The Lemon Fool

Surerera wrote:GS - If it makes you feel any better I've been actively trading both professionally and as a PI for about 40 years and I still make loads of mistakes, but as long as profits are bigger than losses I'll keep going.


Surerera

Worth pausing to ask 'what is a mistake?'

If hindsight is the yardstick then, yes, we all make mistakes in the sense that not all investment decisions will turn out to be profitable. But if the rationale for the decision is sound at the time then should it be viewed as a mistake?

For me mistakes are mostly about poor allocation of capital. It would not have been a mistake to invest in Carillion, it would have been a mistake to invest more than a small fraction of your wealth in Carillion (or any individual share regardless of its subsequent performance).

I'm not sure it's ever a mistake to not invest in something. Missing out on bitcoin is no different than missing out on the myriad other multi-baggers out there at any given time. Always balanced by missing out on equally large (or probably larger) number of failures.

It's a reasonable assumption, certainly based on history that, given sufficient time, profits will be bigger than losses if you obey the most important rule of investing - diversification. I would wager that no-one who has spread their wealth across, and within, the major asset classes over an investment lifetime would now be down, even in inflation-adjusted terms.

BoE

Bubblesofearth wrote:

Surerera wrote:GS - If it makes you feel any better I've been actively trading both professionally and as a PI for about 40 years and I still make loads of mistakes, but as long as profits are bigger than losses I'll keep going.


Surerera

Worth pausing to ask 'what is a mistake?'...

The narrative not having the legitimacy of the trade moving in the wrong direction (things don't happen just because one comes up with a neat theory).

JMN2 wrote:The narrative not having the legitimacy of the trade moving in the wrong direction (things don't happen just because one comes up with a neat theory).

I don't know what that means.

BoE

Bubblesofearth wrote:

Surerera wrote:GS - If it makes you feel any better I've been actively trading both professionally and as a PI for about 40 years and I still make loads of mistakes, but as long as profits are bigger than losses I'll keep going.


Surerera

Worth pausing to ask 'what is a mistake?'

BoE

Thx Surerera. Kind of the same here, been doing this almost 20 years, mistakes come with the territory -- I try to learn from them.

BoE, I think for me a mistake is being a forced buyer or seller. At the moment, I've not really lost much overall from recent market movements (a few % at most) but am experiencing cashflow issues, so I worry about the prospect of forced selling. One tries to avoid this by diversifying to an extent, but when the correlations go wonky, then even diversification becomes a double edged sword: you end up with twice as much exposure going against you!!

For interest:

Current relative allocation of this hedging book is roughly: 40 short SPX fut : 30 short 10y JGB : 2 pr. metals : 7 long FTSE ITM calls : 8 Med US Treasuries / UK gilts.

The portfolio hedged by the above consists of roughly 70 long UK and ex-US international shares : 60 cash & equiv : 10 short index ETFs

Basically a stock-picking portfolio heavily hedged, overall very defensive.


GS

Surerera wrote:GS - Yes I ssaw Mark Taber's post, disgusting as you say but not really a surprise. I've pretty much given up on the FCA for anything, it seems the PI's are there to be shafted and if you aren't prepared for that then don't get involved with markets, especially bond markets, it seems they don't really want us to hold bonds apparently we are much better off in high risk equities.

GoSeigen wrote:I'm sure someone here extracted/scraped all the TMF message archives. I wonder if they are easily accessible?

1. Gengulphus and others did a whole load of trawling of TMF posts and saved many threads and individual posts to the WayBack Machine. I am unsure how to most easily find them, but a starting point is to plug "Wayback" into the search function at top right of TLF plus any other search terms that are relevant. There may be other pathways to search WayBackMachine. Anyway thanks to those who did the TMF trawl and marked posts for archiving into WayBackMachine as it was not just Gengulphus.

2. Please could you give a link to Mark Taber's post re FCA that you noted. I know the website, but cannot find the post. I agree with the FCA etc sentiment btw, and much praise is due to Mark Taber for his many and various efforts.

regards, dspp

SEC Commissioner Jay Clayton speech on Monday at the Securities Regulation Institute (h.t. FTAlphaville):

https://www.sec.gov/news/speech/speech- ... 8#_ftnref1

I have instructed the SEC staff to be on high alert for approaches to ICOs that may be contrary to the spirit of our securities laws and the professional obligations of the U.S. securities bar.

