A little story recently brought to mind. At the end of the 90s I worked at a bank where the stock went up on a 45 degree angle for the first 5 years I worked there. People all around me marveled at the bank stock, called it âSafeâ and had all of their 401k retirement savings in that bank stock. Then in the middle of 1999 the bank stocks got chopped down by mediocre earnings reports. Our stock dropped off a cliff with the rest. People wept bitterly as they held on to the stock as it plunged. When it eventually came to rest a few months later they had lost half. Before we had time to collect ourselves the bank merged with another bank (second merger in 2 years) and then shortly afterward our whole IT department was out sourced to a high flying tech. Seeing a chance to get their money back people who had lost in the bankâs stock drop decided to put all of the remainder of their 401Ks in this high flying tech in the new economy. Most were all in by October, 2000. Shortly after the IT companies stock crashed with the markets. I heard many people almost in tears complain about their big loses as they held on as the stock set new lows. They just knew in the new economy the stock would recover. It never did recover. First the bank⦠Then the IT Companyâ¦some had lost more than 90% of their retirement savings in a matter of months. Because of greed and fear these people broke all the rules we learn as traders. They had not paid attention to markets, risk, position size and you name it they forgot to do it. These were some of the smartest people I had ever met. A number of these people were geniuses at what they did. Some of these people I still talk to and they are still working to recover those losses. I survived because I was a trader by then and I later retired with most of my funds intact. Most genius investors or traders never get beyond the concept of markets or market trend much less manage positions or risk. For example count how many traders you know that survived through the bear market that followed the bull market of the 1990s. Many 90âs bull market geniuses lost it all in the bear that followed because they could not trade it. Just like a huge number of profitable traders washed out in 2008. Markets are a form of Artificial Intelligent with a large rule base and with only some of those rules are in effect at one time. Most geniuses build their rules statically into a strategy based on current markets rules and then trades this market expecting the rules will never change. They do great for a time in the market. Then the market shifts to some new rules in their rules base creating a different version of market. The majority of the geniuses (95%) and their static rules lose money during the market shift. Most geniuses never recover to trade again. A few (5%) are true geniuses because their strategy can trade in any set of market rules.
Most people with genius level intelligence are used to being right 90%+ of the time. There is no way in the world to be right that frequently when trading. I don't care if your profit target is 1 ES tick, you simply won't be right 90% of the time. Many people who are used to that can't adapt. The trading genius accepts the fact that anything from 30% to 60% winning trades is more than sufficient to do well. Obviously, your winner to loser size ratio has to be larger the lower your winning percentage, but you can be successful with only 30% winning trades.
I can only add to and repeat what others have posted. Maybe too many geniuses let their egos get in the way. The markets are a humbling force, deceptively simple looking in many aspects, easy to get complacent about, and an equalizer to a large extent.
because the genius make more money in their other endeavors. trading game is a waste of intelligence. waste of intelligence to work in the riggged casino. The black-scholes option models was created by geniuses. and geniuses built those computers run the quant HFT machines. a genius created the subprime CDO market with their mathematical models and a genius created the derivative markets. a genius cracked the human DNA and a genius invented the transistor etc. a genius hacked into 'terrorist' gmail acccounts. also, the guy who invented the electricity or AC/DC is rich. the world needs genius to discover new cleaner forms of energy like fusion energy..
"Genius" is a broad term. There are many different kinds of intellect. In a like manner, the question could also be: Why don't all geniuses win at casinos? For starters, the casino is set up a certain way. That is the "system". Some can beat the system, some can't. Some beat the system because the way it is set up and their place in it and has nothing to do with their intellect. A true genius will often have sponsors anyway that alleviate any distractions of a monetary kind. Could Einstein have beat the market? Frankly, I think it's more important that he spent his time doing something more productive.
I just read about some twats who wrote an app for the Iphone, which makes a sound of a rifle cocking and firing. They claim to have made over 1 million in ad revenues. More then 99.9999999% of you will make with 10,000,000 times the effort. suck on that.
if intelligence were a clock face,12-3 would be 40 -90 iq,3-6 would be 90 -120,6-9 would be 120-150,9-12 wold be 150 to 200,the closer you are to 12, the closer you are to 12 ..3-9 is probably 95% of population
Who said we're not? I haven't read any of the responses, and I'm sure this has been said, but Genius takes many forms. I know musical geniuses that can't do math to save their lives. And this stuff is more like math than music. I had a friend in highschool who scored in the upper 1500's on the SAT as a Junior in highschool. And that was before they curved the test. Yep...they curved the test in the 1990's, so scores before that mean more. He radiated intelligence...you felt it when you talked to him. Anyway, this guy quit highschool in his Jr. year, then clepped a bunch of college courses and finished his Masters in Literature before he was 20. Yeah...there are child geniuses who do more than that, but I knew this guy personally. Wanna know what he ended up doing? First selling artwork on the Grateful dead tour, and then getting a low-level computer tech job. My point is that he didn't want it. You gotta want it! I've always viewed intelligence as a tool to get what you want. Figure out a way. But I've noticed that extremely bright people...real geniuses...tend to not be materialistic like that. I truly believe that they can fully wrap their mind around the pointlessness of it all. If you have a clean, safe home, friends, and you're meals are always there and they are always hot, then really...what does it really matter how new or expensive your car is? If your house is bigger, its a longer walk to get to your bedroom. For me personally, I have a running joke that I'm a "near genius". I was in Mensa, but it was a bunch of housewives talking about how smart they were, so I only attended one meeting. I've always felt that I'm just smart enough to figure out how to get what I want, but dumb enough to think that material stuff is important. So...IMHO, the right kind of real genius, a quant, lives on such a rarified plane that they don't pursue this stuff. Thank God for the rest of us who are only near geniuses and still want really cool cars. Edit: Forgot to say. I work with a handful of engineers...each one has a master's degree...one from MIT. One has a degree in mathematics. They work hard for the money. But whats crazy is that they really don't watch what is happening to their retirement funds....just throw it in a mutual fund and hope for the best. WTF? I don't get that...go to school for so many years, work hard to become the top of your field, and then take the fruits of your labor and don't administrate it well? If they did, they could retire years earlier...even following that age old model for middleclass wealth. It stumps me. SM