Personal Investment Strategy

[galumay]

Re: Personal Investment Strategy Help

If anyone can suggest another forum member who has put more time and effort into attempting to help others, why don't they nominate that person?

I can think of half a dozen that half actually helped me greatly, not done what tech/a does which is to blindly promote HIS personal approach and imply that anyone who doesnt share his world view doesnt want to learn - thats not help.

The boasts about 'gambling' successes are irrelevant in a thread about long term investing and just make him look silly.

Its annoying that the discussion becomes so polarised and poisonous, but its not hard to see where and why that happened.

 

[tech/a]

Re: Personal Investment Strategy Help

Galumay

I'm curious.
What do you think I or anyone else for that matter
could pick up from your method
When I and anyone else for that matter can
make 3x your 6 monthly return in an hr?

I'm still interested in this reply.

I can think of half a dozen that half actually helped me greatly, not done what tech/a does which is to blindly promote HIS personal approach and imply that anyone who doesnt share his world view doesnt want to learn - thats not help.

I present and always have presented a technical alternative. My personal approach has been refined over 20 yrs. From Systems design and implementation to my current discretionary trading.

Techtrader was traded live on The Chartist website for 7 yrs. We turned 30K traded on margin and at that time it was 3:1 with BT into $378K when I shut down the system 6 mths before 2008.
That method was pulled apart by 100s of traders World Wide. It stood the test of time and when it traded outside of its blueprint--I shut it down. I actually know 3 people who are currently trading it and continued through the GST about 18 mths ago one of them contacted me to advise he was making new all time highs.

As an aside it was also published in Radges book Un Holy Grails where you'll find it in pages 103-109

Technical analysis is a passion for me one which I'm fortunate enough to share with a myriad of very talented "out of Mainstream" thinkers. Dr Bruce Vanstone and Dr Kris Rowland -- who happens to be related and on my payroll now (Kris) working on some really exciting innovative trade related projects.

So when ever you wish to discuss your passion in trading of course Ill have a look at it relative to my own---expect that. If you can add something to my own findings and those of the other enthusiasts I keep in contact with--I and they are all ears.
If you have anything published than please direct me to it.

But as has been shown before If you (Me or anyone else post up anything to do with experience and quantified success its EGO and ARROGANCE.

Generally from people with Ideas and Rhetoric in their resume'.

The boasts about 'gambling' successes are irrelevant in a thread about long term investing and just make him look silly.

I must be a particularly good gambler as I have posted many trades which have returned excellent profit.
And of course Techtraders returns.
Many that return B/E and I'm sure a few "Gamblers" would love to have broken even on some of their gambling exploits. I suppose PAV is also a really good gambler who now trades---errr gambles--- well enough to add an extra wage to his own working wage.
I present the result of the other night with my question---so you can see what it is I'm comparing it with. Of course it relevant!

My question still stands--I await your answer??

Its annoying that the discussion becomes so polarised and poisonous, but its not hard to see where and why that happened.

Its only you that makes it polarized.

If you can show me why I should invest $114K and get a $5K return in 9 mths including Dividends then I'm all ears. If its all you capable of then that's fine---I understand your frustration.

I strongly believe that I could increase your return 3-5 fold---but it is you who are so polarized in your ideology
that anything which doesn't fit in with your Mainstream thinking MUST be gambling.

Dr Bruce Vanstone Proved that its anything but (Technical Analysis does deliver an edge)
http://works.bepress.com/bruce_vanstone/. You might want to brush up on some light reading---and Id love to discuss anything of interest you find there. Kris would also love to be involved---

YOU May not be interested but from my private replies in my in box other are.
You'd be surprised the innovative Stock and trading related projects we are working on.

Stay tuned!

 

[galumay]

Re: Personal Investment Strategy Help

I'm still interested in this reply.

I am not so presumptous as to assume others would learn from me.

But as has been shown before If you (Me or anyone else post up anything to do with experience and quantified success its EGO and ARROGANCE.

Arrant nonsense, its not your posting of your trading examples that raise the allegations of arrogance and ego, its the arrogance and ego when you suggest that people who dont adopt your personal strategy and philosophy have closed minds and dont want to learn.

My question still stands--I await your answer??

I still dont see your question as having any relevance.

Its only you that makes it polarized.

what an odd conclusion!

If you can show me why I should invest $114K and get a $5K return in 9 mths including Dividends then I'm all ears.

