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Strategies & Market Trends : ahhaha's ahs

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To: ahhaha who wrote (7597)	3/9/2006 4:11:02 PM
From: Lhn5	Read Replies (1) of 24758

<<You take a position at 10. It immediately drops. What were you expecting? Now, answer the question.>> If you were short, you expected just that. If you were long, you expected it to go up. <<Then your answer is 5% cut losses. You will accumulate 10 5% cut losses before you get one 50% gain. The trade-off rate is a function of frequency of trade, duration of hold, but never of cut loss rule. The average expected return in trading stocks is about -10%.>> Well that is the mathematical average of all comers. A rare few may do better than the average even over the long haul. I would expect to be one of those few. <<Asset allocation is crap talk for amateurs and pseudo academics. The proper way to manage money isn't recorded in any books I know. The academics have no clue. I never try to diversify and I don't have many positions. One may end up diversified but one shouldn't seek to do so a la academia. You go where the ideas are, and you run with it.>> When I said asset allocation, I apologize as I really didn't mean it in the classic sense which you appropriately disparage. I also have few postions. My current 'asset allocation' is that my largest position is a beer and pizza restaurant I have owned shares in for about 6 years, next largest is a tiny tech company no one has yet heard of, then oil and gas including oil sands, and some metals. Not much else.

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