What would you need to quit your job and become a professional investor?

[Gringotts Bank]

Where's skc?

 

[peter2]

Ask him. He logs on occasionally since he returned from holidays

 

[Dcollins]

34...capital base of ~$1.5m.

Made my nw through combination of founding/building micro cap private/public companies and investments.

Some thoughts -

1. Never will you have more ability to take risk than your current lot in life. Young, single, low cash burn, etc. Take educated risks. Buy something in your portfolio that can make you 2,3,4...100x.

2. Keep the job and monthly burn low. Make enough cash monthly to cover your expenses. This reduces risk of finding yourself in negative situation. Better if jib teaches you something about investing. Promise you still have lots to learn. I do.

3. Leave some on the table. When you make a nice pass...leave a little. Meaning you got it right, great...but maybe you got it REALLY right. So....if you have $20k into a stock and it goes to your target of $30k, let $3k or $4k ride. I find its a little form of insurance policy against my own error (builds portfolio diversifcation as well)

4. Keep a stock pile of cash. Good markets never last. Meaning...sell early and sell often!!! You'll never buy at the bottom and sell at the top. Average in and average out does just fine.

5. Build your network. Some of your best investments will be generated from those that have more money and been doing it a lot long. Still do your homework on each idea you recieved.

That's all for now.

 

[helpme]

Interesting thread. Before making this major decision, the person should consider the impact to his family and how society will view him. We are all affected in some ways by how people around us view us, so that cannot be ignored.

If a person is still young in his late 30s or early 40s and quits his job to do full-time investing, society may frown on this person. Does this person have enough money to look after his dependents? It is irresponsible to have just enough to take care of himself only without sparing a thought for his family. Is he being selfish to quit his job and do whatever he wants, shirking his family responsibilities? What if he has a wife who desires to have kids but this person cannot afford to have kids because he has selfishly quit his job? Even if he is single, he still has parents to look after. Does he have enough money to take care of the parents if they fall seriously ill? Is he a weak person who cannot handle stress and hardship at work and using full-time investing as an excuse to escape from job stress? If this is the case, he will be a failure in whatever endeavour he undertakes if he cannot take stress and hardship. Why is he not contributing to the economy and society by holding a normal job or even setting up a business? What social use can arise from the electronic buying and selling of securities?

I hope I have not offended those who are contemplating becoming a full-time professional investor. I think these are unpleasant questions a person has to ask himself and be honest with himself on the answers before he makes a major career move that is going to impact the people around him.

 

[Dcollins]

Taxes on trading profits generate social benefit, and capital invested in companies creates growth and jobs. A few years ago a company I invested in and built in its early days now employees 60 people. I trade it's stock as a core position.

Ability to take risk is a function of age, committments, capital base and experience. Those should all measured.

 

[Smurf1976]

Does he have enough money to take care of the parents if they fall seriously ill?

In the Australian context the parents are mostly likely far wealthier, due to the housing boom, than their offspring.

Plus if they're working a normal job then no chance they'll be doing anything much to take care of parents anyway unless it's just a visit on the weekends or paying the bills. Work 9 to 5, plus commuting, plus time looking after their own house and children etc = that's the whole day gone for most at least from Monday to Friday.

Someone working for themselves, in any occupation, would be far better placed to look after someone else than someone working for an employer due to being able to set their own working hours.

Why is he not contributing to the economy and society by holding a normal job or even setting up a business? What social use can arise from the electronic buying and selling of securities?

Agreed there's no real social value in shuffling money around. Only exception would be if someone is trading a genuinely illiquid stock an thus providing a market for anyone else who wants to buy or sell but that won't be most small time traders.

At present though we have an unemployment rate persistently over 5% and what seems to be an even bigger problem with underemployment. Taking someone out of the workforce won't harm business in the slightest since there's plenty of other people who would gladly take the job. Only real exception would be those with specialised skills.

I think these are unpleasant questions a person has to ask himself and be honest with himself on the answers before he makes a major career move that is going to impact the people around him.

Agreed although that applies to any career change.

Eg a plumber becomes a manager of a plumbing business. No matter how good they are at actual plumbing work they could well fail as a manager. The safe option is thus to remain "on the tools" throughout their career but in practice plenty of tradesmen move onto other things at some point.

Same with a lot of jobs. Even things like Police, surely among the most stable of all jobs (no chance the employer's going out of business etc), you don't see too many in their 50's still on patrol. Some got a promotion within the Police certainly but plenty of others decide to give something completely different a go after a while.

In the past it was different but these days I'd say it's the majority of the workforce who will at some point make a major career change. Either "on the tools" work in whatever field to management of a related business or to something else entirely.

So I agree with your point but it's not limited to people becoming traders. A lot of people make a major career change at some point during their working lives and that applies in both directions (eg tradesman becomes a manager or a successful business owner decides they've had enough stress and that being a bus driver sounds like an easier way to fill their day - I know people who've done exactly that in both cases).

 

[luutzu]

Interesting thread. Before making this major decision, the person should consider the impact to his family and how society will view him. We are all affected in some ways by how people around us view us, so that cannot be ignored.