*sigh* I am a long term investor, the only return I have is dividends, i havent realised any profits or losses at this time, performance comparisons over 9 months have to be taken in context when you are not trading. You know this very well and its really rather disingenuous of you.

If its all you capable of then that's fine---I understand your frustration.

...and you wonder why so many consider you arrogant!!

I strongly believe that I could increase your return 3-5 fold---

thanks for the kind offer, but no thanks.

but it is you who are so polarized in your ideology
that anything which doesn't fit in with your Mainstream thinking MUST be gambling.

strawman argument

You might want to brush up on some light reading---

..and you wonder why so many consider you arrogant

YOU May not be interested but from my private replies in my in box other are.
You'd be surprised the innovative Stock and trading related projects we are working on.

Stay tuned!

I can hardly wait!

 

[tech/a]

Re: Personal Investment Strategy Help

I am not so presumptous as to assume others would learn from me.

Rightly so in your case.

Arrant nonsense, its not your posting of your trading examples that raise the allegations of arrogance and ego, its the arrogance and ego when you suggest that people who dont adopt your personal strategy and philosophy have closed minds and dont want to learn.

If you can just point me to where Ive done this!

I still dont see your question as having any relevance.

From your response your correct
it doesn't as there is nothing more
you have to offer---so thanks for the reply.

what an odd conclusion!

What a defining reply.

*sigh* I am a long term investor, the only return I have is dividends, i havent realised any profits or losses at this time, performance comparisons over 9 months have to be taken in context when you are not trading. You know this very well and its really rather disingenuous of you.

*sigh* So you don't want help. A the title of the thread reads.
Just have Joe re name it to Personal Investment Strategy and all this annoying help will disappear.

...and you wonder why so many consider you arrogant!!

Currently we have 2 you and Mc Lovin.

But it really is OK if you don't have anything more to add---Just say so..

thanks for the kind offer, but no thanks

.

Fine I guess you don't really want help--you just want to demonstrate that which you understand.
That's fine too but the thread title is mis leading.

strawman argument

No I think its accurate. In particular where you cant see any other suggestion as being capable of improving your method.

..and you wonder why so many consider you arrogant

Its ok if its not your bag fine---calling someone arrogant for suggesting some reading--yeh its heavy but really interesting--is a feeble attempt at recourse.

Actually I don't wonder.

I know that its a last retort used by a few who have nothing more to add to the discussion.
When their ideas are found to be lacking that's when the Arrogant--Ego cards are played.
You've left out Condescending---a personal favourite.

I can hardly wait!

I see you also enjoy sarcasm---
Some common ground at last!

 

[Joe Blow]

Re: Personal Investment Strategy Help

Why does this have to happen time and time again?

If you find someone objectionable for some reason, as some clearly do, then just ignore them. There's even an ignore list you can use to filter out their posts. Simple.

What I personally find irritating - far more irritating than the posting style of any particular ASF member - is the way threads are taken off topic like this. What has been achieved by making personality and posting style an issue in this thread? Nothing, of course, other than taking it off topic.

If you find another ASF member irritating, tell your Mum, or your cat. I'm sure they'll care, or at least pretend to. But posting about it here serves absolutely no purpose whatsoever. This thread is evidence of what happens when people lack the self control to bite their tongue, take the high road, and move on.

If you have something of value to contribute, feel free to do so. Otherwise please have the courtesy to allow the discussion to continue unhindered by off topic remarks and personal slights.

Thank you!

 

[DeepState]

Re: Personal Investment Strategy Help

Technical analysis is a passion for me one which I'm fortunate enough to share with a myriad of very talented "out of Mainstream" thinkers. Dr Bruce Vanstone and Dr Kris Rowland -- who happens to be related and on my payroll now (Kris) working on some really exciting innovative trade related projects.

I have no dog in this exchange.

I am interested in the fields that Vanstone and, perhaps by association, Rowland are investigating in relation to investment at any time horizon. Vanstone's field is vastly different to just about anything else which has been posted on this site and sits within a wider class that is prospective and which is successfully used in very serious high end work. I imagine that any collaboration with Rowland would produce interesting work. Any chance of inviting them onto this forum (in another thread)? I would welcome the opportunity to learn more.

 

[galumay]

Re: Personal Investment Strategy Help

In reflecting on my portfolio structure the interesting thing for me is that of the 11 companies I have invested in, 8 of them have shown significant unrealised capital gains well in excess of the benchmark.

