Daily Speculations The Web Site of Victor Niederhoffer & Laurel Kenner Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter;  a forum for us to use our meager abilities to make the world of specinvestments a better place.

Home

Write to us at: (address is not clickable)

3/25/2004
Size Does Matter: Comment by Russ Sears

It seems logical given the events of the last few weeks where people playing with their own money (like me) get frightened out of the stock market at the worst place.

Herein also lies your advantage... The institutional and hedge funds may have more money, but they have to answer to others. IF you can live with several dismal quarters in a row of terrible return, and underperforming with only a gut check but fundamentally and long-term conviction of your strategy, you can (if you manage your position size well) have the "bigger" bankroll as "hot" fund money will leave.

Luck often runs in streaks well beyond what our nature permits us to expect.  The derivative expert in us all, rather than admitting our own cowardice, insist these naturally broken twigs are the trail of the "black swan" in a prudent noble hunt.

As Mr Zussman reminds us, your lactic acid threshold can be raised, and your willingness to endure pain can lift you to new heights. My Ethopia-like lean muscles mass and 3% body fat is proof that for the thin, this can increase your competitiveness -- at least in the endurance runs.  So size does matter, you just need to pick your sport wisely.

Swift, nimble and big: This is the combination needed in most of the "big time" sports.