Monday, April 28, 2014

Rare event: public mea culpa from The Fly

It is a rare thing to see. The Fly, a popular stock market blogger, and money manager, admits to big losses and says he is out. (link1 and link2).

>> from Business Insider:
You can be sure there are many more folks out there in the market like him [the Fly], who have been clobbered in recent weeks. The vast majority of them won't be nearly as blunt.

>> from flyblog
My year to date losses were stopped out at about -32%, that’s another -13% for this week alone. Clearly, the beta was too high. It’s obvious that I should have sold long ago. Yes, I should have done a million things differently. I’ve managed around each and every market crises almost without flaw, until now. We all have our comeuppance, at some time or another. Today I got mines.

I repost the story about the Fly, because there are so few that honestly report their losses, and so many that lie about their winners. My Monday wasn't so good either, so perhaps misery loves company. I'll post my details in my weekly update. 

In one of my more popular posts, Two of the Hardest Things to learn (link3), this is one of them, coming to grips with losses, admitting you are wrong. I am no where near as aggressive (or successful) as the Fly. However, it is important to repeat the point that money management in terms of right sizing of positions, cutting losses, is at least as important as making market calls. 

Those that are always going all in, will almost certainly eventually lose enough times in a row to ruin their financial lives. Most will not be heard from. The losers tend to slink away quietly.

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