Just 3 of them have shown significant unrealised losses, and when I revisit my analysis of these 3 companies I am most comfortable with ITD, i expect the benefits of their growth strategy to start bearing fruit and I am confident that they will continue to provide a healthy yield in the mean time.

CDA was a mistake - with the benefit of hindsight - no one predicted the turnaround in earnings that CDA suffered with the collapse of their metal detector sales. But the saving grace is that they were in a good position to weather the storm, they have other profitable if smaller segments, low debt and management that have reacted quickly to gain control of the situation. It will take them a while to recover and for the results of rebuilding the business to flow through, and the dividends have and will suffer in the mean time. An increase in earnings back to about 9c per share would mean a price similar to my cost at a p/e of 14 which is not to difficult to imagine in the medium term.

NWH is obviously the worst performer of the portfolio, we all know the reasons mining services companies have had their share prices savaged, as I have expressed elsewhere, I hold a contrarian view about the extent of the impact in this sector going forward, nothing I am reading currently would support that view!! It probably comes down to a question of whether NWH can survive the cycle financially, and the concern with that is only the debt. When I first purchased NWH I failed to pay enough attention to the debt, particularly the interest coverage ratio - that was something I didnt even know about when I started and it was only ROE's help that expanded my understanding of the importance of considering this metric.

I expect the share price to drop further before it shows any sign of recovery, there is likely more bad news with the impairment that has been flagged and sentiment is so poor towards this sector that any negative news has a disproportionate effect.

I had a long hard think about averaging down into NWH, but I think the capital can be employed better elsewhere and the risk of them not surviving the cycle, while low, does exist.

I reckon MND would have been a better choice for my contrarian entry into this sector, and with what I have learnt from others about reading and analysing financial reports it would have been apparent to me. Either way its not going to be a quick turn around for the sector and it will require patience and nerves to ride it out.

 

[The Falcon]

Re: Personal Investment Strategy Help

Galumay, viz. NWH, I'm in a similar position with SVW, have averaged down to $6.33 but not willing to keep adding to the position, as it would break my self imposed exposure limit per position. I really moved to fast on this one, but I am comfortable with the business and happy to wait. There is a buy back in place which is chewing up the free float, and its trading well below NTA, so if I could reset that one I would

I am starting to look at ASX O&G stocks and US O&G but not rushing in to anything, I think prices will be depressed for a while. Most of my portfolio is Broad index ETFs (VAS/VHY/VTS), LICs and US float investors (BRKB/MKL/Y) but I like to take some individual positions when I have time.

 

[Julia]

Re: Personal Investment Strategy Help

galumay, the above represents a clear summary of your thinking. It's clear that it's not an approach that we all embrace, but we all make our own choices.

Reading through other threads this morning, I noticed this also of yours from a while ago:

Default Re: My Brush with Technical Analysis

I guess if you believe in TA then by default you have to believe that patterns will recur in the graphs you plot and that its possible to gain an edge by looking for events (volume, price changes etc), that have led to outcomes in the past and betting that its more likely than not that they wll happen again.

I suspect that having confidence in whatever strategy you use, and the discipline to stick to it, is more important than all the discussion about whether the strategy is 'correct' or not.

We know the % of successful traders is minute, I suspect the % of successful longer term investors is not too good either.

My believe is that its human psychology that gets in the way of the implementation of successful strategies - regardless of whether they are TA, FA, short term, trading, investing, buy & hold, whatever.

I know in my early days I researched all sorts of approaches, I could never get past the logical and mathematical issues I had with TA, so I knew it wasnt for me - because I would never have developed any confidence in a strategy based on it.

That doesnt mean its not a perfect approach for tech/a, pixel or anyone else. I still follow a lot of what the TA guys post because it helps me think about what i do and why I do it.

Again, a perfectly reasonable outline. I don't actually agree about the involvement of psychology to the extent you suggest in all approaches, but the idea is put forward reasonably and with thought.

As I've suggested before, most of us come to a forum like ASF to learn from one another, to check out our conclusions with others who might see a flaw in our strategy that we've missed. So it just seems to me a great shame that there always arises inflammatory exchanges which provoke further retaliation, and so the whole conflagration escalates.

It serves none of us usefully.

I'd just like to suggest that we all try a bit harder to be more careful about making remarks that we must know will be like a red rag to a bull to someone who thinks differently from us. We can all come up with examples but to list them here would not be helpful.

