yadayada Posted May 4, 2014 Share Posted May 4, 2014 Some japanese hermit autistic savant turned 13k$ into 163 million$ over like 8 or 9 years lol. I think a 200%+ annual return? http://caps.fool.com/Blogs/check-out-this-japanese/129372 This guy basicly was on the right end of a lot of big mistakes :D Most expensive thing he bought so far was 2 wii consoles i think haha. Link to comment Share on other sites More sharing options...
Guest Posted May 4, 2014 Share Posted May 4, 2014 Don't forget about his nice downtown condo. If true, that is one crazy success story. Link to comment Share on other sites More sharing options...
PatientCheetah Posted May 5, 2014 Share Posted May 5, 2014 It could be profitable. Day trading has a bad name because it attracts many new comers with little experience/strategy/capital, thus the high failure rates. Sophisticated guys like HFTs, DE Shaw, Renaissance Tech, etc seem quite prosperous to me. Link to comment Share on other sites More sharing options...
randomep Posted May 5, 2014 Share Posted May 5, 2014 It could be profitable. Day trading has a bad name because it attracts many new comers with little experience/strategy/capital, thus the high failure rates. Sophisticated guys like HFTs, DE Shaw, Renaissance Tech, etc seem quite prosperous to me. I disagree with you..... Look at SAC, they turned out to be a insider-trading scam. I think the ones you quoted that are successful are making money off other day traders. That is like the pro poker players in vegas making their living off the "dead money" that comes in from amateurs. Link to comment Share on other sites More sharing options...
yadayada Posted May 5, 2014 Author Share Posted May 5, 2014 the exact same thing with valueinvesting. If I buy a stock expecting like 150% upside, Im buying it off a sucker if I manage to be right a lot. Because that person is selling me a winner. Unless I am wrong ofcourse. Only difference is that day traders look at technicals and we look at fundamentals. Unless I buy it off someone with a different strategy and timeline, i guess then it is not really a zero sum game. Link to comment Share on other sites More sharing options...
randomep Posted May 5, 2014 Share Posted May 5, 2014 the exact same thing with valueinvesting. If I buy a stock expecting like 150% upside, Im buying it off a sucker if I manage to be right a lot. Because that person is selling me a winner. Unless I am wrong ofcourse. Only difference is that day traders look at technicals and we look at fundamentals. Unless I buy it off someone with a different strategy and timeline, i guess then it is not really a zero sum game. I'd have to disagree again. Day trading (in my simplistic definition) does not ever look at the underlying security. They just look at the quoted price of the security. In a market panic, they will in theory let the price of something go to zero. Successful day traders need the world to believe that you can make money day trading, in order to create suckers. The value investor is calculating the price of an investment for trading. That's how the NYSE got started on wall street under a tree. After that reached some critical mass, day traders came in and traded off the noise. Value investing is price discovery, and in times of panic create a floor for the market (say in 2009). Value investors don't necessarily need suckers. For example Hanover Foods, a well-known security on CoBF. We area creating a price at which the insider bickering family can sell. Without us, capitalism just won't work as well, cos the founding family cannot get a decent price for their grandfather's investment. Link to comment Share on other sites More sharing options...
yadayada Posted May 5, 2014 Author Share Posted May 5, 2014 we might be arguing past each other here, but if you want to beat the market instead of just buying index funds, don't you want all these people trading for many different reasons? Some of the stocks I buy are really insane bargains. And then I wonder who the hell is selling them to me. If everyone is v rational, studies the financial reports before buying etc, it seems it would be really really hard to find cheap stocks. And you might as well buy an index. Also I might be selling a stock that is aproaching fair value to a day trader, Im done with it, but he might think there is some momentum left in it. But then I guess he would have to sell it to some other sucker, so he would need other suckers. So I guess I mostly agree with you here haha. Link to comment Share on other sites More sharing options...
