Position management

[FirstConsul]

........

[Stocktrading101]

Well, we should go buy his product right now then since it is so amazing!

NOT

I didn't even take the time to scroll through the site, this guy is spewing "Imma foney" all over my computer screen.

[WallStGolfer31]

I've never been a fan of these self proclaimed wizards like O'neil and Van. The funny thing is that they advocate a set of rules, a set or principals, and/or a certian system as to what to look for. I've worked with (internships) and talk with many profesionals, they all just laugh at this stuff. Complex statagies such as arb, high yield, distressed, secondary issueance(sp?) call writing, many other option stratagies, and Index hedging are all such superior stratagies. Now a few of those are ones that would not be recomended for retail accounts, but you can still do quite a few of them in one way or another. My opinion is CANSLIM is for beginners, and shouldn't be relied upon too heavily. But that's just my opinion.

[WallStGolfer31]

Originally Posted by FirstConsul

Well. I don't have a very high opinion of mutual fund managers.
According to Larry Williams, during a time span of 1990-2002, almost no growth funds(out of 3000) were able to beat the DJIA.
I'm not saying that all of them are bad, but most of them produce poor mediocre results.
Motley fool notes that mutual fund managers typically return 9% per year.
Hedge fund industry returned like 5% last year(yeah it's blooming, double in assets under management in last 5 years to $1 trillion)
Actually, Van Tharp or O'Neil don't use those "complex" strategies.
Van Tharp uses expectancy, which is a mathematical formula to show how much you can expect to make with each $1 of risk.
He notes that there are like 6 factors in trading.
(1)Accuracy
(2)Profits of winning/losses of losing trades
(3)Capital Size
(4)Trading Frequency
and so on, I forget the other two darn.
CANSLIM is based on statistics of the best performing companies.
BTW, most professionals believe in crap called "Efficient Market Theory" and Random Walk Theory. Pretty much crap .
BTW, being more complex doesn't mean better.
Check out Long Term Capital Management. It was returning 40% per year, but when Russia defaulted on its soverign bonds in 1997 bam it collapses, lost a few billion $...
But then again, I don't know the guys you're talking to, they might be experts, but I'm talking generally.
BTW, this is not meant to be a inflammatory statement.. just my opinion vs yours with facts .

Yes, but hedge funds aren't suppose to corrolate to market returns, they are an investement vehicle meant to diversify the investors assets, not be them. Whole Vs. Whole may not look sop good, but let's just look at the best vs. best.

in 2004 the best mutual funds returned 43% to 68% ( http://mutualfunds.about.com/b/a/135862.htm )

in 2004 the best Hedge funds returned (this is from my last issue of barrons I could find for 2004) was about 120% to 366% (these were the 3 years, per annum returns, thats all I could recall.)



As a whole the why do retial investors (who for the most part, use these types of stratagies mentioned in the above posts) not make as much as the average professional?

[WallStGolfer31]

Originally Posted by FirstConsul

The best is not the average.
And you can't take a look at one year of records, that's useless. If a hedge fund bought oil futures this year, it'll be rich.
I bet XLE generated huge returns in the last few years. However, this means nothing...
If an entity made a bet on the EUR/USD on 2003 with 10:1 margin, it would've made 500% in 2 years(0.82 to 1.36, supposing he's perfect in entry and exit)
But you can't criticize a system because of the returns the users get. Each person's perception is different. You can lead a horse to water abut cannot make it drink.

I'm not saying your wrong, just backing up mine with a few facts too. I was just stating an out-preformance, is still an out-preformance.