Now maybe we're not up for a group hug, but I hope we can agree - even if to prevent Joe from having to constantly intervene - to maybe just agree to disagree when necessary, and do it reasonably respectfully.

 

[galumay]

Re: Personal Investment Strategy Help

I'd just like to suggest that we all try a bit harder to be more careful about making remarks that we must know will be like a red rag to a bull to someone who thinks differently from us. We can all come up with examples but to list them here would not be helpful.

In my defence, go back to my post number 107 and look how carefully i worded my comments to tech/a regarding my perception of his comments. Then look at how it escalated from there, its a slippery slope!

 

[KnowThePast]

Re: Personal Investment Strategy Help

Dr Bruce Vanstone Proved that its anything but (Technical Analysis does deliver an edge)
http://works.bepress.com/bruce_vanstone/. You might want to brush up on some light reading---and Id love to discuss anything of interest you find there. Kris would also love to be involved---

Hi tech,

Thank you so much for this link. I've now read a few of his articles, not only was it an exceptionally interesting read, it was also very close to many experiments that I run with my own software. We've talked about Kris before, I'd love to have a "knowledge session" with him

To keep things somewhat relevant to this thread, Bruce does have a paper on stop losses, this is an abstract:

"A great many traders use stop-loss rules in their everyday trading. In addition, during periods of high volatility, many traders attempt to protect their downside by moving their stops closer to the price action. However, there appears to be little real justification for doing this. There is a shortage of evidence that demonstrates that stops are actually providing the benefits that traders believe they are. This paper is an empirical study of the use of stops within a defined trading strategy. The methodology used within this paper can easily be ported to any
individual traders’ strategy. In the specific case studied in this paper, the results suggest that initial stops degrade long-term portfolio performance."

And in conclusion:

"Many traders may feel uncomfortable with the idea of not using initial stops. However, from conducting this study on a variety of trading systems, one observation is crystal clear: If a trading strategy has a positive
expectation, then the use of initial stops will only serve to degrade performance."


Having personally played around with some backtests, I wouldn't go so far as to say they are always degrading, it very much depends on the system used. But I also found that most fundamental, value oriented strategies do not benefit from them.

P.S. Stop arguing you all, it's only a game

P.P.S To be read while looking at my new avatar for context.

 

[burglar]

Re: Personal Investment Strategy Help

... P.S. Stop arguing you all, it's only a game ...

It's only a game, ... but it's the stoopidest game in the world!

 

[tech/a]

Re: Personal Investment Strategy Help

"A great many traders use stop-loss rules in their everyday trading. In addition, during periods of high volatility, many traders attempt to protect their downside by moving their stops closer to the price action. However, there appears to be little real justification for doing this. There is a shortage of evidence that demonstrates that stops are actually providing the benefits that traders believe they are. This paper is an empirical study of the use of stops within a defined trading strategy. The methodology used within this paper can easily be ported to any
individual traders’ strategy. In the specific case studied in this paper, the results suggest that initial stops degrade long-term portfolio performance."

And in conclusion:

"Many traders may feel uncomfortable with the idea of not using initial stops. However, from conducting this study on a variety of trading systems, one observation is crystal clear: If a trading strategy has a positive
expectation, then the use of initial stops will only serve to degrade performance."

A vast and very important topic.
I think though the comments should be read in the context of the highlighted areas.

Stop arguing you all, it's only a game

A presentation of opposing views isn't arguing particularly if argument is placed up for discussion.
If its only a game to the O/P why title the thread

Personal Investment Strategy Help

 

[DeepState]

Re: Personal Investment Strategy Help

If a strategy has positive expectancy, stops and risk management will reduce expected returns. Stops are options of a type. Buying them comes at a price. You are paying this to the market. Their cost/value increases as your expectancy increases. In expectations terms, it's a given that stops etc will bring returns closer to zero/risk-free. What actually happens can vary from this.

Introducing risk management which reduces expected outcomes does not diminish their value if an investor/trader is affected by the pathway taken or does not regard any outcome as proportionately good or bad. That is, does not regard a loss of 50% to be equally bad in the sense that a profit of 50% feels as good. It is more vital under conditions of leverage where ruin could occur despite positive expectancy. Under these conditions (which are much more relevant than unconditional expectations as a basis for portfolio management), risk management adds value.

 

[So_Cynical]

Re: Personal Investment Strategy Help

In reflecting on my portfolio structure the interesting thing for me is that of the 11 companies I have invested in, 8 of them have shown significant unrealised capital gains well in excess of the benchmark.

