JK - You seem to have a very smooth linear predictable view of the world. Almost like textbook or popular media stuff. You can be comfortably middle class that way. My view is that you get rich by being greedy when the opportunity is there and its quick not over a lifetime. You get rich by luck or skill once and then concentrate on staying rich. Note: You go big when cheap 2008/9 not 2007. You borrow when rates low not 8 percent. You vary the leverage and risk depending on the current situation (momentum, valuation etc). You add to winning positions and get out if it goes against you.
"My view is that you get rich by being greedy when the opportunity is there and its quick not over a lifetime. You get rich by luck or skill once and then concentrate on staying rich. Note: You go big when cheap 2008/9 not 2007. You borrow when rates low not 8 percent. You vary the leverage and risk depending on the current situation (momentum, valuation etc). You add to winning positions and get out if it goes against you." ---- I second all what you say, absolutely right. You said that you were 32 in 2008. That's me in 3 years, I'm 29 now. I think it's very possible that there will be a major correction within the next 3 years, maybe even another 50% drop. And when markets start rising again, I'll do the same as you - put my chips on the table and go all in. Increase positions on the way up. Use leverage. And then after some years I hope I'll be in the same situation as you're now Your story is indeed inspiring! Oh and since I'm a swing trader, I hope I'll also profit big on the way down
Please remember that the best rich family, such as Rothschilds, does not speculate the real estate. I guess they may not invest stock market too. "Lender shall win over investor in the long run" might be their legacy many years. Maybe annual 8% winning, with no risk at all, will take all the asset in the world, after some hundreds of years.
Stock Market has been open in Amsterdam roughly 400 years ago, to encourage speculation for tax purpose (if I heard correctly) However, money lending with interest was more than 2000 years. Suppose one average-asset person collect compounding interest 8%, for 2000 years, how much asset he have now? Of course inflation (roughly average annual 3% long term?) should be considered and cash amount in dollar in account is NOT important, buy probably the rate of absorption from other people asset. By the zero-sum principle of capitalism, some should be bankrupt every single year.
JK - Who cares about 2000 years? I care about my lifetime. Ever heard of revolutions ? They happen when the mass poor get pissed off. Your ideas of one family getting the whole global wealth are crazy. Im sure you have no clue about the details of Rothschilds wealth, not that they remotely in the same position as most people anyway.
The biggest part of the fortune of the Rotschildts was a result of having information about the french-british wars, that was not available for the rest of the world. If I remember correctly, Rotschildt misiniformed the people and spread the rumour that the french won the war, although the Rotschildts knew that the french lost the war. This made markets crash in other countries, so that the Rotschildt could buy cheap. By the time the correct news spread the Rotschildt had bought massively and cheap, making huge profits when the markets rose again. What they did then is a little bit like what this UK trader did.
One of the biggest differences between trading and poker is the number of players allowed. In trading the number of players allowed in incredibly vast. There are so many traders that trading allows for far more winners than poker. Often in poker there will be only one winner per game. Often in trading there will be multiple winners per game.
"Often in trading there will be multiple winners per game" Actually in finance everybody could be a winner... buy and hold an index for decades. Who would lose? There's no counterpart, nobody needs to be short in the stock that you're long. That's the key difference for me.
IMHO, there are ONLY three such cases, in capitalism. 1)equity 2)land(real estate) 3)bond. As long as the average income in the nation increase, every participant could be a winner in the long run. Therefore the three are zero-sum games after the index. However, future/option and blackjack/poker does NOT follow index and currency inflation. Those are strictly zero-sum games. Furthermore shorting equity is NOT zero-sum.