I think everybody dabbling in this stuff should consider themselves on notice already.


GS

dspp wrote:
2. Please could you give a link to Mark Taber's post re FCA that you noted. I know the website, but cannot find the post. I agree with the FCA etc sentiment btw, and much praise is due to Mark Taber for his many and various efforts.

regards, dspp

It was very terse and passed almost without comment, so easily missed...

https://www.fixedincomeinvestments.co.u ... #post-1830


GS
Edit: Oh and I note it was not actually Mark who posted the update but another poster! Apologies...

GoSeigen wrote:

dspp wrote:
2. Please could you give a link to Mark Taber's post re FCA that you noted. I know the website, but cannot find the post. I agree with the FCA etc sentiment btw, and much praise is due to Mark Taber for his many and various efforts.

regards, dspp

It was very terse and passed almost without comment, so easily missed...

https://www.fixedincomeinvestments.co.u ... #post-1830


GS

Thank you. That led me to the CC response http://frccommissioner.org.uk/wp-conten ... -10-17.pdf which I read last night whilst trying to figure out what Mark might have posted. The CC response is, like the FCA, and Lloyds themselves, and SC, appalling. And I'm not even an ECN holder, just a bystander. I also no longer bank with Lloyds as I moved my account because of the ECN behaviour. As far as I can see private investors are being viewed as rick pickings with no protection whatsoever, not even the law, just their own wits.

regards, dspp

Bubblesofearth wrote:

JMN2 wrote:The narrative not having the legitimacy of the trade moving in the wrong direction (things don't happen just because one comes up with a neat theory).

I don't know what that means.

BoE

If you're long you may want to allow for some scenarios that might happen and cause a down trend. If you believe in say Musk and Tesla, you may want to allow some scenarios that make the whole electric car a non long term investment case. If you invest in bitcoin you may want to have some probability that makes the whole thing go tits up. Or vice versa, if you're of the opposite opinion, you may want to allow for some probability for these things to succeed. So if your're wrong and it went against you, it's not a mistake. You acted on the probabilities. To be fanatical about one's position and allow no space for adverse events is a mistake.

This is why I think GoSeigen is making a mistake. He seems too emotionally involved in his negative stance on cryptos and to my mind doesn't seem to allow enough probability for bitcoin/crypto/blockchain and is putting people "on notice" (which seems arrogant to me, I believe in caveat emptor).

JMN2 wrote:
This is why I think GoSeigen is making a mistake. He seems too emotionally involved in his negative stance on cryptos and to my mind doesn't seem to allow enough probability for bitcoin/crypto/blockchain and is putting people "on notice" (which seems arrogant to me, I believe in caveat emptor).

As a matter of fact, it was the SEC who put people on notice, not me. My post couldn't have been more explicit about that.

As for my emotional state, you are mistaken about that too: I'm far to unemotional considering what a useless, wasteful, exploitative, fraudulent POS I believe bitcoin and much of the crypto-coin space is. The problem is I have no vested position to defend (apart from a small charity bet) so it's hard to get too worked up.

As for blockchain I have NEVER publically expressed an opinion. I've no idea how you can judge my thoughts about it. However if it's fun for you go ahead and make up whatever you like!


GS

Come on GS, you feel threatened, admit it. You invested all this capital, financial and emotional, into something and now this new stuff is coming along and messing it all up. You spend a lot of time banging on about something you're not invested in and think is a non-starter. Would it hurt you to put in a bit of money and have a stake in it? Probably no. But you won't.

So it's a mistake in a sense I defined it earlier - you won't allow your narrative to have a legitimacy of "a downtrend".

JMN2 wrote:
If you invest in bitcoin you may want to have some probability that makes the whole thing go tits up. Or vice versa, if you're of the opposite opinion, you may want to allow for some probability for these things to succeed. So if your're wrong and it went against you, it's not a mistake. You acted on the probabilities. To be fanatical about one's position and allow no space for adverse events is a mistake.

Investing in bitcoin is not a mistake if;

1. You have a good investment case for it that Involves both understanding the investment and believing there is significant upside.

