The Big Boys, page-290

Hi gj,
Re:
-heraclitus: said “Lastly, the CGT implication is worth repeating. It would be ludicrous to sell, for example, what was an initial $100k investment that has become a $1M portfolio sijce (sic) the GFC,” mmmmm if you are getting anything like that return I will hand you over some $$$$ to manage!

Nobody would be getting a 10-fold return like that, repeatedly, but i know a number of people that have returns at or above 10x since the GFC. It's all about the cycle we've been in obviously. Also, the GFC low was 7.5 years ago now, so the annualised return after accounting for dividends isn't as mind blowing as it sounds, although it is very good.

But even without those returns - even with 5x returns - i don't know anyone in the world i'd back in to trade in and out of the market to try and surpass those returns, rather than just holding good companies.

The problem I have (and sure, in various endevours it sometimes works against me) is that I'm highly practical and scientific when it comes to making money. I believe what i can see, touch, hear, taste etc. Now I would have expected that in 15 years of being around markets, working as an an advisor, working as a commodity trader, i would have seen a number of examples of successful traders, making a good living from it. In fact, i haven't seen a single sole making a living and certainly not getting really wealthy, from charting. They may exist but to me they're like Jesus and the Lachness monster; I hear they exist in the Optionetics and other investor magazine marketing spin but i've never actually seen it to believe it.

Now it may be that i just happen to hang around in the wrong circles but my honest take on the matter is that there would be precious few people in Australia making the average Aussie wage of ~$80k from trading charts. Let alone a really good wage. Isn't it interesting though how many people new to the market (as evidenced by HC) gravitate to charts, when all the evidence suggests, pretty clearly, the quickest path to wealth is buying good companies and holding them. Heck! I've known oodles of clients who were generating that same $80k average Aussie income, simply from the dividends generated from their bank shares, CSL etc And they certainly weren't all big swinging dicks with lots of initial capital; most simply bought early and held firm.

But you know, this debate is like trying to convince the pimply kid at the gym that he should be focussing on heavy compound lifts like squats and deadlifts if he wants to get big - not wasting his time with the easier, more appealing, arm curls. Always takes a year or two of suboptimal results before you see them actully squatting and deadlifting, assuming they haven't given up by then.