Hielko Posted May 5, 2014 Share Posted May 5, 2014 You could make the same argument about day traders. They also provide liquidity to people who want to buy or sell: they don't have to trade against other day traders and they don't need to create suckers. Day trading is probably most profitable when you are the only one in the market doing it. The problem is that this is not the case today, and that most amateur day traders will be competing with traders with better technology and a better understanding of the market. Link to comment Share on other sites More sharing options...
Palantir Posted May 5, 2014 Share Posted May 5, 2014 I'd have to disagree again. Day trading (in my simplistic definition) does not ever look at the underlying security. They just look at the quoted price of the security. In a market panic, they will in theory let the price of something go to zero. Successful day traders need the world to believe that you can make money day trading, in order to create suckers. Would you say the same about momentum-driven strategies? Link to comment Share on other sites More sharing options...
PatientCheetah Posted May 5, 2014 Share Posted May 5, 2014 If you can make money on a consistent basis, why cares what the underlying strategy is? Most of us are drawn to value investing because it makes intuitive sense and has a very good record of making money. There are clear suckers in value investing, particularly with cigar butts. With compounders, you can still argue that it's an investment horizon arbitrage. If you lose money, you are the sucker and vice versa if you make money. Link to comment Share on other sites More sharing options...
Parsad Posted May 5, 2014 Share Posted May 5, 2014 One of Indirectinvestor's friends who I met a few years back did the same thing during the dot-com era. Daytraded his way to $150M! At one point, he was accounting for several percentage points of total daily volume traded on many of the big dot-com stocks. No idea what he is doing now. Cheers! Link to comment Share on other sites More sharing options...
yadayada Posted May 5, 2014 Author Share Posted May 5, 2014 Did he sniff and scratch his crotch a lot the last time you saw him? Link to comment Share on other sites More sharing options...
randomep Posted May 5, 2014 Share Posted May 5, 2014 If you can make money on a consistent basis, why cares what the underlying strategy is? Most of us are drawn to value investing because it makes intuitive sense and has a very good record of making money. There are clear suckers in value investing, particularly with cigar butts. With compounders, you can still argue that it's an investment horizon arbitrage. If you lose money, you are the sucker and vice versa if you make money. Well it is a VERY important issue! Because, to know that you can make money consistently in the future you have to have an understanding why. With value investing you are taking advantage of the fact that the market will return something positive on average (5-10% take your pick) and on top of that you are taking advantage of inefficiencies. As many have commented above, the inefficiencies can be due to suckers or just someone who is going into the trade with eyes wide open. In the latter case, you can say it is a win-win for both parties. In this case I don't have to believe I have special God-given ability above all others. I can say that I can virtually be an average value investor and still do well. But that is not the case with day trading. Link to comment Share on other sites More sharing options...
randomep Posted May 5, 2014 Share Posted May 5, 2014 I'd have to disagree again. Day trading (in my simplistic definition) does not ever look at the underlying security. They just look at the quoted price of the security. In a market panic, they will in theory let the price of something go to zero. Successful day traders need the world to believe that you can make money day trading, in order to create suckers. Would you say the same about momentum-driven strategies? Palantir: what do you mean "say the same", say what? I have never looked closely at momentum or day trading, but I GUESS momentum requires some underlying knowledge of the security, but nonetheless it is a strategy that is based a lot on the quoted price. So you are trying to outguess what they think, so it needs the "sucker" and is similar to day trading. Link to comment Share on other sites More sharing options...
Parsad Posted May 6, 2014 Share Posted May 6, 2014 Did he sniff and scratch his crotch a lot the last time you saw him? What the heck does that mean? Link to comment Share on other sites More sharing options...
