20% above cash guaranteed: Would you invest?

[skyQuake]

I guess it just comes back to the wealth vs exceptional wealth debate.

coming out and sharing your ideas may make you wealthy (a relative term vs the average punter) but to achieve exceptional wealth, you will need an exceptional idea and most likely need to develop that idea entirely yourself, reasons for this:
a) because sharing that idea may harm its value, or b) no one else/very few others will have the expertise to offer you any helpful advice, c) only you will have the drive to push your idea to greater success.

anyway, that's just my general opinion on the matter.

but specifically to your idea TH, I think your idea is conducive to discussion, and you will probably benefit greatly from it.

I hope it goes well for you should you take the leap from hypothetical to actual.

Here's an exceptional wealth idea I'm willing to share:

Lotto

Thoughts?
Lets see where we can take this.

 

[Trembling Hand]

Here's an exceptional wealth idea I'm willing to share:

Lotto

Thoughts?
Lets see where we can take this.

Probably better investment than a standard hedge fund offering 2/20 and a sorry when the take 2/-50 in the third year. :

 

[skyQuake]

Probably better investment than a standard hedge fund offering 2/20 and a sorry when the take 2/-50 in the third year. :

Perhaps a fund that tries to exploit lotto results? With a team of qants and big swinging dick traders... I mean lotto pickers.

 

[Krusty the Klown]

Perhaps a fund that tries to exploit lotto results? With a team of qants and big swinging dick traders... I mean lotto pickers.

Believe it or not, a lottery investment fund has already been tried!

All investments went to playing lotteries.

Strangely, I think it's been wound up!!!!!!!

I'll see if I can find something on it.

 

[marknz88]

Lotto pooling is the way to go if you want to get serious about pushing the odds in your direction ever so slightly...failing that youll probably have a better chance starting up a 'lightning strike pool' and being sucessful.

Any thoughts of spinning out a venture capitilist arm TH, once you rake in the millions?

 

[doctorj]

Yes I like that way of thinking about it. You don't get nothin' for nothin'. You could even see it happening like this,

each 1/4 I put up 20% in escrow for DD protection. And 5% of funds from my own money to the Client (locked away) and I get to margin the client funds.

end of period client get to keep my 5% and doesn't even know how much I made margining his funds . Sounds a bit sinister but that could work.
Yes many will roll their eyes but a DD as always is on the cards, But a large and more importantly quick one if not likely. Using normal MM of 0.5 to 1 % at risk per DAY not per trade things move alone in either direction smoothly. (watch the them bring up the "ya but what if a plane flies into the ...")

Some good points here.

1. yep
2. Absolutely
3. Absolutely
4. yep
5. I guess that getting beyond the capability at a theoretical start up.
6. where is it? or is that fine print I see
7. I really think thats a very important one. To enable a so called "client" to log in daily if they feel like it and see real time progress - or lack of it. Logistically it already possible.

Most in here are happy paying away 4, 5 or even 10 times uplift on IPO for some tinpot miner with an office in West Perth, a patch of red dirt and a business plan that barely addresses anything beyond paying their own staff. A cut of the profits (above a relatively high hurdle) shouldn't be too much for most.
Concerning #5, I don't think it's beyond a small start up operation. In fact, I think it makes it all the more important. The largest risk for this type of operation is transparency. Without good governance, you're just not going to get the level of transparency investors of any meaningful size will require as a condition precedent to investment. No matter how good the theoretical returns.

So do you think you can produce returns with these costs loaded into the business and still make a decent cut for yourself (administration, IT, independant gov)?

 

[skyQuake]

Ok I'll start the ball rolling.

The aim is to try to predict which lotto number will come up.

Don't laugh. There is method to the madness.
Instead of looking at numbers, we will look at physics. With today's computing power, I believe a complex model of a lotto machine can be constructed.
The spinning of the balls in the machine is not random. But so complex as to appear random.
Purchasing the blueprints for the lotto machine from whatever company that makes it, and creating a computer model simulating the spins, durations, position of balls, thing that comes up with a ball (wth is that called), size and weight of balls, elasticity, etc.

Might take a few PHDs a month. Or maybe a year. The beauty is time is on your side. Moore's law means your computer power will increase, and what better time to hire maths PHDs fallen from grace than now! So recently after being booted from their lofty qant desks after 25 sigma events.

...

