Help Us Ben Bernanke, You're Our Only Hope
Blogger has been giving me fits all day long, so I apologize for this late post. I can't quite figure out how the discount rate effects EVERYTHING. Apparently it does.
The portfolio was up 3.03% today--not too impressive given the general market was up nearly as much. I'm hoping the euphoria lasts for the rest of the week. I'm up to my 30% goal for September. Yahoo!
Chris Perruna has an excellent article about using position sizing to manage risk on his website today. I've mentioned before that the whole risk management thing is new to me this year. It's all so simple and straight-forward, but it doesn't seem too many traders do it. It's one of the reasons new traders flame out so quickly. I think I just got lucky.
Check out Ugly's Bob Dillon's stock picks video. It made me laugh.
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5 comments:
Hey Scott!!!
Love that Dylan video! How the heck did they do that? I know ZERO of stocks but I am curious how did they do that overlayed stock labels. Or was that the original video? LOL..
Cheers!
gabi
It is pretty cool. It would take hours to create that on your own! You can create your own message and e-mail it here.
http://www.dylanmessaging.com/create.
AAII screens don't use stops and thus, don't use position sizing.
Risking 2% per position might be a good idea if you trade 20 positions, are leveraged, and are managing money for clients concerned about volatility. If you're not doing any of those things, 2% position sizing will guarantee under performance.
AAII screens are completely fundamental and "dumb". I think adding a money management dimension to them enhances their performance. It is rare that a stock in the screens loses 10 or 20% and then comes screaming back for a huge gain.
Money management does not enhance performance. It reduces volatility and absolute returns. Run a few Research Wizard backtests and then manually add money management.
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