I hate when people make this mistake. Equities are not, I repeat, ARE NOT, a zero-sum game. Not overall, not per issue either. A company can start out a $1 a share and get bought out for $50. Everyone that got in early makes money. THe buyers at $50 don't lose money. In futures, you're not really not trading anything of value . . . it is just an agreement. There is always someone +1 and -1. Yes futures is a zero-sum arena. Equities is a investment in future dividends these have real value (in most cases). Yes a company can go back to no value, but this happens very rarely. To justify you saying that stocks is a zero-sum game, every company would have to remain at it's IPO value, or at least revert to that price. uncleTom
Instead of violently opposing the idea, why think of its possibilities. Becuase the financial establishment and you yourselves decided it cannot be done? Yes, the probabilities are greatly against. Try it anyway. Mt. Everest was once unscalable. This works best in a self-directed, Roth or SEp IRA. There are no taxes to pay as they are funded with after tax money. No taxes to be paid annually, no taxes to be paid upon withdrawl. The only expense is comission and drawdown, if any. If 5K is a big bite, start with 1K. You only need three doubling years to reach 5K. For the adequately capitalized, 1K is piss-ant lunch money. Remember that it is not 100% or bust. Even if the strategy earns 5% per year compounded without the infusion of additional capital, you will still come out ahead if managed properly You may never reach the stars, but that means you are always jumping as high as you can.
Dump a 100% winner? Are you kidding? It's like saying I know when the top has hit or bottom has been made. Better to hold onto that 100% winner. Who knows, it could be another Microsoft or Dell? Since I'm not as ambitious, I'll just take a Hanson.
Frankly I don't even understand what your "idea" is. Basically you are advocating doubling your money every year with one stock but you have provided no meat to this thread. All you have done is provided some arbitrary numbers, $5k, one stock per year, 25 times. So what? Nothing you have mentioned is creative or even interesting (and it certainly isnt realistic given the liquidity problems that would occur if actually did hit the big numbers, putting aside the little problem of picking 25 doublers in a row without a miss). What you are suggesting is no better then posting a thread about going to Las Vegas and employing a Martingale strategy - its devoid of anything new. Everyone wants their investments to do well. The devil is in the details (picking a stock or other investment that will double in a year). Everyone faced with a growing account will of course continue to invest more in future years. You think you've invented the concept of "letting it ride"? This thread has no purpose other that to exclaim in retrospect that you picked one stock that is up ~20% in a few months. Big whooptie do. Your choice of using equities demonstrates how half-baked this idea is. If you want a real shot at doubling 25 times, once per year, you are going to need to trade something else. There is just no way you are going to do it with a single stock each year. No one is that good. No one.
Yes, great ideas. Many have ideas but few roll-up their sleeves and do the work to put them into action. I think you're stymied and you're fishing for ideas. There are alot of stepping stones here but you've gotta dig. One or two giants as well but they won't pick you up and set you on their shoulders. You have to use the stepping stones to reach their level. Once you're there you may find you don't need help and just keep climbing on your own. I also think you get a rise out of stirring things abit--a character flaw or a hobby I'm not sure which. btw: A note of gratitude. This has reminded me that I've become lazy as of late and need to get back to my discipline. addendum: The money is so close you can almost touch it ...maddening, isn't it.
Thanks, infolode! I will assume you're no longer foe but have chosen the middle ground. My reasons for writing this thread are few: first I think I'm a pretty good headline writer. I wanted to see the reaction of the headline. A plan is already in place but I am not above adjusting some. Fishing for ideas may be strong. Your preception was correct that I was looking for a nugget or or three to help improve the probabilities. If a stock doubles within 12 months, it may be better to hold it for a few more years. Something I didn't consider. I am well aware 25 doublers in a row is a near impossibility. But I also feel it is not nearly as impossible as it seems. Maybe one picks 10 doublers out of 25. Or they don't double but still make you at least 40% plus per year. Isn't that also good? The whole point is go for the doublers. If they don't double, you will still earn a very healthy return. I also think that to find doublers consistently, you have to invest, not trade. That is, find a reasonably priced good value stock and give it room to grow. Stocks priced above $70 are too volitile. Beta less than 1.00. Companies with zero debt. Companies with strong earnings but not TOO strong. You want slowly building momentum, not the wild swings of a wrecking ball. The upper levels, execution will be a major factor. I have never put on single position over 500K in anything I trade.