Skip to main content
No. of Recommendations: 25
Yeah.....problem is, without the active their *is* no passive.

Even worse.
Without the existence of *dumb* active, you can't do well at *good* active.
Beating the market is a roughly zero sum game, so for me to win that game I have to find some sucker to lose against me.

Maybe MI works less these days not because of the quant funds, but because too many of the muppets have bought index funds.
You can get rich stealing lunch money, but only if a certain minimum number of people buy lunch rather than brown bagging it.

As a distant aside, I heard a thing on the radio about how almost all "exclude X" diet programs fail. Their conclusion was you might as well eat what you like and be happy.
I was thinking about analogies in investment management rules.
Would there be a diet book (sorry, investing book) that promised you'd do better if only you DON'T do a certain thing?
But otherwise letting you continue doing any and all stupid things you like.

Here's my first inspiration:
Buy and sell whatever stocks you want, on gut feel, charts, astrology, Cramer, or any other reason.
If you have no method in mind then dartboards and dice are recommended, but any method is fine.
But you have to follow these rules:
(1) Keep total trading costs under half a percent of portfolio a year, preferably lower.
(2) You can sell whatever you like, any quantity you own, but it has to be on a day that the market is its highest in the last month. You can't buy on those days.
(3) You can buy whatever you like, any quantity you can afford, but it has to be on a day that the market is its lowest in the last month. You can't sell on those days.

If on some random day you decide to trade, about 10% of the time you'll have to wait more than 7 weeks before you're allowed, average about 2.6 weeks.

Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.