The opinions expressed in these forums do not represent those of C2, and any discussion of profit/loss is not indicative of future performance or success. There is a substantial risk of loss in trading. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. You should read, understand, and consider the Risk Disclosure Statement that is provided by your broker before you consider trading. Most people who trade lose money.

Collaboration and Competition


#1

"Risk can not be destroyed, only transformed."
Corey Hoffstein
Corey has an Asset Management company whose focus is risk management. Last week, he published an interesting article called “Fragility Case Study: Dual Momentum GEM”, generating a passionate discussion on Twitter with Gary Antonacci, creator of “Dual Momentum GEM”.
Below I include the link of this publication, for people interested in risk management.
https://blog.thinknewfound.com/2019/01/fragility-case-study-dual-momentum-gem/
Best,
Gonzalo


#2

Jim O’shaughnessy wrote the following tweet a few days ago:
1/Successful Active Investors Generally Ignore Forecasts and Predictions.
“I have no use whatsoever for projections or forecasts. They create an illusion of apparent precision. The more meticulous they are, the more concerned you should be.”
~Warren Buffett


#3

Completely agree. IMO it’s a complete waste of time. 50% get it wrong and 50% get it right, typically flip flopping the next time. Usually the masses are also wrong in unison. Like the Buffett quote.


#4

Couldn’t agree more @DogZebra_Investing! I haven’t met a forecaster that is rich from investing in himself yet except from the subs paying him for advice! :grin:


#5

heres one way to predict-

Imagine getting a mail from a little known stockbroking firm. The mail predicts that a certain stock will rise this week. You leave the mail aside, as you have seen enough such mails.

Next week, the Baltimore Stockbroker mails again, with another tip-this time, of a stock going South. The message turns out right, and you decide to mark the Baltimore Stockbroker as ‘not spam’.

Week Three. Another hit. And your interest is piqued.

This goes on for ten weeks. Ten accurate predictions from the Baltimore Stockbroker.

You, the guy who recently retired with a substantial gratuity in the bank, are hooked.

Week eleven, the Baltimore Stockbroker sends you an offer to invest money with him, for a substantial fee of course. There is the usual caveat of past performances not guaranteeing future success, but the Baltimore Stockbroker nudges you to consider his ten week streak.

You do the math. Every week, the Stockbroker had a 50% chance with his prediction. Either he would be right, or wrong.

Combining the probabilities for ten weeks, the chances of the Baltimore Stockbroker to be right ten weeks in a row work out to… 1/2 x 1/2 x 1/2……ten times… =1/1024.

You consider. The Baltimore Stockbroker must be onto something. And it would be worthwhile to invest your nest egg with him.

You go in for the offer .

_ Things, from the view of the Baltimore Stockbroker, are a bit different ._

What he did, was start out with sending 10,240 newsletters!

Of these, 5120 said a stock would go up, and 5120 said otherwise.

The 5120 who got a dud prediction never heard from the Baltimore Stockbroker again.

Week Two, the Baltimore Stockbroker sent 2560 newsletters, and the following week he again halved the number, based on who got his correct prediction.

This way, at the end of week 10, he had ten people, convinced he was a financial genius.

That’s… The power of probabilities, cons, and the impact of mathematics on daily life… Just one aspect!

Borrowed from ’How Not to be Wrong: The Hidden Maths of Everyday Life’ by Jordan Ellenberg.


#6

Yes @QFund! And of course they would highlight the winners and never mention the losers! lol…:rofl:


#7

¨Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves¨.
~Peter Lynch

I share with you an interesting publication by Morgan Housel called “Origins of Greed and Fear”.


#8

Good article, as are all of Housel’s.


#9

“Take index. Blindly invest monthly surplus for the next twenty years. You’ll be far ahead of many investors.”
~D. Muthukrishnan

Below I share with you a very interesting publication by Nick Maggiulli: Even God Could not Beat Dollar-Cost Averaging. The Problem with Buying the Dip
Best,


#10

" If you looking for next 3 years return, valuation is important. For next 5 years or more returns, it is quality that is important".
~D. Muthukrishnan

A very important and interesting reading:
Which Factors?


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