ZT-forweekendreading:
AsthischartfromRichardBernsteinAdvisorsshows,momandpopstinkituponaprettysteadybasisandhavelaggedgainsineveryassetclass,withtheexceptionsofAsianemergingmarketsandJapaneseequities,overthelast20years.Theaverageinvestorhasevenmanagedtounderperformcash–representedinthechartby3-monthT-bills.
Thechronicunderperformanceconfirmsthatinvestors'aregenerallyplaguedbyemo...[
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Successfultradingislikerunningabusiness,anddeservestobetreatedinaseriousbusinessmanner.
DTismorelaborintensivethatdoesnotrequiretoomuchcapital.youraccountbalanceisyourworking/operatingcapital.simplecompoundingdo...[
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Anedgeintradingmeanspositivestatisticalexpectancy.
1therearenosurethings;butgivencombinationofsignals,sometimeyouhavepositiveexpectancy;
2.holdingpassivelowcostetfgivesyouasharpeabout.3-.4,whichisreallyarewardfortakingonrisks,ieriskpremium;notanedge,butanupwardbiasforstockmkt;
3.manyTAruleshaveslightedge,butwhencombinedtheyarelessthan1sharpe;
4.therearemanyother...[
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Theanswerisnoduetodatasnoopingbias.
Everyonewantsholygrail,andbelievesitisouttheretobefound.Ifyoustartwith1000sofparameterpermutations(saya3MAcombinationtodetermineentry,exit,andstop),optimizesoverparameterspace,andrequire5%statisticalsignficanceforviablestrategy,then5%strategieswillseemtoworkwellinsample,evenwithpurelyrandomlygenerateddata.
Inevitablythose"successfullyback-te...[
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MaybenobankruptcysinceUSAcanprintitswayoutoftrouble,but
1.highinflationcanreducepurchasepower;
2.reducedbenefitsordelinkbenefitstoinflationadjustment(ngtochained-cpiisamoveinthatdirection);
3.increasinglimitsofincomesubjecttoSSiseffectivelyahighertaxonhigh-incomeearners.
SowhatdifferencedoesitmaketohaveaSSonlyinname?
SSisnotsustainableasitstands.butthereislotsofobjectionfroml...[
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Yourhousewentupinvalue.Shouldyoubehappy?Itdepends.
Itcomesdowntothedualroleofhousing:
1.itisaninvestment,andcountsaspartofyouroverallwealth;
2.itisaconsumptionthatispartofyouroveralllivingcost.
Soitentersbothsideofyourbudgetconstraint,ineconomicsterms.
Ifyoucannotmoveduetojobconstraint,bothsidecancels.ifyournexthousewillbeinthesametown,andisgoingtobigger,thenpriceap...[
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Mostonlinestocktradingcontestsencouragerisktaking.onlythosewithconcentratedpositionsinmostriskysinglenamestocksorleverageetfshaveashottowin.
ThecorrectrankingshouldcomparereturnANDrisks.Justcomparingperformanceitselfismeaningless.Thetop2inrecentCNBCcontestsareallinleveragedvolfunds,andbothadmittedtheywouldnotinvestpersonalmoneyinthosetypeofinvestments.
HowcanMahhattanCollegebeatDuk...[
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Manyfactorstoconsider:
1.allexistingfundbalwillbereducedonaproratedbasis.soyoumightmissastrongk
mktrally.
2.interestpaidtooneself,amongthecheapestsourceoffunds.howeverinterestsarepaidwithnon-deductibleaftertaxmoney,whichwillbetaxwdagainuponfinalwithdrawal.
3.moneytakenoutcanbeleveragedupwithmortgageloanorbrokermarginloan.
justmy2c.
[
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Whenyouhaveasmalltradingaccount,butlotsoftimeonhandanddedication,successfulDTcanhelpyouaccumulatecapitalrapidly.Grantedittakeslotsofdisciplinetodoitright.Youraccountismarkettomarketonadailybasis.Marketcanstayirrationallongerthanyoucanstayliquid.Leverageexacerbatesmistakesfromlackofdiscplinesandbadposition/riskmanagement.Lessthan5%ofDTereventuallymakealivingoutofitoverlongterm.
Onceyouracc...[
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Bi-weeklypaymentscheduleorshorter-termmortgagesarepopularamongChinese.Butitisnottherightconcept.
Calculatinglifetimeinterestsavingsaremeaningless.Therearetypicallymarketinggimmicks.
1.ifyoupayoffthedayaftergettingtheloan,yousavethemost,butyoudidnotgettousethemoney.
2.ifyoucanborrowaperpetuityat1%,overthelifetimeoftheloan(whichisforever),youwouldhavepaidthemostinterests,butyougottouseth...[
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