Comments on: StockTwits for Idiot Retail Investors: Week #5

By: firebones

firebones — Mon, 09 Feb 2009 04:12:34 +0000

Thanks for the info to follow up on. I've been checking out Brian's stuff, and had been meaning to check into yours.

By: steveplace

steveplace — Sun, 08 Feb 2009 21:05:41 +0000

If you need some more trade ideas I just put a video up:

http://investingwithoptions.com/2009/02/iwo-vid...

Also check out Brian Shannon's trade ideas at alphatrends.net

By: firebones

firebones — Sun, 08 Feb 2009 20:42:00 +0000

I came to the name “Idiot Retail Investor” after seeing some commenter on Kedrosky's blog use it in a self-deprecating manner. I think “Learning Retail Investor” is more accurate by now. Although “idiot retail investor” has some decent Google juice now.

The portion that I'm playing with here is significant enough to be interesting in my overall portfolio, but small enough that I can't do too much damage. I learn better with real money and real butterflies (game situations) than on paper, and this whole experiment is a test in seeing whether I can scale up.

By: Soren Macbeth

Soren Macbeth — Sun, 08 Feb 2009 20:25:13 +0000

“The one thing it helped me remember is that position size isn’t simple; separate positions may in fact be representing the same thing (e.g., my MA puts and FAZ positions are redundant to a certain degree; MA puts themselves relate to beliefs about consumer/retail, etc.) That kind of overall view of relationships between positions gets lost when you are listening to the StockTwits stream and evaluating opportunities. If you’re not careful, you can end up with a collection of positions that all fall together, or a single “theory” that ends up with a too large bet size on it. I’ve been lucky so far, but I need to add this basic macro overview to my evaluation criteria.”

Extraordinarily well put. In fact, after writing that paragraph, I would say it's not accurate to continue to call yourself an “idiot retail investor” any longer. Position sizing should ALWAYS ALWAYS be evaluated in the context of your complete portfolio. This is often lost even on professional money managers.

The clipped paragraph is indeed a nice “rule of thumb” approach to position sizing. Please keep up the fantastic posts.