Cutting losses - not the best idea

...Actaually Axe, I think his rate of return is pretty good....49 winners vs 5 open losers or thereabouts

 

axeman, hilarious post about longshot there

-Fast

 

So you seem to think that a good company, with a solid business model, can't be sold down below its intrinsic value, and remain oversold for an extended period, even years.

Right.

Holding stocks in a bull market isn't the work of genius. If you think otherwise, just look in the mirror.

Funny how you were not posting here 2 years ago.

 

This still tells us nothing.

Lets say that you put 20% of total equity on each trade.

As soon as he hits "5 in a holding pattern", he has no money
to make money with.

So actual return could range from negative, if you hit the
losers early in the game, to very positive, if your lucky.


Also... without stops, what if you started using this in 2001?
You could easily hit 5 losers that lose 80-90% of their value,
and hold for over a decade hoping to get your 15%.


Money management can have EXTREME effects on this
equity curve.

So I stand by my statement.... completely unknown.

peace

axeman

 

I understand the concept...but look at his actual holdings....the open positions...he's doing well in publicly documented picks....don't know about his private holdings though

 

Given the number of times that this thread has resurrected itself, I can only assume that mm is a vampire.

 

49 vs 5 does not give a 'rate of return'. Time is a component in the calculation (missing in mm's calculations) because 15% (before losses are factored in) within 4 months is a different rate of return than 15% (less losses) in 18 months. Furthermore, waiting until if and when 15% gets hit and then making that fit into the parameters of a win/loss ratio is like determining that 100% of everyone on earth is awake because we're only counting those who aren't sleeping until they wake up, if they do. Does that make sense?

 

OK....do the the math.....if he made 15% or better on 49 trades......lets assume he lost 100% on the other 5 trades......Im going to go out on a limb and say he has a pretty good over return,,,true or false?

 

The man claims to be the best stock picker on the planet, not the best money manager.

Quick nit-picking and bring him your finest meats and cheeses.

 

>OK....do the the math.....if he made 15% or
>better on 49 trades......lets assume he lost
>100% on the other 5 trades......Im going to
>go out on a limb and say he has a pretty
>good over return,,,true or false?

I haven't followed this thread or this guy so my response only relates to the information contained in your above statement.

No, with the above information you have no idea as to the rate of return because of the lacking time data.

Of course "pretty good over return" could mean something different that I think it means and in that case I'm useless. (Or as Kerpal would say "I am not knowing")

JB