Re: [CANSLIM] Reasonable Goal?

From: "Chris Jones" <SwingKid104@attbi.com>
Subject: Re: [CANSLIM] Reasonable Goal?
Date: Sat, 24 May 2003 20:06:17 -0700
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Hi Ian -

How does making 40% returns become more difficult as the size of your
account increases?  Assuming you're still sticking with the same types of
stocks, can't you expect the same types of returns?

Thanks

Chris

- ----- Original Message ----- 
From: "Ian" <ianstm@shaw.ca>
To: <canslim@lists.xmission.com>
Sent: Saturday, May 24, 2003 11:11 AM
Subject: Re: [CANSLIM] Reasonable Goal?


> Hi Tomas:
>
> I'll be the exception here and say that I believe that 40% a year is a
> reasonable goal (particularly up until you have about $600,000 - IMHO,
> outsized returns are a lot easier with smaller amounts of money) if you
are
> extremely disciplined about:
> * cutting losses very early
> * REALLY letting your winners run
> * committed to buying strong breakouts during confirmed rallies (You don't
> have to believe in a 'secular bull' to do this - but you do need to
> understand that most of these rallies are good for about 2 months and 30%
> runs in the indices).
>
> NONE of these 3 things are remotely easy. They all seem to fly in the face
> of basic human nature. But they are all absolutely essential to achieve
> outsized gains.
>
>
> My personal goals are to double every two years (about 42% per year), and
I
> have been achieving it. As an example, my virtual fund was started 2 years
> ago this weekend, and is up about 118% to date:
>
http://www.marketocracy.com/cgi-bin/WebObjects/Portfolio.woa/wa/FundPublicPa
> ge?source=DoPiAlBbDlAmIgAmMaKiAbBi (and this was during an ugly market,
and
> with an average of 30% cash, and no shorting allowed, and using strict SEC
> mutual fund asset allocation rules)
>
> As a Canadian, the hardest part about trying to compound the gains is
> taxes - I'm not sure how difficult that is in the US.
>
> Consider all the strong post-March 12 breakouts that are up 80-200%. If
you
> slowly went to fully invested as these breakouts happened, you would
easily
> be up 40% in the last 2 1/2 months.
>
> IMHO, with an unintentional focus on microcaps and nanocaps, I think that
> somewhere in the neighbourhood of $2,000,000 - $4,000,000 is where these
> kind of gains become more difficult. Therefore, for the professional money
> manager, who must look after 10's of millions just to earn a living from
> fees, it really is unreasonable to expect 40%+ annual gains. But for the
> individual investor with a much smaller amount of $$$, I believe their
> 'money making universe' is an order of magnitude larger in terms of
> available equities, so they have a reasonable chance at these kind of
gains.
>
> Consider SSYS and HITK, which have been 2 of the best stocks during the
last
> 2 months. Both of them were trading under 100,000 shares a day when the
> rally started (SSYS had a 13,000 share day in early march, with the
average
> probably under 50,000). As a professional manager with $100,000,000, you
> probably couldn't or wouldn't buy enough of either of these to make a huge
> impact on you fund. But as an individual, if you buy 6-10 positions for
> yourself, these two stocks alone could have netted you 20-30%.
>
>
> Cheers,
>
> Ian
>
>
> Marketocracy has 100+ funds that were up 30% in the last 30 days alone:
>
http://www.marketocracy.com/cgi-bin/WebObjects/Portfolio.woa/wa/RankingViewP
> age?date=20030516&subject=30Days%20Rankings%2081%20%2D%20100
> IMHO, that is only possible because of the small position sizes.
>
>
>
>
>
>
>
>
> ----- Original Message -----
> From: Tomas <tomas986@yahoo.com>
> To: canslim canslim <canslim@lists.xmission.com>
> Sent: Friday, May 23, 2003 12:57 PM
> Subject: [CANSLIM] Reasonable Goal?
>
>
> > This question is for the senior CS'ers.  If an
> > investor is 29 years old right now, and his goal is to
> > make $2M by 40 to retire, is this a reasonable goal?
> > The assumption is that he will start with $10K and add
> > between $5-$10K capital every year.
> >
> > I understand that there are many factors like
> > - how discipline you are
> > - how diligence you are
> > - how persistent you are
> > - how you learn from your mistake and
> >   do post analysis of your trades
> > - and even how lucky you are.
> >
> > But assumption that the investor is decently good on
> > those factors.  What is your opinion?
> >
> > Thanks,
> > tomas
> >
> >
> > __________________________________
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> >
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