Stock Exchange: How Long Was Your Learning Curve?

Mar. 23, 2018 6:58 AM ETAMZN23 Comments
Jeff Miller profile picture
Jeff Miller
38.35K Followers

Summary

  • Traders cannot become experts overnight, and in many cases it never happens. It takes practice and time to build your assets.
  • Despite Thursday’s sell-off, our short-term technical health indicators for the market remain neutral, but we are watching closely.
  • Our regular participants offer specific trading ideas reflecting contrasting styles.

The Stock Exchange is all about trading. Each week we do the following:

  • Discuss an important issue for traders;
  • highlight several technical trading methods, including current ideas;
  • feature advice from top traders and writers; and,
  • provide a few (minority) reactions from fundamental analysts.

We also have some fun. We welcome comments, links, and ideas to help us improve this resource for traders. If you have some ideas, please join in!

Review:

Our previous Stock Exchange asked the question: Are You Trading The Energy Sell-Off? We considered the energy sector’s continued underperformance, and compared that to the ongoing strength of technology and momentum stocks in particular. The year-to-date divergence persisted through this Thursday's sell-off, and a glance at your news feed will show that the key points remain relevant.

This Week: How Long Was Your Learning Curve?

No matter how great your natural abilities, it takes a lot of practice to become good at something. For example, newbies can’t shoot par on their first ever round of golf, and traders cannot become consistently profitable without a lot of practice. And even after a lot of practice, it’s still not for everyone (this is why everyone that loves golf cannot be on the PGA tour). Similarly, according to world renowned trader, Charles E. Kirk:

Over 90% of investors/traders… would be better off adopting passive strategies such as "lazy portfolios", which are not actively managed and relieve the investor of almost all decision-making (thus the term "passive" rather than "active"). Says Kirk, "The only thing the 90% plus have to learn is passive portfolio management, i.e. how to match the market's overall performance."

And for more perspective, according to a study referenced in this article by Dr. Brett Steenbarger:

“Over 80% of traders were unprofitable in the study and, after expenses, only a small

This article was written by

Jeff Miller profile picture
38.35K Followers
Seeking Alpha mourns the passing of Jeff Miller, on May 7, 2021. During his time at Seeking Alpha, Jeff attracted a following of close to 40,000 readers and published more than 1,500 articles. He was a portfolio manager at Incline Investment Advisors, LLC. Jeff also was President of NewArc Investments, Inc., and served as a university professor.....................................................................................................................................Jeff is Portfolio Manager for Incline Investment Advisors, LLC.,manager of both individual and institutional investments. A registered investment advisor, he was formerly President of NewArc Investments, Inc. Jeff is a former college professor with a hands-on, real world attitude. His quantitative modeling helped inform state and local officials in Wisconsin for more than a decade. A Public Policy analyst, he taught advanced research methods at the University of Wisconsin, and analyzed many issues related to state tax policy. Jeff began in the financial business as Research Director for a trading firm at the Chicago Board Options Exchange. He investigated anomalies in the standard option pricing models, taught classes for beginning options traders, and developed new forecasting techniques. In 1991 he established a general research consultancy, working with professional traders at all of the Chicago financial exchanges. In 1998 he started NewArc Investments, Inc. Jeff has a commitment to the specific needs of individual investors. It is not a one-size-fits all approach, but one that emphasizes the unique circumstances of each client. Jeff also serves on the board of a small technology company. He occasionally serves as an expert witness in legal cases involving financial markets and hedging.

Disclosure: I am/we are long AMZN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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