the great thing about DCA'ing for the average investor is that it is a passive investment strategy that ENSURES you buy more shares at the lows, less at the highs, that you stay in the market, etc. that, along with compound interest, is a recipe for success i don't confuse for a second, TRADING with longterm investing. cuban thinks that markets are a scam because most traders can't beat it. duh that doesn't have to do with the markets qua the markets that's a statement on TRADING investing is an entirely different story
I thought I agreed that he was speaking to the issue of trading versus investing. But it seems as if he is speaking to both.
if he was saying "daytrading is for suckers" at least he might have a point. estimates are that 85-90% of daytraders lose money however... that is roughly the same percentage of businesses that fail IN GENERAL so, he might as well say "opening your own business is for suckers" hey, no risk, no reward. but trading, as a business, is about as likely to succeed or fail as ANY small business. and takes a lot less capital, and is much more democratic. markets don't care about your race, gender, disabilities, age, etc. you are just an order in the book. it's the most democratic institution in our economy but TRADING is not the stock market daytrading is merely a way to attempt to make money off the market the market doesn't care about me or you, or whether you are trading or investing but the stock market is not for suckers. it is the greatest wealth creation engine in the world. however, if you plan on TRADING, you better be set with a business plan, a good edge, strict risk management, and be prepared to do your homework the vast majority of traders do not incorporate these rules and frankly, thats a big part of why they lose which is kewl. they provide liquidity
I see a pattern...a month ago..it was buy the dips...now it is DCA (don't even wait for the dip)...hmmm...I wonder where all the bulls are.
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DCA with funds has always been a good strategy and has nothing to do with buying the dips. DCA doesn't concern itself with market direction. Buying dips OBVIOUSLY concerns itself with market direction and is always a good strategy as long as the market and the individual stock is above it's 150-200 day moving average.
I translate what he said as, there is more of an edge in trading than investing. I agree with that, that is why I gravitated from investor to trader. He is also saying that to make money trading, you have to be wise and tough. He certainly understood that there was way more value in unloading his internet start up, than keeping it. He sold when the suckers were buying. That was certainly repeated again and again. Time Warner buying AOL being a prime example. Mark Cuban is not Teddy Turner, Cuban sold early, Turner held and held and then sold at the bottom.
Much of the conventional stock market wisdom is propaganda from someone with a vested interest. 'Buy and Hold' as a mantra seemed to appear as the brokerage industry shifted to fees on assets rather than commission on stock trades. Reduced the number of salespeople needed and freed them up to push higher margin IPO's and products with fees embedded.
Buy and hold is a solid strategy if it is applied to solid companies with good financials & strong earnings. It works.
noddy don't put words in my mouth i am neither a bull nor the bear i intraday scalp the dow futures for a living every day i have (on average) multiple longs and multiple shorts but in my INVESTMENT longterm B&H account, i am 80% longs, and I have been that way for 20 years. i also hold a few shorts, some commodities, some bonds, etc. and I will continue to do so. every single month i add to it, period. stocks like MO, BA, PG, XOM, UA, etc. etc. etc. it will take a hit in bear markets, and do great in bull markets but that's INVESTING in trading, i am neither a bull nor a bear. i trade intraday what the market presents trading and investing both use similar instruments, but they are VERY different methodologies, mindsets, etc. if i am investing (building a position), I WANT my stock to go down. so i can buy more - cheaper if i am making a TRADE, i expect it to go up, and if it doesn't and it hits my stop - im gone completely different methodology as i said, the best thing i was ever taught as a youth was to invest in the stock market. i do so. every month. like clockwork and that is what many, if not most, americans do - at least via their 401ks, or other retirement plans