The thing about stock trading - you're not really competing against any person to make money. The idea that someone who made a call against you is pocketing your investment is a misnomer (unless you are working in a large firm that is directly trying to push their invested stock in one direction vs. another in another direction). So even if at times I disagree strongly with other poster's advice and even believe they are gambling, I have no reason not to listen and let them have their perspective. Fatty, I think it's about time you own up to your mistake, put your gun into your holster, and join the conversation.
Sorry, I was at lunch. Robbie: Extremely impressive. Good for you. And to the other posters: I stand by what I say. Robbie's case is an EXTREME rarity, rather than the norm, which is why he's making a killing. And does anyone still want to argue that 5 times your original investment = 500% return? Really?
Sure people are competing. For example look at VW a few weeks. People knew the shorts had to buy back and they tried to massacre them. Its you trying to outsmart the market which usually doesn't happen.
[QUOTEAnd to the other posters: I stand by what I say. Robbie's case is an EXTREME rarity, rather than the norm, which is why he's making a killing. And does anyone still want to argue that 5 times your original investment = 500% return? Really?[/QUOTE] You still don't get it even though it was clarified by a previous poster. Robbie's case is not that unique. He works in a proprietary trading firm. His initial allowance was probably some low number for him to learn off of. As his performance improved, they slowly increased the size of the accounts he worked with. His return was not 500%. The absolute value of his net profit did increase by five times because during whatever segments, his usable capital was increased by his firm - not because he was returning five dollars on each dollar. No one is going to argue they return 5 times annually. What an individual should be looking for is to firstly beat the returns on their CD 8% and as a second benchmark, beat the 15% return that better funds provide yoy. That is not just ok when you outperform 15% - it's great. Try reiterating a 115% return on 50,000 capital compared to what you get on your CD now over 20 years. You are talking about a million or two more down the line.
Please read fully what I wrote before providing a "counterargument." Individuals investors are not competing. [Ok, you can compete in some penny stocks that have volumes in the thousands]. Individual investors are trying to read what large financial institutions are doing and riding the waves. We also are definitely not trying to "outsmart the market." Rather, we're looking for patterns and just responding to them. I will be the first to tell you that stock trading is neither really adding value to society nor something the average person can loosely attempt to succeed on. However, out of all the investments you can make, stocks have the best return and offer extra income for those who spend a little time to learn and therefore is not only a very reasonable activity but something "joe the plumber" should figure out how to do with some competency.
I like to trade cause I get bored at work. I think of it like a game where the market is my opponent. I guess its just my way of thinking of it.
There have been other suggestions in this thread beyond short term trades. Shipping and the MLP sector are both down quite a bit over the past several months. I have DHT and FRO for long term holds in the Shipping sector. BWP and LINE for long term holds in the MLP sector. I have been thinking about the CanRoy sector, but waiting for oil prices to settle down before moving into that. Do those suggestions have more <i>Risk</i> than a CD or Annuity product? Yes, but I can live with it since my expectations are for significantly higher total returns.
Do those 2x and 3x ETFs properly hold value long-term? For example, if you're investing long-term and expect the market to go up over 20 years, is there any reason not to invest in a 2x S&P500 fund (or that new 3x fund) as opposed to just a regular S&P500 fund? It seems like if the goal is to beat the market over the long haul, that's a ridiculously simple way to do it, no? $10000 at 10% (approx average market return) over 20 years = $67,000 $10000 at 19% (double, minus a 1% fee to account for small differences) over 20 years = $324,000 Obviously, if you might need the money shorter term, you can take huge losses, but is there any reason not do it for a retirement account?
Thanks for the link..I was wondering the exact same thing. I recently got the Pro Share prospectus and the first thing that jumped out was the difference in returns between the long and short ETFs for the same sector...
Robbie, What is the attrition rate for prop traders at your firm or in general? For example, when you started 4 years ago...how many of these traders in your starting group are still around? I've heard that over 75% of prop. traders don't make it to year two. I know folks who started at Hold Bros., Bright Trading and SMB and they didn't last very long. On the flip side, I know a Hold Bros. trader here in NYC who makes over 5M per year trading with his prop. firm. From my experience, I would say day trading is quite possibly the hardest and most grueling method of navigating the markets. But if you can make it, its very rewarding.
Interesting - thanks! This seems to imply that the lower returns are the result of "tracking error". But wouldn't tracking error go both ways - ie, there's just as much a chance for it to over-perform as under-perform? Is there something systemic in there that ensures lower returns? The fact that the double ETF gained 0% while the market gained 5% is horribly inefficient, it seems.
FBB There is an interesting <i>dichotomy</i> (perhaps more than one) at work in this thread. <b>Group A</b> <i> * Researcher * Grinder * Cautious * Nitpicker * Detail Oriented * Staid * Structured </i> <b>Group B</b> <i> * Flamboyant * Gunslinger * Off the Cuff * Impertinent * Free Flowing * Unpredictable * Bold </i> If the BBS members were asked to nominate people for Group A, I would stand a fair chance of making the <i>Top Five</i>. If the BBS members were asked to nominate people for Group B, you would stand a fair chance of making the <i>Top Five</i>. Yet, in this particular thread, we are in opposing camps. The <i>Annuities</i> area that you are endorsing might normally be associated with people in Group A. The shorter term trading that I have been doing lately might normally be associated with people in Group B. Your contention that it is akin to <i>Gambling</i> is interesting considering that I devote quite a bit of time to reading and thinking about the markets. If I felt it was strictly <i>Gambling</i>. then I wouldn't be doing it.
It appears that we will try to move upward again. Not sure how much lift is going to be available. Some Blog Writers are Bullish and some are Bearish with some feeling conflicted on direction. Perhaps advancing the early part of the week, but maybe not enough to climb over the recent highs. Then sliding downward from the middle to the later part of the week.
You know I'm starting to wonder, wrt GS/MS, if this is one of those "if there is smoke, there must be fire" deals. For some reason those two stocks have a way of plunging even when it seems like there's no good reason for them to. I think their balance sheets are really not as strong as they like to let on.
