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If you're able to tolerate an arbitrary amount of risk, you can potentially achieve absolutely absurd returns with very little skill. You just need to maximize
by Aunche 6y ago
If you're able to tolerate an arbitrary amount of risk, you can potentially achieve absolutely absurd returns with very little skill. You just need to maximize your portfolio's volatility. Find the most volatile stock you can with an upcoming earnings announcement or other catalyst and invest all your money into it. If you didn't lose all your money, sell everything and invest all your money in another volatile stock with an upcoming catalyst. Rinse and repeat. This is how people win stock competitions.
- froh 6y agoisn't this also how people loose stock competitions?
- Aunche 6y agoLosing doesn't cost anything because you aren't playing with real money. You get the same payout from -100% returns as you would with 20% returns.
- praptak 6y agoThe argument even applies to competitions where you play with your own real money. Any non-zero prize moves the slider a bit towards the riskier strategies.
- praptak 6y agoYeah, but it's kind of a Pascal's Wager: Normal investment: maximize expected profit Competition investment: maximize the probability of your profit being the best in the pool Normal strategy: 100% chance of losing the competition. Extremely risky strategy: 99.99% of losing - who cares by how much? There's this 0.01% of winning and it's all that matters.
- n4r9 6y agoIf you're able to tolerate an arbitrary amount of risk, just go to the casino and keep betting on red with doubling stakes, borrowing along the way if necessary, until you win the amount you want.