Anyone else want to add to the list?
How about people who get their investment advice from the radio?
I suppose you would first have to ask, "Which radio show?".
That is why your thesis is rubbish. You have presumed to identify Professionals from Amateurs by asking if they invest the way you invest, if they consider the same things important that you consider important and by whether you agree with their last trade, i.e. buying the QQQ in the past few days.
This is my favorite though:
by the fact that amateur investors will always assume prices are rising and the downside risk is limited
In reality, a very good overall strategy over my lifetime and most of the lifetimes represented on this board. It's all so relative. Sure hourly, daily, weekly, monthly and even some annual perspectives have seen major retracements, bear markets and such. But imagine at a 20 year chart, where the closing price of the US equity market on December 31 is plotted for 20 year intervals. What do you see. A line that goes for the most part straight up. So thinking that the general trend of prices is up and downside risk limited is simply a reflection of simple observation of price behavior over time. The observation of a professional or amateur?
You came close here and get partial credit, but again, had to inject irrelevant criteria to muddy the definition:
If you are well versed in the markets, well versed in economics and finance, have extensive knowledge of trading, and have the consistent results to prove it as measured by your gains in up and down markets, and the major portion of the money you make is from the markets you are a professional.
If you make all your income from the market, but use only astrological criteria to make investment decisions, are you a professional or amateur? For me, this is a no-brainer, you are a professional. Why? Because your vocation is the market. How you implement and carry out that vocation has nothing to do with your status as a professional.
I suppose it may provide some psychological comfort to draw a line in the sand to distinguish investors as professionals who think like you do, from amateurs who think differently. It is the same destructive us versus them mentality that seems so pervasive in our society.
The only label that counts in this profession is whether you are a Buyer or a Seller. The market neither knows nor cares why you are buying or selling, whether you do it for a living, for a hobby, or as an addiction, nor what radio show you listen to.
A
PS: It might care though, that we are very overbought and the full moon is Monday. |