2. You only invest a small fraction of your total wealth in bitcoin.

The above two arguments hold for most single investments. The only exception is probably owning your own home which, in the UK at least, has many advantages, tax efficiency being the main financial one.

If you don't think bitcoin (or any other single investment) has a good investment case then I see no need to hedge that position. There are thousands of assets that, at any given time, you are unlikely to be exposed to - is there a need to cover such lack of positions for every one? Even assuming such a thing is possible. To reiterate, the main hedge for positions that you have actually taken is simply diversification - see rule 2 above.

JMN2 wrote:This is why I think GoSeigen is making a mistake. He seems too emotionally involved in his negative stance on cryptos and to my mind doesn't seem to allow enough probability for bitcoin/crypto/blockchain and is putting people "on notice" (which seems arrogant to me, I believe in caveat emptor).

To reiterate my comments above, I can't see how it can be a mistake not to invest in any single asset, or certainly not an investment mistake which is what this is about. Indeed, if you adopt that philosophy you will beat yourself up every time something comes to your attention that has risen and you have not had exposure to. That way lies madness!

Different to argue that someones opinion is wrong, we do that all the time and it's often healthy disagreement. But that's different to what IMO constitutes an investment mistake.

BoE

GoSeigen wrote:Some great entertainment on this discussion thread:

https://bitcointalk.org/index.php?topic=2484019.340

The linked thread has quietened somewhat, but I had a quick check-in this morning for my daily amusement and found this gem:

I will sell all Bitcoins when the Bitcoin price reaches $ 500,000 because this is the highest price that Bitcoin can achieve in the next 10 years. I think Bitcoin is still very cheap now and if you invest now, I am sure you will make a huge amount of money in the future.

With bitcoin currently trading at a very cheap $8,000, this investor will not be satisfied with anything less than a 50% compound gain, every year, for the next ten years!

I shoot for 3% net net net.

LOL I'm so stoopid.

GS

To repeat....

RececaDron wrote:Behold the drying up of "greater fools": all who could be hooked had been hooked.

Bottom line: under $100 within two years (likely sooner & likely lower).

February was a small positive for my crypto fund holding. Start of new tax year I will redeem roughly half of my holding which will be around £45k after fees with a cost basis of around £2k so not too shabby - it'll pay for my SIPP, ISA, perhaps a new kitchen. Similar amount will be left for tax year 2019/20, might be at zero by then or could be a gift that keeps on giving - comme ci comme ca, c'est la vie.

JMN2 wrote: £45k after fees

LOL. That's approx what I lost in Feb after my broker margin-called most of my hedges just before the crash. Have a drink on me.

GS

GoSeigen wrote:

JMN2 wrote: £45k after fees

LOL. That's approx what I lost in Feb after my broker margin-called most of my hedges just before the crash. Have a drink on me.

GS

I was told by a great investor once, a golf club on the trading floor swinging one, that it's all about percentage return, not the size of your book...

with this lottery ticket I've realised 1257 percent so far, the 45k mentioned would be on top of that, it'll hopefully keep the wolves at bay until I turn 55...

JMN2 wrote:February was a small positive for my crypto fund holding. Start of new tax year I will redeem roughly half of my holding

The way cryptos are dropping I'm not sure I'd want to wait till 6 April. I'd be selling now while the profit's still there,and take whatever tax hit followed.

Better to pay some tax on profits than not make a profit at all.

Clitheroekid wrote:

JMN2 wrote:February was a small positive for my crypto fund holding. Start of new tax year I will redeem roughly half of my holding

The way cryptos are dropping I'm not sure I'd want to wait till 6 April. I'd be selling now while the profit's still there,and take whatever tax hit followed.

Better to pay some tax on profits than not make a profit at all.

I see your point and have thought about this but want to live dangerously, after all I have only about £4k+ cost basis left over and decided to leave some units for either zero or another good annual salary. Is this like a long dated binary cheap option (decades since I studied Hull's( ?) option book)?

New tax year, share repurchase agreement form sent off to the tax haven, ka-chink! It all helps and hopefully some left over for the next tax year come rain or shine. When this horse has been flogged to death perhaps Brewdog will get listed and I will be able to ride that for a year or two. Lottery tickets - to spice up the boring dividend stream.