Being a billionaire means jacksh*t. The two brothers who setup Alticor/Amway/Quixtar are the biggest scam artists (despite a "legal" business model) and yet they're among the richest in the world. I am not saying that Soros is a scam artist. In fact, I find him annoying but at the same time pious and righteous. <b>But just because you're a billionaire does not necessitate a sense of "king"ship</b> As far as Krieger goes, from what I gathered he setup a tiny shop to trade for "fun." Aka Semi-retired.
I am missing no point; see what your'e saying..but still just kidding with ya... Have a good night. David
I don't think it WAS obvious then. It might be obvious in HINDSIGHT. Anyone can played Monday Morning Quarterback. hehe. But even IF it was OBVIOUS TO YOU, would you have the GUTS to put on a FEW BILLION DOLLAR POSITION?!! This is where position sizing is KEY! He had the right conviction and was going to LOAD IT UP! I'm sure a few other players/traders probably came to the same conclusions, but I HIGHLY DOUBT they had the GUTS to put on such size. Especially an unhedged one directional bet! Now, that's the genius of Soros. Sure, other people helped him and traded for him and he got the credit. But like Druckenmiller noted it was SOROS who taught him when you have the CONVICTION you gotta be a PIG and LOAD it up! I remember this funnny story from Market Wizard when Druckenmiller was particularly proud of his yen bet of a few hundred millions. He came to Soros office and boasted about it. And Soros said,"You called that a POSITION?! Put on a few more billion!!!" And he did. And of course banked it well. Soros gave his traders the CONVICTION to TRADE SIZE!
Excellent point. I really learned a lot from market wizards. That was the biggest moral. When you are right, and every bone in your body says so, you have to push the edge and really play big. This doesn't mean to do every trade big, but when you KNOW you are right, there's no sense in playing small. I like to think of it this way. I ask myself "Harris, do you mind locking 30-40% of you account into this stock at this price and not checking the stock quote for a year?" When I say yes, I am that confident in my conclusions, then I ask myself, "Harris, why do you only have 5% of your account in this position?" That is usually how you find your answer. If you really believe, you only need to look as far as your position sizing. If you score huge a lot, every once in a while, you'll miss a pitch and whiff. You need to cut your losses and move on. Just remember that your many wins will overwhelm your few losses. Last year I lost 40% on my THV bet (still have it on). But I made it back many times over with equally large bets in a few other stocks that have doubled and trippled like DDN/CNXS/IBA for starters. Another Soros lesson is to have a few large positions that you are very confident in. It isn't the intellect that made him great (he is brilliant, I don't even understand half of the points in his books.) It is about knowing how to position size and be a pig yet be conservative.
"KNOWING" you are right can be dangerous in trading. The guys at LTCM knew they were right (they were, all their spreads eventually came back). But their confidence (arrogance) led to position sizes that meant if the market didn't wise up and agree with them soon enough, they were out of business. The market doesn't always recongnize or care about fundamentals.
Well, that's why you do PROPER position sizing. For example, sometime I have a few thousands shares on or load up various futures contracts and the market doesn' t behave the way I thought it would, I began to slowly bail out. I bail out even before the market goes bad! I bail more than half of the position if things are flat or slighlty not that great. Then the I bail out the rest at the FIRST sign of not going my way! Sometimes, it eventually go my way, but not by much. So, it's not like that great of an opportunity in the first place. The best trades are when you put on size then it moves right away. You know you are right then! The problem with LTCM is that they never took a stop loss. HAHA! I think my stop loss would eventually get me out regardless of the size. But then again, they were throwing around a few billion, so they definitely have some LIQUIDITY issues! haha. trader99