|
PureBytes Links
Trading Reference Links
|
David,
I am not really sure (honestly) if you are arguing for or against my point, but either way, I think you highlight what I am trying to point out to a 'T'... Buffett is indisputably one of the most consistent, intelligent investors of our time (and the second richest man in the world) and he is averaging 24% per year. I am advocating aiming for 10-20% per year with low volatility. My systematic approach leads me to take this a step further... If I think I as smart as Jimmy, I mean Warren Buffett, (sorry--by 2 a.m. I am a little buzzed) then I should be targeting 24% per year... Below, I have calculated a small chart...
INVESTMENT SAVVY VS WARREN BUFFETT: .5 1 1.5 2
TARGETED RETURN: 12% 24% 36% 48%
In my daily trading, I am targeting 18% per year compounded... This (according to my chart) means I am (presumptuously) assuming I am .75% as smart or savvy or as good a trader/investor as Warren Buffett.
There is obviously a bit of sarcasm in this post, but it serves to highlight that if one wants to trade for a living, IMHO the high probability of success lies in pursuing a strategy targeting less than 50% per month returns. Buffett has become the second richest man on the planet with 24% annual returns. Second richest on the planet is not SO bad... ;)
Professional money managers (smart money hedge fund type guys) would kill for 20% returns every year. As a trader you have to play the high probability odds for making a career in the business. It is not easy. Make sure you are properly capitalized. Reduce volatility of returns.
Good luck trading,
Seth
|