Sorry for misunderstanding.
I meant 90% as 9/10 trade has been all gains since 2006.
Don't give me too much credit for it during 2007-2009. I had to bag hold few stocks till it was on positive side.
edit to add:
Yeah, Beta is basically a "multiples" of risk volatility.
Depends on which school (Econ or Finance), they will approach you with capm systemetic risk, or basically a scaler multiple of risk respect to change in indices.
For an good example would be if "beta" is 2, and the stock is in S&P500. If S&P500 went up 5% in 1month, you should "expect" the stock to go up 10%. If it went up lower than 2% , it didn't do good.
If S&P500 went up 5% and if your stock went up 8%, you actually did not beat the market.
Here are basic models which some "finance for dummies" classes teaches.
http://quant.stackexchange.com/quest...-line-straight
http://www.fundmanagersoftware.com/h...lculation.html
http://www.fundmanagersoftware.com/h...lculation.html
http://www.finquiz.com/blog/2013/04/...h-derivatives/
http://www.columbia.edu/~ks20/FE-Not...Notes-CAPM.pdf
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In terms of trade, I did about 90% gain ratio.
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Originally Posted by jasonn
Thanks MrPrena for outlining your thoughts. Haha, I wasn't sure if you were serious about the 50% gain / McDonalds cheeseburger example until I read further and you mentioned getting a 90% gain. Wow, to be able to shrug off a 50% increase and make it look like a poor result is really something. For me, I'd be extremely pleased with a 10% gain in the stock market. Real estate wise, on my various holdings, I'm looking at between 8-25% annual return on my down payment after debt servicing, without considering the rise in property value. You are certainly in a completely different league. My best performer is half of what you consider to be a poor performance.
If I am distilling your post correctly, it is better to bet big on a few stocks that you are very confident in; once you know what you are doing of course and have thoroughly researched the companies.
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