Quote:
Originally Posted by Airelon
Was just talking to a few new traders some time ago, regarding money management principles. It's fascinating to watch new traders absolutely and positively reject anything having to do with money management principles. They nearly scream shreiking into the night, as if a cross, garlic and holy water was just thrown up in front of them. This was about 3 weeks ago. What do I know? I've only been trading for 12 years right? They've been in the markets a whole whopping 2 years.
One guys calls were on 100% this year - so his reasoning became "Well, I'll just hold onto my stocks (50% of his account equity), because I know they'll turn around". And of course, the market turned against him, and he just recently found out the markets rule: "The markets can remain irrational longer than you can remain solvent"
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It just shows that there's risk in stubborness. I got hit severely in JCP. Without that, I would have had a loss that was 72.9% less than I currently have. I liked it because it had better liquidity ratios than its competitors and had a better debt to equity ratio versus all of its competitors other than KSS. KSS had a better debt/equity ratio but not as solid, in my opinion, of a liquidity. In fact, the main problem with JCP in my eyes was its excess liquidity and very slow growth.