Quote:
Originally Posted by GrobbGangsta
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I will break it down for you, Noah.
As a preface, I have no doubt that Herb/Oddjob is a smart guy and has realized some short term success with his day trading. The problem is he is making the same wrong mistakes/assumptions that all "retail" investors (day traders) make:
1. Because we have semi-efficient capital markets, the only people that can make money on the market over an extended period of time are institutional investors with inside information. Studying past models or forecasting future performance is essentially completely ineffective according to every person who knows anything about finance. OJ's "system" has a shelf life of months or maybe a year before it breaks down because he does not have access to any inside information. Semi-efficient capital markets work/are legal because some integration of inside information with institutional investments is still permitted by SEC regs.
2. When OJ's system breaks down (and it will), he will not have any exit opportunities. The only thing his skill set as a day trader translates to is being an institutional investor. PE funds and hedge funds are not going to hire some guy who has "failed day trader" on his resume. There is no pedigree. In addition, trading desks for big IBs will not hire someone with no institutional experience in their mid 30's.
If you are a smart guy with a penchant for finding arbitrage opportunities, you should start studying for the CFA/Series 7/etc. and apply for an analyst job before you inevitably fall off the day trade cliff.
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Those who can, do. Those who can't, coach.
While day trading may wash out some huge percentage of its participants, some people will continue to adapt their systems, continue to learn, and continue to make money.
You guys might as well be his wives, you show so much concern over his financial future.