make it.
Guess how much he made last year!
HEDGE KING KOVNER GETS $600M TAKE
By PAUL THARP
--------------------------------------------------------------------------------
June 12, 2003 -- The new king of Wall Street is hedge fund honcho Bruce Kovner, who pocketed $600 million in one of the market's worst years.
Kovner, a 58-year-old political conservative who personally spent $2 million to print a new illustrated Bible, earned the title with uncanny picks all year on currencies, stocks, derivatives and other esoteric financial gambles.
Kovner and his $10 billion hedge fund, Caxton Associates, headed the annual list of hedge fund giants compiled by Alpha, a new publication from Institutional Investor magazine.
The secretive hedge funds running the show on battered and bruised Wall Street are making huge fortunes, despite the lousy year for most investors.
Even in the rough times, the hedge funds did well. The average personal take for the managers of the top 25 hedge funds dropped about 30 percent, to $110 million from $158 million a year earlier.
Trailing Kovner was James Simons and his Renaissance Technologies Corp. He raked up personal earnings of $287 million for the bad year.
In third place was perennial hedge fund kingpin Paul Tudor Jones II, who hasn't had a down year in 16 years of running his global hedge fund at Tudor Investment Corp.
Jones, 48, is spending many of his millions on philanthropy and was a founder of the hot charity Robin Hood Foundation.
In fourth place is Chicago's Ken Griffin, with $225 million in earnings from his Citadel Investment Group. Until his recent engagement, the 34-year-old multimillionaire was one of Chicago's most eligible bachelors. He's marrying Ann Dias, who had run her own hedge fund out of Tiger Management in Manhattan.
If you believe you can beat it then the rewards can be outstanding.
From Bruce Kovner interview in Market Wizard
<b>Were you influenced by Michael?</b>
Oh, yes, very much. Michael taught me one thing that was incredibly important{pause}
<b> That is a great lead-in. What is the punch line?</b>
He taught me that you could make a million dollars. He showed me that if you applied yourself, great things could happen. It is very easy to miss the point that you really can do it. He showed me that if you can take a position and use discipline, you can actually make it.
Guess how much he made last year!
HEDGE KING KOVNER GETS $600M TAKE
By PAUL THARP
--------------------------------------------------------------------------------
June 12, 2003 -- The new king of Wall Street is hedge fund honcho Bruce Kovner, who pocketed $600 million in one of the market's worst years.
Kovner, a 58-year-old political conservative who personally spent $2 million to print a new illustrated Bible, earned the title with uncanny picks all year on currencies, stocks, derivatives and other esoteric financial gambles.
Kovner and his $10 billion hedge fund, Caxton Associates, headed the annual list of hedge fund giants compiled by Alpha, a new publication from Institutional Investor magazine.
The secretive hedge funds running the show on battered and bruised Wall Street are making huge fortunes, despite the lousy year for most investors.
Even in the rough times, the hedge funds did well. The average personal take for the managers of the top 25 hedge funds dropped about 30 percent, to $110 million from $158 million a year earlier.
Trailing Kovner was James Simons and his Renaissance Technologies Corp. He raked up personal earnings of $287 million for the bad year.
In third place was perennial hedge fund kingpin Paul Tudor Jones II, who hasn't had a down year in 16 years of running his global hedge fund at Tudor Investment Corp.
Jones, 48, is spending many of his millions on philanthropy and was a founder of the hot charity Robin Hood Foundation.
In fourth place is Chicago's Ken Griffin, with $225 million in earnings from his Citadel Investment Group. Until his recent engagement, the 34-year-old multimillionaire was one of Chicago's most eligible bachelors. He's marrying Ann Dias, who had run her own hedge fund out of Tiger Management in Manhattan.
You are totally missing the point of the article.
For every Ken Griffin or Bruce Kovner... there are 10,000 Joe Blowouts.
There are very few that can actually beat the markets.. but your avg. Joe will not.. so since the odds are against them they should just dollar cost into the SPY.
--MIKE
You are way too naive.
I think what they were trying to say is that 90%+ of traders can not beat the indices consistently over a 5 year period.
And those few that do beat the market are well capitilized and dedicate their lives to it.. so unless you are willing to take a big chance and dedicate your life to.. you are better off averaging into SPY.
--MIKE
So if you buy 100 shares of GE at it's new high and you are the only trader that bought it at that price, and all the remaining shares are then valued at the new high, all that value added was put in by you? No, you only put in a relativly small amount and pushed the valuation of all the shares of GE up by billions.