Failing that, we'll just buy a goddam machine and position the balls EXACTLY. (Will need help of cleaners to photograph the real one before drawing night to see position of the balls)
Then do a few spins

 

[Naked shorts]

Ok I'll start the ball rolling.

The aim is to try to predict which lotto number will come up.

Don't laugh. There is method to the madness.
Instead of looking at numbers, we will look at physics. With today's computing power, I believe a complex model of a lotto machine can be constructed.
The spinning of the balls in the machine is not random. But so complex as to appear random.
Purchasing the blueprints for the lotto machine from whatever company that makes it, and creating a computer model simulating the spins, durations, position of balls, thing that comes up with a ball (wth is that called), size and weight of balls, elasticity, etc.

Might take a few PHDs a month. Or maybe a year. The beauty is time is on your side. Moore's law means your computer power will increase, and what better time to hire maths PHDs fallen from grace than now! So recently after being booted from their lofty qant desks after 25 sigma events.

...

Failing that, we'll just buy a goddam machine and position the balls EXACTLY. (Will need help of cleaners to photograph the real one before drawing night to see position of the balls)
Then do a few spins

As long as you have at least 2 Nobel prize winners, I will invest

 

[Trembling Hand]

Concerning #5, I don't think it's beyond a small start up operation. In fact, I think it makes it all the more important. The largest risk for this type of operation is transparency. Without good governance, you're just not going to get the level of transparency investors of any meaningful size will require as a condition precedent to investment. No matter how good the theoretical returns.

Yes the more I look into this the easier it would be to just nail everything right from the start and be done with it.

So do you think you can produce returns with these costs loaded into the business and still make a decent cut for yourself (administration, IT, independant gov)?

I was waiting for such a question. And this is one that comes up all the time. How much can a daytrader make? You know the type of thread,

newbie starts,"I have a cfd account which is up 300% since the beginning of the year, I'm thinking of pulling Z amount out of the house and quiting my day job"

Well dreamers here is the answer, I have now about 8 years of sitting in front of the screens trading, admittedly the first few years data ain't that good. From that period I've seen pretty much every type of market. From a steady bull market of 03-07 into last years increasing volatility bear, then again the changing nature this year of locked up bot trading. No doubt whatever is ahead will be something diff. But,

I would stake my first born on the figure of unlevered 20% per year after brokerage return not being a to high a water mark. With the odd outliner period greatly higher than that. For example every $100,000 traded (1 SPI contract) an annual gain after brokerage of $20,000. Add in some sensible leverage and decent risk management, returns against drawdown are very attractive.

Not accounting for the obvious problem of scalability that day trading has (but I have a plan there ).

 

[doctorj]

I was waiting for such a question. And this is one that comes up all the time. How much can a daytrader make? You know the type of thread,

I think you missed the purpose of the question. It's not about how much a day trader can make, but whether or not you've thought how much these things are likely to cost you and therefore how big the fund will need to be to bare these expenses and still make the minimum returns and have some left for you.

E.g. If we assume you can develop a low-drawdown strategy that makes 30% after trading costs and you have a conservative $200,000 of annual costs (audit, admin, IT, trustee fees, governance), the fund will need to be at least $3mm to be worth you doing all this.

 

[Trembling Hand]

I think you missed the purpose of the question. It's not about how much a day trader can make, but whether or not you've thought how much these things are likely to cost you and therefore how big the fund will need to be to bare these expenses and still make the minimum returns and have some left for you.

Oh no I have thought of that for sure. Trouble is it starts as a guesstimate (where I am now) and is slowly getting to a more realistic estimate.

 

[doctorj]

This might be a stupid question, but why not make it easier for yourself as guaranteed risk-free plus 10%, then 70% of everything to up to risk-free plus 25%, with you keeping the rest?

 

[Naked shorts]

newbie starts,"I have a cfd account which is up 300% since the beginning of the year, I'm thinking of pulling Z amount out of the house and quiting my day job"

And how does this differ from what you did? (replace house with business)

 

[Trembling Hand]

This might be a stupid question, but why not make it easier for yourself as guaranteed risk-free plus 10%, then 70% of everything to up to risk-free plus 25%, with you keeping the rest?

actually I've been working on something like that but a suggestion came up in another thread and it seemed to make sense at the time.

