Quote:
Originally Posted by FMCoug
Which should I regret more?
The GOOG calls I'm in and up 280% or the QQQQ credit spread I'm in that was a 55/45 risk/reward (i.e. for every $55 I put at risk, I get $45)?
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Imagine a scenario where you took 1 million monkeys and asked them to throw a dart at the stocks listed in the Wall Street Journal. At the end of the process, some darts would have hit good stocks, and some bad. Repeat that process 50 times. At the end you would have some monkeys who hit good stocks 50 times (the smart monkeys) and some who hit bad stocks all 50 times (the dumb monkeys).
I think this is pretty close to how it works for publicly traded securities (unless you have insider information, which would be illegal to use, or if you have so much cache in the market that the market tends to follow what you do, thereby ratifying every decision you make, like Buffet).
10-25-2007, 06:45 PM
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