http://www.forbes.com/sites/nathanv...-john-paulsons-comeback-crashes-in-september/
Here is what happens when you try to pick the winners.
Here is what happens when you try to pick the winners.
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What keeps a brokerage employee from shadowing your trades?
- Thread starter Aston01
- Start date
I just wrote:if I predict that I will be profitable this year it is a prediction too, and I am sure I will be profitable this year. So I can predict, within certain limits. But limits that make me money.No, you DON'T know that for sure. That is hindsight bias. I also know who won last year's Super Bowl. I have no idea who will win next year's. James Simon had a commodity fund that blew out before he launched Renaissance. Which actually made it difficult for him early to get investors into Renaissance. Years after Renaissance became successful he launched a managed futures product and an equity fund. Both were failures! You cannot predict the future. Do you want to tell me which hedge fund will have the best performance for July? Come on Mr. Oracle. If it's so easy, tell me who the big winner will be BEFORE the results. I can't wait. You are on the clock.
I never said that I can predict which fund will be the winner. Typical to put words in somebody's mouth to try to proof something that was never said. I would appreciate a correct discussion.
I WILL BE PROFITABLE FOR THE PERIODE FROM TODAY TILL THE END OF THE YEAR. I WILL AT LEAST DOUBLE MY ACCOUNT.
This is a prediction in the future as it starts only from today, so no hindsight.
Keep this posting and at the end of the year we will speak again. The only thing I want is, that if I show you the proof end of the year, my anonimity will be garanteed.
You wrote:You still have an uncertain future outcome.
I agree with that but your statement is incomplete, you should add: within managable limits.
I can even predict, with a large safety range, what my profit will be.
For example: HYPOTHETICAL EXAMPLE: profit will be minimum 10%. Read what I wrote now, I said clearly HYPOTHETICAL EXAMPLE, so don't tell later that I predicted this.
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No. Ackman was getting killed for a while. Some of his shorts almost bankrupted his fund. Had you tried to cherry pick some of his trades, there is some probability you would have been short one of his stocks that doubled in his face. It was only because he had a few big winners that allowed him to hold those shorts that went against him for months. Cherry picking is NOT the answer. And again, that comes back to trading. Do you think you have the "ability" to "predict" which of his ideas are golden? Well.....that is trading! It doesn't how matter where you are getting the info from, you still have to take a risk. You still have an uncertain future outcome. You still have to manage the position size, know when to get out. Know when you are wrong...etc. There is NO way around this.
There is no magic pill, formula, or secret. Most successful traders are successful because they are good at measuring risk, managing it, pricing it and optimizing it. And that requires a lot of hard work, a lot of skill and a lot of experience. You cannot simply "copy" it. There are no such unicorns.
These guys have beat the market for years using controversial methods. I can't imagine that having access to their personal portfolio moves won't give me an edge. If I were an employee at Ameritrade, I'd probably be looking for penny pumpers and insiders. If I've identified an account as belonging to a notorious penny pumper and identified when they're accumulating shares prior to the pump, I would certainly go along for the ride. Anyway, I'm not arguing that a trading edge means 100% certainty.
Ackman has a hard time entering/exiting a $1 billion positions, but he had a huge impact on HLF before Icahn, Loeb, and others came to the rescue.
For every example you find I can find one proving the opposite. Proof should be in numbers that are statistically representative and valid.http://www.forbes.com/sites/nathanv...-john-paulsons-comeback-crashes-in-september/
Here is what happens when you try to pick the winners.
http://www.forbes.com/sites/nathanv...-john-paulsons-comeback-crashes-in-september/
Here is what happens when you try to pick the winners.
Notice I said personal portfolio, not necessarily the fund they manage. And I'd certainly lean towards activist investors. At a retail brokerage I'd probably focus on successful penny pumpers, insiders.. well basically I'd look at the trading pattern in the top .01% percentage return accounts for the past 5 years. I think I can identify when someone was getting lucky vs. when they are consistently trading with obvious insider knowledge or consistently accumulating shares before newsletter pumps, etc.
These guys have beat the market for years using controversial methods. I can't imagine that having access to their personal portfolio moves won't give me an edge. If I were an employee at Ameritrade, I'd probably be looking for penny pumpers and insiders. If I've identified an account as belonging to a notorious penny pumper and identified when they're accumulating shares prior to the pump, I would certainly go along for the ride. Anyway, I'm not arguing that a trading edge means 100% certainty.
Ackman has a hard time entering/exiting a $1 billion positions, but he had a huge impact on HLF before Icahn, Loeb, and others came to the rescue.
Spearhead, these guys have a lot of volatility. Let's use your pump and dump example. Timothy Sykes was regarded as the pump and dump champion. Claims he set a world record for returns. Then launched a hedge fund. Investors "picked" him to be their horse. The hedge fund crashed and burned and was shut down. Do guys get a hot hand from time to time? Sure. But I can tell you that by the time you notice their hot hand, it's probably cold. Empirical evidence shows this time and time again. In fact, Jack Schwager in his brilliant book showed empirical evidence that the optimal strategy was betting on the losers!!!! And he has the data to back it up. He said buying the losers among CTA's with a minimum track record, say 5 years, was the best performing strategy. Read his book. I highly recommend it.
Notice I said personal portfolio, not necessarily the fund they manage. And I'd certainly lean towards activist investors. At a retail brokerage I'd probably focus on successful penny pumpers, insiders.. well basically I'd look at the trading pattern in the top .01% percentage return accounts for the past 5 years. I think I can identify when someone was getting lucky vs. when they are consistently trading with obvious insider knowledge or consistently accumulating shares before newsletter pumps, etc.
Spearhead it's a lot harder then it looks. There is a lot of math behind this. Look, let's change our angle. Take a prop firm. So prop firms basically have the ability to do "legally" what is being prescribed on this thread. Say firm XYZ has 100 traders. Their optimal strategy is to use their own in house performance metrics, find the best traders and increase their capital allocation to them and reduce their capital allocation to the bad traders or fire them. So that is what firms do. But time and time again, this lead to prop firms blowing up. What ultimately happened was firms over weighted their exposure to a small number of traders whose size ultimately took the firm down. This happened to a lot of big trading firms in the Chicago area. On paper it looks so easy and sounds so simple. It's just extremely difficult to execute in practice. This area of finance has been studied thoroughly. The most optimal model appears to still be the diversification model. Spread your bets. Don't bet it all on one horse.
For every example you find I can find one proving the opposite. Proof should be in numbers that are statistically representative and valid.
You have provided no proof. That is my point. You are reading me yesterdays newspaper. I already know what happened yesterday. Thanks.
That's what you would call hindsight. At least if somebody else would post it. Next 5 years can be totally different. So totally irrelevant as proof of anything.In fact, Jack Schwager in his brilliant book showed empirical evidence that the optimal strategy was betting on the losers!!!! And he has the data to back it up. He said buying the losers among CTA's with a minimum track record, say 5 years, was the best performing strategy. Read his book. I highly recommend it.
You are reading me yesterdays newspaper. I already know what happened yesterday. Thanks.
I told today what you will read in the newspaper from december 31, 2015.
That's what you would call hindsight. At least if somebody else would post it. Next 5 years can be totally different. So totally irrelevant as proof of anything.
Of course it's hindsight. That is the point. He was making the statistical argument that you could blindly pick the worst performing CTA's and perform better then carefully chosen CTA's with good performance at the time. That WAS the point. LOL.