If a person is still young in his late 30s or early 40s and quits his job to do full-time investing, society may frown on this person. Does this person have enough money to look after his dependents? It is irresponsible to have just enough to take care of himself only without sparing a thought for his family. Is he being selfish to quit his job and do whatever he wants, shirking his family responsibilities? What if he has a wife who desires to have kids but this person cannot afford to have kids because he has selfishly quit his job? Even if he is single, he still has parents to look after. Does he have enough money to take care of the parents if they fall seriously ill? Is he a weak person who cannot handle stress and hardship at work and using full-time investing as an excuse to escape from job stress? If this is the case, he will be a failure in whatever endeavour he undertakes if he cannot take stress and hardship. Why is he not contributing to the economy and society by holding a normal job or even setting up a business? What social use can arise from the electronic buying and selling of securities?

I hope I have not offended those who are contemplating becoming a full-time professional investor. I think these are unpleasant questions a person has to ask himself and be honest with himself on the answers before he makes a major career move that is going to impact the people around him.

True. Society don't take kindly to people with a different idea of making a living.
But then those who have a different idea of making a living tend not to give a stuff about what others think. So they're even.

 

[Wysiwyg]

True. Society don't take kindly to people with a different idea of making a living.
But then those who have a different idea of making a living tend not to give a stuff about what others think. So they're even.

Right no one cares what others think in this self perpetuating, devour all comers industry. An industry rife with liars, cheats and thieves.

 

[luutzu]

Right no one cares what others think in this self perpetuating, devour all comers industry. An industry rife with liars, cheats and thieves.

Liars, cheats and thieves never really care for other people's opinions (or assets)... but they're in all industry though. But true, more of them are found in high finance where if you're in the right office building you can make shiet load of money doing practically nothing useful for anybody.

But I was referring to Helpme's point about investing full time versus getting a "proper job". How it is risky but also carry with it that social stigma of being irresponsible, not doing useful stuff, and gambling of sort.

I know people whose job and financial position mean they really shouldn't be buying a house at this point in the cycle. Yet they not only buy one, they bought 3 and thinking of buying a fourth. They're hardworking people who's thinking of saving something for themselves and their kids and all... so that's great and I don't mean to say that it's not. Just man, not sure those choices have been thought through properly.

But as far as society is concerned, doing what's normal - go to work for some, buy a few houses - is normal and responsible.

Whether striking out on your own, doing something that still provide for the family but a bit unusual.. what's responsible and what's not I guess the person have to answer that for themselves. That and whether their loved ones would put up with it or not.

 

[Value Collector]

Liars, cheats and thieves never really care for other people's opinions (or assets)... but they're in all industry though. But true, more of them are found in high finance where if you're in the right office building you can make shiet load of money doing practically nothing useful for anybody.

But I was referring to Helpme's point about investing full time versus getting a "proper job". How it is risky but also carry with it that social stigma of being irresponsible, not doing useful stuff, and gambling of sort.

I know people whose job and financial position mean they really shouldn't be buying a house at this point in the cycle. Yet they not only buy one, they bought 3 and thinking of buying a fourth. They're hardworking people who's thinking of saving something for themselves and their kids and all... so that's great and I don't mean to say that it's not. Just man, not sure those choices have been thought through properly.

But as far as society is concerned, doing what's normal - go to work for some, buy a few houses - is normal and responsible.

Whether striking out on your own, doing something that still provide for the family but a bit unusual.. what's responsible and what's not I guess the person have to answer that for themselves. That and whether their loved ones would put up with it or not.

I think being an investor is a great occupation, and is equally productive as labour.

If you face stigma, that is more of a reflection of that persons lack of understanding of the economy.

Take the invested capital out of the economy and we would have naked miners digging in the dirt with their bare hands, and that would be very productive.

If I buy that naked miner an air conditioned bulldozer and a uniform, which allows him to be productive and earn $100k why should there be stigma with be sharing in this extra productivity my bulldozer has created?

 

[Smurf1976]

I think being an investor is a great occupation, and is equally productive as labour.

Buying shares in xyz and holding them no matter what happens to the share price would fit in that category I agree.

Buying the same shares with the intention of selling them a week later is simply attempting to transfer wealth from one person to another however.

I'm not saying it's wrong, but I can't see how speculation creates any real wealth for society. Investment yes but not speculation.

 

[Wysiwyg]

I'm not saying it's wrong, but I can't see how speculation creates any real wealth for society. Investment yes but not speculation.

It creates employment for brokerage businesses, charting software companies, forums, execution platform providers, algorithm developers, data providers, FSP's etc, etc. etc. Taxes arer paid. Churn is essential for the financial markets.

 

[luutzu]

I think being an investor is a great occupation, and is equally productive as labour.

If you face stigma, that is more of a reflection of that persons lack of understanding of the economy.

Take the invested capital out of the economy and we would have naked miners digging in the dirt with their bare hands, and that would be very productive.

If I buy that naked miner an air conditioned bulldozer and a uniform, which allows him to be productive and earn $100k why should there be stigma with be sharing in this extra productivity my bulldozer has created?