Just 3 of them have shown significant unrealised losses.

galumay

While i could care less about "value" investing we do have some things in common.

• No Stops
• Patience
• Long Term Outlook

i have found that over the last 7 years, given a 12 month time frame i have consistently chosen 1 loser for every 4 winners, so your 8 winners and 3 losers from 11 stocks is about right...cant win em all hey.

 

[DeepState]

Re: Personal Investment Strategy Help

galumay

While i could care less about "value" investing we do have some things in common.

• No Stops
• Patience
• Long Term Outlook

i have found that over the last 7 years, given a 12 month time frame i have consistently chosen 1 loser for every 4 winners, so your 8 winners and 3 losers from 11 stocks is about right...cant win em all hey.

Given you apply a martingale strategy and don't care about 'value', how do you decide to close out a position at a loss rather than continue the progression of averaging down into losses?

 

[tech/a]

Re: Personal Investment Strategy Help

If a strategy has positive expectancy, stops and risk management will reduce expected returns. Stops are options of a type. Buying them comes at a price. You are paying this to the market. Their cost/value increases as your expectancy increases. In expectations terms, it's a given that stops etc will bring returns closer to zero/risk-free. What actually happens can vary from this.

Introducing risk management which reduces expected outcomes does not diminish their value if an investor/trader is affected by the pathway taken or does not regard any outcome as proportionately good or bad. That is, does not regard a loss of 50% to be equally bad in the sense that a profit of 50% feels as good. It is more vital under conditions of leverage where ruin could occur despite positive expectancy. Under these conditions (which are much more relevant than unconditional expectations as a basis for portfolio management), risk management adds value.

One area overlooked Is the removal of the initial stop loss and moving it to B/E as soon as practical.
I have found this in discretionary trading to boost my R/R dramatically. On a few stock trades Its also been much better. You cut the bleeding down by around 50%---but I would like to investigate more.

Haven't done formal testing as I'm trading futures. But is on the list.

 

[So_Cynical]

Re: Personal Investment Strategy Help

Given you apply a martingale strategy and don't care about 'value', how do you decide to close out a position at a loss rather than continue the progression of averaging down into losses?

While there are some martingale elements to my strategy i don't thinks its fair to describe it as martingale, i have a position size limit to my losers and in general limit my self to 2 average downs, each of about 30/40% of the original investment.

Lets not side track this thread though...i only posted my thoughts to support galumay's 3 losers from 11 result.

 

[DeepState]

Re: Personal Investment Strategy Help

One area overlooked Is the removal of the initial stop loss and moving it to B/E as soon as practical.
I have found this in discretionary trading to boost my R/R dramatically. On a few stock trades Its also been much better. You cut the bleeding down by around 50%---but I would like to investigate more.

Haven't done formal testing as I'm trading futures. But is on the list.

Take it off your list. Kris could do it for you with a binomial lattice in less than an hour or two with some knowledge on thermonuclear turbulence that he probably already has. It's a variation in options pricing. But, without wanting to trigger off an avalanche of stuff, it looks to me that a widely held belief amongst T/A practitioners is that stops do not come at a cost and may actually increase expected (positive) profit. I have seen examples of the rationale in very highly regarded educators quoted liberally in this forum. Kris can crush that if he wants as a byproduct. I'm going to avoid that third rail.

With positive expectancy unchanged, the move to tighten the stop to B/E once in profit vs leaving it will reduce expected return. It will skew the outcomes to be more positive (so you will notice higher average wins when a trade works), but will obviously hit the revised stop more frequently (but these don't seem painful at all). Hence, it will seem like a superior strategy on gut feel given how we generally notice things. It may even turn out that way for a given experience pathway. However, if long term return is what you want, and you are skilled, leaving the stop as it was will make you richer on average.

That all said, in real life, we get slogged by despair and give up with higher likelihood after a string of losses. This may include wiping out net capital if the face of leverage. Anyone with skill can encounter this. By limiting the likelihood of this occurring, we may actually end up richer in the end once we factor in probabilities of staying-in/exiting-from the game. This is the value of insurance. Bet with skill. Insure what you cannot hack. The rest is excess payment. For you, the right amount of insurance might be B/E. If it lifts your boat...and bank account...why not.

 

[tech/a]

Re: Personal Investment Strategy Help

Hmm must start or find the stops thread.