GOTTA “BORN TO LOSE” TATTOO?
It's all about the losses. I know, I'm not telling you anything new. Everybody realizes that the financial markets are all about controlling your losses, yet 90% of people who do this lose money. It's one thing to know and another to be able to implement what you know.
Just as with anything else in the financial markets, there are a million different ways to control your risk. And just as with all other things in the financial markets, you must discover the method that best fits you and your psychology.
If, for example, you are a guy who never leaves more than a 10% tip and has a case of Two Buck Chuck in your garage, then a strategy involving close stops that makes your broker rich is probably not the best strategy for you. As with anything, it's important to find what you are comfortable with...not what some guy you read about in a book has done to accumulate his fortune.
The better your research and entries into trades, the more high probability those trades should be. There are so many out there who enjoy the rush of being in a trade so damn much that they don't care about the probability of success. If they are out of the game, they feel as if they are missing the train. Truth of the matter is that being in the game constantly with new trades and ideas only further prolongs your misery, as your batting average for successful trades will consistently decline as your frequency of trading grows.
Our philosophy...why bother? We only take on a handful of well-researched investments each year. You know what that means? It means that over the past year, we've only been forced to take losses on two of our investments. We took a .03 cent loss on a .35 cent stock recently. Yep, we gave up .03 cents or about 10%. But guess what the result of our GSIG investment was, as just one example? A total gain, with all purchases taken into account of just over 200%, and we're still holding a small portion. Not a bad ratio of winner versus loser.
Here's our take on risk control:
1. Do your research
2. Be extremely selective about where you put your money
3. Don't jump around the financial markets like an addict looking for his next fix
4. When you find an investment that works, don't be afraid to allocate heavily into that investment. Diversification was invented by a duo named LarryDiversi and Johnny Fication, both of whom did terrible research and overtraded. It's unnecessary to follow their path if you do your homework.
That's it for now. If you're curious about what we have to offer, give Zenpenny a try.
