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Bruce Brown says:

Yes, you have only be trading for a very short and volatile time frame which even I was able to time quite well using no exotic strategy in the autumn of 1998. Maybe a blind squirrel would have had little trouble snagging over 100% returns in a short time frame like that (after taxes). However, the blind squirrel understands that they will not be able to repeat that on an annual or binannual basis - no matter how appealing it may seem.

Sure, I will assume most investors would be happy since the low of the autumn of 1998. From the day of the low on the Nasdaq on 10/8/98, the Nasdaq actually is up 179% through today. But I wonder how many blind squirrels returned over 13 (X) that of the Nasdaq in the same time frame. A better question would be, how many individual stocks have actually performed at least 13 (X) the Nasdaq in that same time frame? The only one I can name off is XLA. Just for giggles, 13 * the 179% of the Nasdaq is 2327%. I am up a tad more than that, but in all fairness, that does not include taxes. QCOM was there, but it slid back down. In fact, QCOM is now up 1127% from the close that day. I think there is something to be said when a trading portfolio beats that of nearly every individual stock.

There is no way in Hell that I expect that ever to happen again. If I see an annual return of 1/10th of that, then I would be exstatic. It is an anomaly, but it happened, none the less. The result of a market gone berzerk. I am not foolish enough to think otherwise. I dont mistake blind brilliance for a bull market.

I do believe that there are many different strategies that many different people can use to get the best results for themselves. It is a matter of matching the person to the strategy. A ton of work goes into trading, and that is something that somehow should be put into the equation as well. If one can get the same results from two different strategies, then they should take the one that needs the least amount of time. I work full time, am a college student part-time, and am married with child #1 on the way. Time is definitely not at a premium. My research for trades actually takes place in the afternoon and at night when my better half is asleep. I am never even at home to buy or sell when the market is open. It is all done with orders - limit, stop, and market orders from the night before.

So, the reason I have come to the board is that I know my time for researching will dwindle even more with the addition to the family. Obviously some things are more important, so finding a strategy that required so much less time is attractive. This is one reason why I took MikeBuckley up on his offer, because I want to determine just what type of return that a trader must attain to keep pace with the tax-deffered LTB&H. (If I was wrong in the first place that is :)))

I said originally:I know that Bruce adds to his Gorillas often, ...

Bruce Replied:I wouldn't say 'often'. My wife and I have a dual income scenario and have had since the late 80's. We save on a regular basis and continue to put that money to work quarterly.

Sorry, I did not mean to misrepresent you. I was just going off of the comments you made on the Trenchrat board about QCOM. I thought you said that you had added to it 4 or 5 times this year. Even if you did say that, it was an isolated incident. I dont pretend to know your dollar-cost-avg. methods or time-frames. <gg>


My wife and I are like you and yours in that we have not used the money from the returns to add to our lifestyle. We have actually never taken a penny from the account. It is this that makes the compounding, true compounding. Well, at least true compounding after taxes and expenses right?

Thank you for the response, BTW. This actually reminds me of arguing over who had the better year in 1941, Joe Dimaggio or Ted Williams. Williams was the last guy to hit above .400 and led the league in home runs, but Dimaggio had the most RBI's and was a Yankee, of course he won the MVP. They both had great seasons (long, great careers for that matter), maybe it should be left to the fans to argue. The ones that want to root for Dimaggio can, and the ones that want to root for Williams can. You definitely wont get them to agree, even if near definitive proof is shown!! <ggg>

Prestone


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