If AAA' is MrMarket, then you are Alan Greenspan. So tell me Al, does being the Fed chairman make you a chick magnet? Back to MrMarket.... the fact is the guy picks some good stocks. Perhaps his money management / risk management is not conventional, so don't use it. Use your own. Now I say this with one reservation, if the 15% profits are coming after significant drawdowns first, then no it is not good and the stock selection is not good. But if the profits are coming with 8% or less drawdown, then we have a 2:1 reward risk ratio and it is fine.
Hi AAA when I read your post I started laughing, you have his style down pat. The only thing you might have added is ka chingo. Great post AAA
Well, looking at FRED at the beginning of the year it was at ~20. It dropped to ~15. Since I am not Al, it is hard for me to do the math. But, even with my third grade education that is more than 8% drawdown. In fact, my third grade education tells me that is 3X the 8% dd you mentioned as acceptable in your post.
Wow! I confess that I have read many of your posts and find them well-written. But to find out that it has been done with a 3rd grade education!!! that is remarkable. I think Jethro Bodine made it that far, and he wasn't nearly as literate as you are. Seriously, you make a good point, the very one I was alluding to. I just went to his website and it turns out that he bought the stock for 39.27 in May 2002. On my charts the split adjusted drawdown approaches 50%!!!!! Okay... so maybe he isn't the best stock picker on the planet.
Relax, I am not MrMarket. I am much better looking, but unfortunately cannot bench as much. I did not write the original post, it came off his yahoo site. So he gives his yahoo members the same treatment he gave us. I think anyone who is not purely daytrading faces the task of finding appropriate stocks. If one is trading on a timeframe of a few days to a few weeks, you want to be in stocks that have the potential to move and move quickly. MrMarket's methods do seem to uncover more than his share of stocks with good momentum. The Investors Daily 100 list is another pretty good source.