What’s the point of portfolio diversification?

[SimpleMeLike]

Whats the rush

Hello taowave,

1. So I can hurry and have $1 million dollar cash and enjoy a better quality of life like all other rich people in America who have $1 million dollar cash, and not have debt.

2. So I am not old man just now being successful in the futures market.

3. Because no man or nothing can ever take this skill from me in my entire life.

 

[zdreg]

Unless you are Peter Lynch

Unless you are John Templeton.

"In 1939, Templeton took a major chance. World War 2 had just started in Europe and was causing uncertainty in the markets. Templeton saw low prices and borrowed thousands to buy 100 shares of every stock selling for less than one dollar. Even when a third of the companies faced bankruptcy, he held on to his shares. All but four of the stocks rebounded, making nearly a 400 percent return in just four years."

 

[taowave]

You got me..I think Lynch did 30% per for apx 10 years??

At the end of the day,the Diversified crowd is typically more value oriented,and buy weakness and more on the way down..

Unless you are John Templeton.

"In 1939, Templeton took a major chance. World War 2 had just started in Europe and was causing uncertainty in the markets. Templeton saw low prices and borrowed thousands to buy 100 shares of every stock selling for less than one dollar. Even when a third of the companies faced bankruptcy, he held on to his shares. All but four of the stocks rebounded, making nearly a 400 percent return in just four years."

 

[SimpleMeLike]

Whats the rush

And how do you day trade and work a job at the same time?

Hello taowave,

Futures market open 23 hours a day. You can trade at night time.

Just stare at the chart and try your best to get some money. I am not trying marry the thing just take some ass and run.

 

[Maverick2608]

You earn tons of money from a few quality stocks.
You earn some money from a few diversified stocks.
You lose tons of money from many many diversified stocks.


End result: meager profit or worse loss.

I agree with the first 3 lines. I strongly disagree with your conclusion.

10% for the vast majority is an excellent return at the lowest possible risk.

Some people refer to compound interest as the "eighth wonder of the world." This term highlights the incredible power of compound interest, which allows money to grow exponentially over time when interest is reinvested. Albert Einstein is often (though perhaps apocryphally) quoted as saying, "Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it."

I would rather say that diversification is the eight wonder.

Trading... that is a completely different game where only few succeeds.

 

[newwurldmn]

Good Morning zdreg,

I agree with your comments.

Diversified portfolio is just flat marketing and a way to never be rich until 80 years old.
It is a waste of time.

Back testing is becoming a waste of time too I am realizing.

You wonder why you are unsuccessful and poor.

 

[themickey]

You wonder why you are unsuccessful and poor.

I design and write algos constantly from the ground up, have never traded sim in my life and the last 15 odd years have never backtested anything, and I only trade stocks.
Currently holding 65 positions and trade a few times per week every week, full time trader.
I have no intention ever of backtesting or sim.

 

[newwurldmn]

I design and write algos constantly from the ground up, have never traded sim in my life and the last 15 odd years have never backtested anything, and I only trade stocks.
Currently holding 65 positions and trade a few times per week every week, full time trader.
I have no intention ever of backtesting or sim.

I wasnt referring to his backtesting comments. I was referring to all his comments.

If you are writing algos why wouldn’t you back test them? I think the only reason to not backrest something is because you are trading something different or extremely opportunistic (like the banking crisis right now).

 

[themickey]

you are writing algos why wouldn’t you back test them?

Because not required and besides backtesting is like test flying a balsa aeroplane thinking that will suffice for a real sized homebuilt test flight. Besides backtesting in many instances lacks authenticity due to lack of other factors which come into real live play. Sometimes its impossible to backtest for example if incorporating fundamentals.
When I write an algo it's based on (un)common sense.
They are never based on indicators well these days they aren't, when once upon a time they were.

....I think the only reason to not backrest something is because you are trading something different or extremely opportunistic (like the banking crisis right now).

Nup.

 

[themickey]

I think the only reason to not backrest something is because you are trading something different or extremely opportunistic

Well many of my trades lean toward opportunistic, ie, if lithium begins trending, then I'll pile into those stocks.