PatientCheetah Posted May 6, 2014 Share Posted May 6, 2014 I'd have to disagree again. Day trading (in my simplistic definition) does not ever look at the underlying security. They just look at the quoted price of the security. In a market panic, they will in theory let the price of something go to zero. Successful day traders need the world to believe that you can make money day trading, in order to create suckers. Would you say the same about momentum-driven strategies? Palantir: what do you mean "say the same", say what? I have never looked closely at momentum or day trading, but I GUESS momentum requires some underlying knowledge of the security, but nonetheless it is a strategy that is based a lot on the quoted price. So you are trying to outguess what they think, so it needs the "sucker" and is similar to day trading. Its not guessing. Its a statistical tendency - positive/negative information tend to cluster together/exhibit autocorrelation. Sort of common sense - well run companies in good industries tend to expand in value and badly run companies in declining industries tend to shrink in value (e.g. Google vs newspapers). Why are you dissing quoted price? You don't think long term price trend convene information (5 to 10 years charts)? Link to comment Share on other sites More sharing options...
PatientCheetah Posted May 6, 2014 Share Posted May 6, 2014 Did he sniff and scratch his crotch a lot the last time you saw him? What the heck does that mean? I think he is using that as a proxy for how popular the guy is with the ladies which is another proxy for his net worth Link to comment Share on other sites More sharing options...
Parsad Posted May 6, 2014 Share Posted May 6, 2014 Did he sniff and scratch his crotch a lot the last time you saw him? What the heck does that mean? I think he is using that as a proxy for how popular the guy is with the ladies which is another proxy for his net worth I must be getting old! Thanks for the explanation. Cheers! Link to comment Share on other sites More sharing options...
randomep Posted May 7, 2014 Share Posted May 7, 2014 I'd have to disagree again. Day trading (in my simplistic definition) does not ever look at the underlying security. They just look at the quoted price of the security. In a market panic, they will in theory let the price of something go to zero. Successful day traders need the world to believe that you can make money day trading, in order to create suckers. Would you say the same about momentum-driven strategies? Palantir: what do you mean "say the same", say what? I have never looked closely at momentum or day trading, but I GUESS momentum requires some underlying knowledge of the security, but nonetheless it is a strategy that is based a lot on the quoted price. So you are trying to outguess what they think, so it needs the "sucker" and is similar to day trading. Its not guessing. Its a statistical tendency - positive/negative information tend to cluster together/exhibit autocorrelation. Sort of common sense - well run companies in good industries tend to expand in value and badly run companies in declining industries tend to shrink in value (e.g. Google vs newspapers). Why are you dissing quoted price? You don't think long term price trend convene information (5 to 10 years charts)? Of course quoted price determines our actions, whether to buy or sell. However, reading too much into it is looking for patterns in noise. Look that's how I operate, I only sometimes look at the charts. That said, I am guilty of looking at the prices of my portfolio too much. Like every 15min when the markets are open. I can't help myself, but at least I don't act on it. How about you guys on this forum. How often do you look at your stocks? Link to comment Share on other sites More sharing options...
yadayada Posted May 7, 2014 Author Share Posted May 7, 2014 Did he sniff and scratch his crotch a lot the last time you saw him? What the heck does that mean? On the sniffing: And the scratching was already explained :D . Kind of the cliche of what newly rich people do. That is the joke. Link to comment Share on other sites More sharing options...
Orange Posted May 7, 2014 Share Posted May 7, 2014 I can say that I can virtually be an average value investor and still do well. But that is not the case with day trading. That is a great point. In most strategies that have long term holding horizons, the average investor usually makes some money over the long term. And even if you don't, its pretty damn hard to get wiped out as a value investor, especially if you're diversified. The average day trader seems to get wiped out pretty quick. The problem with any activity is, you're going to be below average or average at it for a while when starting out. Unless you're planning on paper trading for years and years as you build your system, taking up day trading is a pretty dumb thing to do. Link to comment Share on other sites More sharing options...
EliG Posted May 7, 2014 Share Posted May 7, 2014 This is hilarious: Ten Surefire Trading Rules To Make You Rich ;D ;D ;D Link to comment Share on other sites More sharing options...
PatientCheetah Posted May 8, 2014 Share Posted May 8, 2014 This is hilarious: Ten Surefire Trading Rules To Make You Rich ;D ;D ;D I wonder if anyone take those tips seriously - it is obviously a farce Link to comment Share on other sites More sharing options...
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