"Trees don't grow to the sky" - page 47

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C-4: The diagnosis has been made. An MRI of the manager's brain revealed damage incompatible with trading.

))))

One of these peaks will cause a cabbage dump ))))

 
LeoV:
Look at the stats on pams - those who got from 100 to 200 far outnumber those who got from 3000 to 6000. ))) It's more psychology than mathematics. )))

Of course there are more of them because in order to get from 3000 to 6000 you first need to get from 100 to 200. Even if these probabilities are equal and let's assume they are 10%, only 10 out of 100 managers will reach 200% profitability and only one manager will reach 6000%. In other words, the actual observed picture is close to a dry probability estimate.
 

There are stats of a mega account with a 400x boost somewhere in the beginning :)

Raises of 100 times or more are rare amongst somehow public accounts.

 
C-4: Of course there are more of them, because in order to get from 3000 to 6000 you first need to get from 100 to 200. Even if these probabilities are equal and let's assume they are 10%, only 10 out of 100 managers will reach 200% yield and only one manager will reach 6000%. I.e. the actual observed situation is close to the dry probability estimate.


I agree, in this case those who will reach from 3000 to 6000 will be much fewer than those who will reach from 100 to 200 )))

So investing for 3000 is much riskier than investing for 100....)))

 
LeoV:

I agree, then those who get from 3000 to 6000 will be even less than those who get to 3000 ))))

Yes, the number will monotonically decline and quickly break down the boundary of statistical representativeness. As the result out of 1000 there are always 2 or 3 ultra profitable managers who are "inexplicably lucky" or who are "so professional that they do not fail for years". In reality we deal with a random number generator weighed heavily by MM system. Such a generator does not necessarily have to go down immediately and monotonically, because it is alone, and the laws of large numbers do not apply to it.
 
C-4: Yes, the number will monotonically decline and quickly break down the statistical representativeness boundary. As the result out of 1000 there will always be 2 or 3 managers who are super profitable and who are "inexplicably lucky" or who are "so professional that they have not lost money for years". In reality we deal with a random number generator weighed heavily by MM system. Such a generator does not necessarily have to go down immediately and monotonically, because it is alone, and the laws of large numbers do not apply to it.

So, then, we have found one of the rules of investing - you can't invest in pams that have already generated high returns?

Or rather in pummels, whose equity is of great importance?

 
LeoV:
Then it turns out that we have found one of the rules of investing - you can't invest in pams that have already received high returns?

It's more complicated than that, the pumas in which we can invest are always somehow stable over time and positive in returns, which means that their high returns are only a matter of time. Another thing is that the pumas managed unprofessionally and randomly often (also randomly) show high returns and stability over time. We must rather learn to determine if the current state of a PAMM is due to chance or due to high professionalism of the managers. Unfortunately equity alone is not enough for this, but you can also find out a lot from its dynamics.

 
LeoV:

So, then, we have found one of the rules of investing - you can't invest in pumas which have already generated high returns?

Or rather, in pumas whose equity has a high value?

You can't. And you can't go into a small one either.

 
paukas: You can't. And you can't go into a small one either.
Might as well live badly - they die from it ))))
 
It's come to this.
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