 

[Trembling Hand]

And how does this differ from what you did? (replace house with business)

Because I wasn't a wage slave earning $500 per week without savings or cash and hoping to replace that small earnings in trading profit.
Because 300 % return is due to STUPID leverage not risk adjusted return,
Because 300 % return in a year tells me that you have no idea about position sizing and 1 month away from a blow up.
Because I had traded longer than 8 months
Because I could buy another biz at anytime if i failed.

Because I ..............................could go on and on.

 

[kincella]

you all should know by now...if it sounds too good to be true...then run as fast as you can...
another investment fund crashes, it was offering 35% returns....it seems it was just another ponzi scheme.... some people lost 3 million each...it must have been a beauty of a scheme.... but only 60 million lost

EXCLUSIVE: MORE than $60 million in investors' money is feared lost following the collapse of an investment scheme operated by a South Australian finance company.

Police and the Australian Securities and Investment Commission are poised to launch investigations into the activities of the Norwood-based ALC Group Pty Ltd, operated by well-known businessman Michael Samra.

Sources have told the Sunday Mail a large number of those caught in the scheme were "mum and dad" investors - some of whom had lost amounts of up to $3 million each.

Many other investors were cashed-up business people from Adelaide and Sydney, who were receiving returns on their investment of up to 35 per cent a month. One such group had invested almost $15 million.


http://www.news.com.au/adelaidenow/story/0,22606,25903795-5006301,00.html

 

[tech/a]

I thought T/H lived in Melbourne???

 

[Timmy]

you all should know by now...if it sounds too good to be true...then run as fast as you can...

TH's idea is to return 20% pa to investors.
Kincella, you have told us on numerous posts in this thread (and others) that you make 20% pa odd yourself.
So how is TH's idea 'too good to be true' please?

 

[jono1887]

Ok I'll start the ball rolling.

The aim is to try to predict which lotto number will come up.

Don't laugh. There is method to the madness.
Instead of looking at numbers, we will look at physics. With today's computing power, I believe a complex model of a lotto machine can be constructed.
The spinning of the balls in the machine is not random. But so complex as to appear random.
Purchasing the blueprints for the lotto machine from whatever company that makes it, and creating a computer model simulating the spins, durations, position of balls, thing that comes up with a ball (wth is that called), size and weight of balls, elasticity, etc.

Might take a few PHDs a month. Or maybe a year. The beauty is time is on your side. Moore's law means your computer power will increase, and what better time to hire maths PHDs fallen from grace than now! So recently after being booted from their lofty qant desks after 25 sigma events.

...

Failing that, we'll just buy a goddam machine and position the balls EXACTLY. (Will need help of cleaners to photograph the real one before drawing night to see position of the balls)
Then do a few spins

makes sense, but I see several flaws with this.

1) The balls will have to be positioned in the same order in the chamber before they are released - even though you have planned for the cleaner to take photos, I doubt they are loaded until just before the event. And say you were able to get the order of the balls.... you would need to get each ball pointing/positioned/angled in the exact way (because the ink of the numbers means that the weight of the ball is not perfectly centered)

2) I would also assume that the air stream that mixes the ball would also not be a steady stream that you could generate. I would think that it is run by a randomising algorithm similar to that found in a card shuffling machine. I doubt that the blueprints would reveal this 'algorithm'

3) Air pressure, temperature and humidity would also vary on night to night which should also affect the balls - you really countn't determine this as even if you had sensors in the room at the time, it would be too late to put in your ticket.

- although I agree that it is clearly not random, there are quite simply to many variables that you are not able to control and determine to accurately predict.

 

[kincella]

i believe some investors can generate 20% returns year in year out, with the odd bonanza of a monster return...using the 3 main asset classes and leverage
but I doubt anyone, or a fund can generate returns much above 15-20 consistently over a number of years...on the stockmarket alone.....

all I am saying is with Madden, storm and other investments that went sour, it was the lure of a performance far higher than the norm, that sucked them in, then they lose it all....
the other thing to be wary of ....if it relies on just one person to perform these miracles...what happens if that person is removed for what ever reason...say sickness...the thing can fall over

but take no notice of me....I am about 80% conservative anyway, and look for a method that produces less risk and higher income as the years go by, and I prefer to manage as much as I can myself, rather than be reliant on external managers, and that includes the stocks.....

for eg; I dont like the idea of a former 'car' man now chairman of BHP, as far as I am concerned he knows nothing about a mining company....its a lot different to mining the govt for assistance for the car industry....