# Misunderstanding of maximum drawdown

**URL:** <https://forums.collective2.com/t/misunderstanding-of-maximum-drawdown/12207>\
**Category:** Trading and Markets\
**Created:** [October 19, 2018, 9:46am UTC](https://forums.collective2.com/t/misunderstanding-of-maximum-drawdown/12207 "2018-10-19T09:46:47Z")\
**Posts on this page:** 4\
**Page:** 2

<div class="post-metadata">

**Author:** ![C2-LEADER](https://yyz2.discourse-cdn.com/flex028/user_avatar/forums.collective2.com/c2-leader/32/12306_2.png) [@C2-LEADER](https://forums.collective2.com/u/C2-LEADER)\
**Post date:** [October 20, 2018, 4:57am UTC](https://forums.collective2.com/t/misunderstanding-of-maximum-drawdown/12207/21 "2018-10-20T04:57:01Z")

</div>

> [@DogZebra\_Investing](#):
>
> An example - let’s say you’re a hedge fund manager. You invested a large portion of your fund in AMZN 6 years ago. After 1 year you have a nice gain. If you’d kept a new investor out of it 5 years ago, he’d be missing out on a huge winner in the portfolio.
> 
> You have to think as an investor and not a short term trader. If I’m an adviser/RIA/manager, and I put my clients in various index funds/stocks/etfs that are **long term** holdings, I’m not just gonna have them sit in cash in perpetuity. **That** makes no financial sense.

Very good example. What’s going on if this hedge fund manager invested a large portion of fund in Dust bank 6 or 10 years ago?

---

<div class="post-metadata">

**Author:** ![DogZebra\_Investing](https://yyz2.discourse-cdn.com/flex028/user_avatar/forums.collective2.com/dogzebra_investing/32/5086_2.png) [@DogZebra\_Investing](https://forums.collective2.com/u/DogZebra_Investing)\
**Post date:** [October 20, 2018, 5:30pm UTC](https://forums.collective2.com/t/misunderstanding-of-maximum-drawdown/12207/22 "2018-10-20T17:30:33Z")

</div>

Probably out of business 😂

---

<div class="post-metadata">

**Author:** ![ForexTrader8](https://yyz2.discourse-cdn.com/flex028/user_avatar/forums.collective2.com/forextrader8/32/12306_2.png) [@ForexTrader8](https://forums.collective2.com/u/ForexTrader8)\
**Post date:** [October 21, 2018, 12:32am UTC](https://forums.collective2.com/t/misunderstanding-of-maximum-drawdown/12207/23 "2018-10-21T00:32:32Z")

</div>

Time reveals that which reason can not…

---

<div class="post-metadata">

**Author:** ![C2-LEADER](https://yyz2.discourse-cdn.com/flex028/user_avatar/forums.collective2.com/c2-leader/32/12306_2.png) [@C2-LEADER](https://forums.collective2.com/u/C2-LEADER)\
**Post date:** [October 22, 2018, 1:27am UTC](https://forums.collective2.com/t/misunderstanding-of-maximum-drawdown/12207/24 "2018-10-22T01:27:14Z")

</div>

> [@DogZebra\_Investing](#):
>
> Probably out of business 😂

It’s easy to talk about history, but no one knows for sure what’s going on in the future!

[Previous page](https://forums.collective2.com/t/misunderstanding-of-maximum-drawdown/12207.md?page=1)