I completely agree that stock picking is very difficult. Most of the traders who consistently beat the indexes are people you have never heard of and there are not alot of them. I think I saw a stat recently that showed that only 5 newsletters that had been published over the last 20 years had beat the indexes each of those 20 years. That is obviously a very small amount.
If you just listen to Cramer one time you can come to realize how arbitrary a decision to buy or sell an individual stock can be. His process is so random as to how he decides whether he likes or dislikes an individual stock, and he is a very intelligent guy.
My website describes my approach which is systematic, and why I believe it gives me an edge over most people. Very few people are disciplined enough to develop a set of rules and follow them without deviation. Of all of the traders I know, only one of them does this as well as I do.
As to the comparison to the Harvard MBA’s, I do not know one single trader who is consistently profitable who has a background like that. I do not know why that is the case, but if I had to guess I would say that it has to do with over optimization in their models. Curve fitting your research to closely to data becomes more of a danger the smarter you are. There is an argument out there that says that being too intelligent becomes a negative for trading.
Maybe that makes me a dumb…. LOL! Once again, all the contest result was designed to do was provide proof of a return in an account. If you want a second one, you can go to the following website. http://www.precisioncapitalmanagement.com.
This was a small account that I traded a few years ago which you can see by the dates. It was funded with the amount it was because that was going to be the target client, in the 30 – 50k opening balance range. This table was approved by the NFA after the previously described 6 month delay they gave me. So now we have a second account that shows a superior return. This company is defunct because I closed it after running tired of paying salaries for staff for something that just was going nowhere. However, the employee that created the site which I think is lousy by the way but he was so insistent on keeping it the way it is, has lifetime free hosting. As a result, I think that site will stay up until a time when for whatever reason he decides to take it down. I have no contact with him at this point so I do not know what he is doing with it.
It is possible that business could be re-started at some point, since the NFA approval is already done. It was still up when I checked the other day. I will certainly change the format of the site as it looks crappy to me. You will see that return is better than this years in percentage terms. This year has not been a good year for me so far trading.
I do not believe there is any luck at all in trading, you do your research, develop your systems, and make the trades. If you have read my commentary in here this year regularly you know that I have been telling everyone a big rally was going to take place this year. Now it is here. I did not get the low in terms of the buy point, but my model has not given me the entry yet. How did I know? I didn’t know anything, it was just my research that told me this would happen and it was correct.
Follow Stevie Cohen and Bill Dunn. They are traders that have beat the indexes year in year out for many years in a row. Bill Dunn is not open to new investment, he has had I think over 20% on his fund for 25 straight years. ( Not sure about this but I think this is accurate ). He is the Tiger Woods of that field.
As in all fields what the experts tell you as far as indexing etc is full of conflicts of interest. The older I get the more I realize that about 80% of what is perpetuated on the public is disengenous BS designed to enrich the insiders. RE is a perfect example of that with all of the statements by Leareh etc.. Brokers are notoriously bad traders so whatever you do, do not buy stocks recommeded by brokers.
I hope I have answered your questions, this is the best that I can do to address them. You have to keep in mind that I have studied the markets and traded them for more than 20 years, so I should be a little bit better at trading than most even if I am a dumbo.
