ps: moreover, when WB wants to learn something, he buys companies… I guess you and I buy books or rent them…that is where the resources thing comes into play…
And you think that I don’t buy private companies? Obviously, that can not be shown as a system here on C2.
Here’s a better book for you. Read “Rich Dad Poor Dad”. It suggests you buy real estate, trade (or one of his other books does), and buy or start businesses. Maybe, I will one day come out with a book that gives specific procedures on how to accomplish it.
> I do have a concern about the system though. Nearly all of
the profit comes from 3-4 relatively big trades in relatively low
volume stocks (check CESI: hours or days can pass without
20K shares trading).
I assume that it doesn’t really plays a role for me with my tiny account as long as there are not many subscribers. In a more distant future that might become a problem.
With respect to CESI: That trade was opened before I subscribed, so it is hard to compare the C2 results with mine. C2 opened the trade on 11/20/06 at $1.32. I bought on 12/04/06 at $1.6295. C2 sold on 1/24/07 at $1.74. I sold on 02/02/07 at $1.7305 (I’ve no idea why that went wrong, Science Trader). These trades were at the wrong date with only 1% volume, so I really cannot tell what would happen at the right date with larger volume.
Read "Rich Dad Poor Dad"
Kiyosaki offers little new. I have done most of these things. Buying real estate these days is like buying at the top of the market. In most markets, rent has trailed housing prices so badly, you will discover the meaning of the word “alligators.” I was a multiproperty landlord for 12 years. It does a fine job of removing the concept of peace from your life.
Buy a business? I bought a “profitable” roofing business from someone once. Even $7000 in lawyer’s fees could not insulate me from a previous owner who had no concept of morality and knew how to fluff profits and hide deficiencies. Lost a bundle on that deal.
Start a business? Horrible idea for most people. They wind up leaving their job, working 80 hour weeks, burning through their bank account, and going back to work a few years later much the poorer for the experience. There are good ways to start a business, which should be thoroughly reviewed by anyone considering it. But SOMEONE must make up the estimated 70-90% of businesses that fail the first 5 years. Ever see the cost of outfitting a new mall storefront or a restaurant?
Trading? The odds are not particularly good for most people. A few make money at it. Most will drop a bundle.
Doing these things is a crapshoot for most people. These kinds of things are in books often written by people who do not know the concept of failure, nor can they differentiate theory from reality. I have seen some interesting reviews of these kinds of books from industry experts. They are not very kind to the authors.
One example is the real estate investment books. “You can negotiate flexible terms with owners!” I laughed when these people called me with various plays on creative financing - oh, the naivete!!! Then there was the concept of “buy wholesale, sell retail!!! - how to identify ‘don’t-wanters’ and buy the house at bottom dollar!!!” Don’t-wanters are supposed to be people who want to get out of an “alligator” - a house that generates considerably less rent than its costs. Problem is, those don’t wanters are probably going to be you in a couple of years if you buy that rental property…
Truth is, a 9-5 job with benefits and pays well leaves these other things in the dust for most people. (and if someone disagrees, remember that just because someone did it successfully has nothing to do with the broad general experience of the average person who tries this. That is called “anecdotal” evidence and is near worthless for predicting the success of others).
My apologies… I did not know that you are a Market Wizard…
Most of my real estate is International. I trust my property manager, and have not had any problems. I also used a real estate lawyer for the contract and visited the properties before I bought them.
My friend on the other hand had a bad property manager in Texas and did not make money on his deal.
So, yes, location, property management, and timing are important buying real estate.
The problem most people have is they think after reading the book, they should go out and buy property and hope that it makes them money, when like you stated prices are high right now in America.
As for buying a business, did you have expertise as a roofer? Did you do that kind of work before? Did you have a plan to add value to the business?
The business I am buying relates to my expertise. I have ideas on how I can add value to the business. Plus I believe it has good demand for the products and services.
The problem is, most people who read the Kiyosaki and similars do not have much experience with the domain of the business, real estate, and other things.
Most people who read these books are not in the realm of international, REITs, commercial, etc. That is beyond their finances, sophistication, or scope. Most people buy a little duplex, a second home, open a small business, etc. But even having experience is no guarantee of success. And I would never suggest people buy most real estate now. A big part of the reason that residentials (and perhaps others) went up so much is low interest rates. If we go from 6.8 to 10.8 percent mortgage interest rates in the near future, you might see a significant implosion in the residential market. I still amaze myself that houses went from $150,000 to $350,000 in some areas in such a short time. I would NEVER load up on much now…
Roofing wise, I had quite a few years dealing with subs and others. The problem was, the business was riddled with so many problems and other things I couldn’t begin to describe, that closing it became the only option that restored sanity.
> I have read portions of Market Wizards book where I did come across Ed, but did not read the whole interview…
And yet you used the exact words he did. You are psychic.
Why not use your powers to predict the future(s) for a change ;-).
I guess I might have heard it from somewhere, I can’t remember…
>Of course you are right.
I disagree. A system can be holding positions long term and still end up scalping in the end. The average trading length has little to do with it. As one wise moose said, it is only what you keep that counts…
>A system can be holding positions long term and still end up scalping in the end.
Huh? He is holding trades for twice as long as you, yet you are long term and he’s a scalper?
>The average trading length has little to do with it.
Huh?
> As one wise moose said, it is only what you keep that counts…
Some Canadian joke? Never heard that one in the lower 48. You don’t “keep” anything (except the profit or loss) when you trade. You might
want to ponder that idea: it would seem you mostly “keep” losing trades too long. Also, strongly advise you to reread the Ed Seykota chapter as your assignment tonight:
#1 trading rule to live by:
"Cut losses."
IOW, cut them very short, i.e. “scalp” them <G>.
>You are psychic. Why not use your powers to predict the future(s) for a change ;-).
Thanks. I thought I did. Did I not predict what happens ultimately to all the currencies in the world, in this futile war on inflation. My dear Sam, only man (of all species) has the power to destroy himself and that is the way he has behaved throughout history…
Calm down. You are losing cool now. I did not say that I trade for the long term. I only said he is a scalper…
>Some Canadian joke? Never heard that one in the lower 48. You don’t “keep” anything (except the profit or loss) when you trade. You might
want to ponder that idea: it would seem you mostly “keep” losing trades too long. Also, strongly advise you to reread the Ed Seykota chapter as your assignment tonight:
No, it was meant seriously. That is what I meant. It is what “profit” you keep that counts. I know what mistakes I did. I have since then rectified it…
>Cut losses."
No arguments there.
>IOW, cut them very short, i.e. “scalp” them
Disagree. It depends on whether your framework (setup) is still valid…
> I know what mistakes I did. I have since then rectified it…
How so? By changing all your system names to test? Why is
that? What honest reason would you have for trying to imply
all your systems were just tests?
Or maybe they are. Maybe you find “testing” your systems on
C2 less expensive than actually trading them or buying software.
Actually that makes sense. And occasionally some newbie may
even subscribe. Pretty slick really.
>>Cut losses.
> No arguments there.
Except you don’t actually do it.