Investor as a business owner, yes. Investor as a mere financial "investor", not really.

Capital is important to an enterprise. But there have to be a balance. Labour alone can't buy tools and investments etc.; capital buying tools and gears can't do much without labour to operate it either.

But the problem with capitalists and most investors, both big and small... is they don't much care for labour. They measure success based on the financials.

So if jobs are cut and more work are pushed onto the remaining labour force... that's called efficiency.

If shares are bought back, thereby increase the ROE and per share profit... executives get bonuses and tomorrows is somebody else's problem.

Looking at companies, we'd notice that those whose executives are spending money to actually invest in the business - new factory, new warehouse, new training programme for their workforce... The financial market doesn't react very kindly to such company's share price.

So unless the exec and board are real investor and actual business operator [as opposed to financial managers]... they'll just do share buybacks and other financial gimmicks.

Yes, in the long term investors and the market will reward those managers who invest in the actual business. Just that the long term mean some other a-holes who now sit on your CEO seat is taking the credit (and the bonuses).

But then again, that's what make those investors who study the company in some detail, approach it as they would a business... those, as Graham said, will do well over time.

 

[Value Collector]

Investor as a business owner, yes. Investor as a mere financial "investor", not really.

Capital is important to an enterprise. But there have to be a balance. Labour alone can't buy tools and investments etc.; capital buying tools and gears can't do much without labour to operate it either.

But the problem with capitalists and most investors, both big and small... is they don't much care for labour. They measure success based on the financials.

So if jobs are cut and more work are pushed onto the remaining labour force... that's called efficiency.

If shares are bought back, thereby increase the ROE and per share profit... executives get bonuses and tomorrows is somebody else's problem.

Looking at companies, we'd notice that those whose executives are spending money to actually invest in the business - new factory, new warehouse, new training programme for their workforce... The financial market doesn't react very kindly to such company's share price.

So unless the exec and board are real investor and actual business operator [as opposed to financial managers]... they'll just do share buybacks and other financial gimmicks.

Yes, in the long term investors and the market will reward those managers who invest in the actual business. Just that the long term mean some other a-holes who now sit on your CEO seat is taking the credit (and the bonuses).

But then again, that's what make those investors who study the company in some detail, approach it as they would a business... those, as Graham said, will do well over time.

There is no difference between 1 owner putting up $1million to finance a company, and 1000 share holders putting in $1000 each, either way $1million of capital is being invested.

If you took away all the equipment and infrastructure that’s been paid for by investors in fortescue, would they be able to produce 170million tonnes of iron ore a year? I don’t think so.

Both capital and labour are needed of course, but saying the people that provide the capital should be stigmatised doesn’t make any sense.

At the end of the day, if my capital investments provide me enough capital to eat, why should I be compelled to work a 9-5, I would just be taking a job away from someone else.

But who cares what others think, as I said it just shows their limited understanding of how things work.

 

[tech/a]

There is a huge difference
1 owner something will get done
1000 owners nothing will get done

 

[Bill M]

At the end of the day, if my capital investments provide me enough capital to eat, why should I be compelled to work a 9-5, I would just be taking a job away from someone else.

That's the best statement I've read all day, I'm in the same boat, cheers.

 

[Value Collector]

There is a huge difference
1 owner something will get done
1000 owners nothing will get done

I am talking about from a financing of the operation point of view.

Not about an owner who also contributes labour in running the place.

 

[luutzu]

There is no difference between 1 owner putting up $1million to finance a company, and 1000 share holders putting in $1000 each, either way $1million of capital is being invested.

If you took away all the equipment and infrastructure that’s been paid for by investors in fortescue, would they be able to produce 170million tonnes of iron ore a year? I don’t think so.

Both capital and labour are needed of course, but saying the people that provide the capital should be stigmatised doesn’t make any sense.

At the end of the day, if my capital investments provide me enough capital to eat, why should I be compelled to work a 9-5, I would just be taking a job away from someone else.

But who cares what others think, as I said it just shows their limited understanding of how things work.

Didn't I say the same things? With more words and less proper grammar? You red baiting me dude?

If your labour could earn you enough by working very little or not at all, then that is fine of course. No one would hold that against you or stigmatise you.

In fact, you'll probably get more money thrown at you and/or more people wanting to show you how to best use your money for other more worthwhile causes.

 

[skyQuake]

IPOs, pre-IPO rounds are essential to bridge the gap between 1 man startups and world conquering behemoths.
Well developed capital markets are an efficient resource allocating machine
There's a reason nearly all the largest companies in the world have spawned from US exchanges rather than say North Korean exchanges (if any)

 

[Value Collector]

Didn't I say the same things? With more words and less proper grammar? You red baiting me dude?

.

When you said this.

How it is risky but also carry with it that social stigma of being irresponsible, not doing useful stuff, and gambling of sort.

I thought you were saying that the stigma is justified.


and then when you said this.

Investor as a business owner, yes. Investor as a mere financial "investor", not really.

I thought you were saying capital owners that "owner operators" were productive, but "financial investors" such as share holders, bond holders etc were not really.

Maybe we are working of different definitions, What exactly did you mean by "Financial investors"?