Re:Lessons from a 45-year Study of Super-Smart Children
by shostack on Wednesday September 07, 2016 @02:26PM
(#12445777)
I was with you until the individual stock purchase and leverage bit. For most people this is NOT a wise strategy as they have neither the investing experience nor savings to gamble like that.
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Re:Lessons from a 45-year Study of Super-Smart Children
by paulpauper on Wednesday September 07, 2016 @03:14PM
(#12446292)
The backtest of the strategy I developed risks $10k to make $100k since 2013. It attains maximum drawdown if all three stocks (AMZN FB GOOG ) fall 30% because 3-1 leverage is used. But since it's an option strategy, you don't risk more than the $10k invested. Yeah there is risk, but GOOG AMZN and FB have a combined market cap of about 1 trillion. It could be modified to be more diverse but returns are less. The sharpe ratio fr the strategy (which is a way of quantifying risk vs. returns) is 2 vs .80 for the S&P 500 in that period.
This strategy could be a good way for someone with a small amount of money to make quick returns and then later move to a more conservative strategy.