Hey Retired Trader, You Could Write This – On Traders and Trading
Just a short post to share my favourite weekend read.
Pinocchio Investors: How Investors Lie to Themselves
Washington Post, 24th Feb 2013.
“……a small segment of active traders who misread what the discussion is about, seeing it as an invitation to brag about their best trades. Astonishingly, these e-mailers have all significantly outperformed the markets over the years, putting up fantastic return numbers. They never seem to have a losing trade. They sold Apple at exactly $705 and bought gold precisely at the bottom. Even more amazingly, they got out at the market top in October 2007 and bought in at the exact lows in March 2009.”
Haha. No wonder I did not get that Goldman or MS job ! Straight to their face, “No, I cannot make USD 40 million a year on whatever PV you give me, just trading the SGD.”
Time for me to eat humble pie. Last week, EURJPY made small; died on XAU/EUR (medium term hold) and flat on the VIX.
8 Ways to Lie – How exactly do investors lie to themselves?
1. You know what your investment returns are
2. You can predict the future.
3. You know how costs, fees and taxes impact your returns.
4. You can pick fund managers.
5. You understand mean reversion.
6. You have a plan.
7. You can pick stocks.
8. You are saving enough for retirement.
I can’t believe only 1% of fund managers actually earn their fees !!
Incidentally, my 2nd favourite read last weekend was this one !!
Stress Ball Packer, Allegedly Punches Boss In The Face After He’s Laid Off
So much for stress balls !!