A well-developed intuition/judgment [how does one measure that in any objective way?]… A bit of luck also helps.
I have often said that survival is the only true metric of success. Likewise, if you are not broke, you may have good judgment or useful intuition. I’ve also read that “fortune is an excellent moral.”
To disagree with Elmat, always remember to do your math. Commonsense suggests that stocks or economic trend lines break in time, and that one must wait for the new trend line to establish itself. I believe that we are in that period now. I have had a remarkably good year rotating through SRS, SKF, SFK and FXP based on the assumption of a macro decline, and then getting out as the trend lines broke. I also accept that I got wildly lucky with trades in AIG, GNW & HL. In the current environment, I am back to mostly cash and waiting to see if another rally develops, or if a steady decline forms in the next quarter.
Earlier I mentioned the LTCM model because I felt that the smart people involved did not allow for failures. They didn’t seem to allow for exiting positions as their models failed. A financial “engineer” might have allowed for exiting all positions under certain circumstances, and then restarting the trades under a “boot up” process.
As an engineer, I must expect failures and unacceptable results from my efforts, even when the mathematics and physics had no flaws. The problems were typically unexpected inputs or no inputs for longer than anticipated. It’s never been a pleasant experience. I strongly believe that this is the critical difference between ‘engineering’ and the mere theorizing or the construction of correlation models. As you might guess, academic mathematicians or physicists do not worry about the in-practice failures of their models; they’ll most likely attribute these failures to user error.
To answer you question from above, I can measure my engineering judgments and intuition using QA and QC statistics, but I imagine that that is much more difficult for an attorney. Maybe a win/loss record, or yearly revenue increases would work for you.
Best |
