A very interesting topic and a great writeup on well formulated thoughts.
I or rather a part of me when the year started wanted to take a similar path, towards names I could hopefully hold for a very long time.
Turned out quite a bit the other way. I discovered a bunch of trades with an edge (or so I (want to) believe) and realized a truth for me: if I had enough of these trading opportunities I would do it all the time around the year. Because thousands of trades that work on average minimize the chance for luck.
Generally agree with your point -- question more of economics of trades. If transaction costs are 0.05% of order placement then can add meaningfully and your gross returns before commissions need to be a good bit higher in absolute $. Again, more than one way to get to heaven!
Also super important to do what is right for your personality and emotional bandwidth. Just not a fan of trading, much easier to have conviction in value and ignore / exploit market volatility.
That being said I think trading is very good for keeping tabs on macro and sentiment + geopolitics which I think everyone should do regardless of whether they trade or not. And taking a cash / short position on the basis of valuations / macro / geopolitics is also probably the right thing to do in certain cases. Can't ignore macro. You can't model it imo but you 100% need to keep track of stuff. Otherwise operating blind imo
Thank you! Need to have the stomach to underperform too, and I've come to realize that if I have conviction in businesses then not hard to do. But also need to be honest with yourself, not get thesis-drift, and do the right thing when the facts tell you you are wrong
Welcome, Ilya. We've been waiting for you. I knew you'd eventually get there after reading your WOSG paper. I have a truck lane that you may be interested in. Still doing diligence myself but it's taking me a while to wrap my head around it.
A very interesting topic and a great writeup on well formulated thoughts.
I or rather a part of me when the year started wanted to take a similar path, towards names I could hopefully hold for a very long time.
Turned out quite a bit the other way. I discovered a bunch of trades with an edge (or so I (want to) believe) and realized a truth for me: if I had enough of these trading opportunities I would do it all the time around the year. Because thousands of trades that work on average minimize the chance for luck.
Of course, it might all change next year!
Generally agree with your point -- question more of economics of trades. If transaction costs are 0.05% of order placement then can add meaningfully and your gross returns before commissions need to be a good bit higher in absolute $. Again, more than one way to get to heaven!
Also super important to do what is right for your personality and emotional bandwidth. Just not a fan of trading, much easier to have conviction in value and ignore / exploit market volatility.
That being said I think trading is very good for keeping tabs on macro and sentiment + geopolitics which I think everyone should do regardless of whether they trade or not. And taking a cash / short position on the basis of valuations / macro / geopolitics is also probably the right thing to do in certain cases. Can't ignore macro. You can't model it imo but you 100% need to keep track of stuff. Otherwise operating blind imo
great write-up. Could you share which are your favorite Greenblatt's video link? Thank you!
Excellent write up. Exatly what I'm aiming to do with my portfolio. Concentrated portfolio of only the very best potential returns
Thank you! Need to have the stomach to underperform too, and I've come to realize that if I have conviction in businesses then not hard to do. But also need to be honest with yourself, not get thesis-drift, and do the right thing when the facts tell you you are wrong
Welcome, Ilya. We've been waiting for you. I knew you'd eventually get there after reading your WOSG paper. I have a truck lane that you may be interested in. Still doing diligence myself but it's taking me a while to wrap my head around it.
Thanks RS! It's good to be back where I started. Would be keen to know what the names is! :)