Get rich investing

This may sound like a naïve question. Has anyone made big money just by trading stocks, bonds, options, futures etc with their own money? I am not talking about starting with $1 million to invest in. Do you know of anyone with less than $50K to invest and they made it huge just by investing in the market. Do you know of any well known cases of this?

warren buffet [/thread]

tim sykes. google him

Ummm I dont think Buffet made it big by actively trading. Buffett made it big by buying and holding over a long period. Buying and holding is not what I am talking about. Can you become rich in less than 5 years trading with your own money?

Tim Sykes “Back in '99, the stock market was going pretty crazy. I was in High School,” recalls Sykes. “My parents gave me $13,000 of my Bat Mitzvah money that I put it into a discount online brokerage, and I was able to turn that $13,000 into a fully-audited pre-tax sum of $1.65 million. It all happened into my freshman year of college; I pretty much made $1 million in five months. I’m in my dorm room and I’m up $20,000 on the day. It almost wasn’t real. It was like a video game and I was going for the highest score.” Easy come easy go they say…

sykes makes more than all of us. made 50K last month and on tap to earn more than a dentist this year. he is on fire.

To turn 50K into 1mm in 3 years will require you to have an IRR of over 170% That kind of return is unrealistic. But to make a million over 15 years with 50K is more reasonable. You need a 22% return - certainly do-able Do I know anyone personally who has done that? NOPE

It’s going to take some serious luck as well. George Soros once said that if you could be correct 60% of the time in the market you’d be the world’s richest man. Someone could potentially take 10k and gamble on an extremely risky option play. Take Bear Stearns for example. You could have bought the front month $30 put options when it was trading on the edge @ $60 for .05 per contract. Excluding commissions on the option contracts you could have bought 2,000 put contracts enabling you the right to sell 200,000 thousand Bear Stearns shares when its stock dropped below $30. So when Bear Stearns opened ~$3 on that fateful day you would have made $27 on each optioned put share. 10k would have made you 5.4M in two days time. Sure it’s possible on one trade but they don’t happen often. There are probably not too many people who have just traded stocks and gotten a 100%+ return and sustained it year over year for 3 or more years. You can’t have a diversified portfolio that is going to have those kinds of returns. Sykes while he may be a smart guy will hopefully admit that he was also lucky as hell.

jim simons - undoubtably the world’s richest math PhD - pure quant trader. He owns about 50% of Rennaisance Tech - world’s biggest hedge fund - about $30b in asets They stopped taking in new money in about 1993 and paid out all outside investors in about 1998 - so it’s all his own money (the rest is owned by staff). Fascinating guy - math PhD (geometry) - then NSA code-cracker in the late 1960s - Harvard/MIT math Prof - made initial stake in a Colombian factory, then started first fund in late 1970s from memory. Trades everything in every market. His biggest secret to success is “I never hire MBAs” - hires only Math PhDs - all sorts of types - string theory, speech recognition algorithms, that sort of stuff. No MBAs or CFAs there - just pure math quants… btw - that’s not “ïnvesting” - it’s “trading” which is a very different thing - but the point is he makes bucket-loads of money which is the same end goal I guess…

null&nuller Wrote: ------------------------------------------------------- > > btw - that’s not “ïnvesting” - it’s “trading” > which is a very different thing - but the point is > he makes bucket-loads of money which is the same > end goal I guess… SOrry to be dull but whats the difference?

Shelby Cullom Davis

Also… If you ask any investor about how they REALLY made most of their money, if they are honest they will admit that most of the BIG money is made on a few outlier trades/positions. If you take these out, the performance is probably no better than the market index, or often worse. They will dress it up so it looks like some “system” or method, but it’s usually not, just a few random outliers. Eg. my best trade ever (personally) was/is: FMG (ASX) (Fortescue Metals Group - iron ore, Western Australia). In a pure punt fund I run (own money, no debt) I bought 100,000 @ 0.27 in Sep 2003. Split 10:1 in Dec 2007, so my cost is 2.7 cents ps. Peaked at $12 early 2008 (post split), now about $8 a share. Cost = $27k, value = $8m, term = 5 years, IRR = 200+% pa. No magic, just a pure punt (luck). The rest of the fund is up 30%+ pa, but that’s only because most were resources/miners - again pure luck - based on my view of the world back in 2003. That’s why I call it a punt fund - no science, just luck…

Wow, so you turned a true $27K investment (own money, not play money), into $8M? That’s pretty impressive!

real money - but it’s just a punt fund - don’t pretend to be scientific. My other funds are long term retirement fund (called “Self-Managed Superannuation Fund” in Australia) - long teerm growth for when/if I get old, income fund for living off, + some funds I run for friends + have a foundation as well. I have a few models which tell me the overall state of the market (cheap, expensive) then take sectoral view, then take punts and pick a few stocks when the time is right . Top-down I guess.

Excuse my ignorance, but what is a punt fund?

“punt” = pure guess, luck, as in a casino. “punter” = gambler. When you punt/gamble, only do it with money you can afford to lose because you probably will

Make flux capacitor, snag some Plut, punch it to 88

I have a pint fund, but it goes down every friday.

Null I’ve always enjoyed reading your personal investing views.

So null your net worth is around $8 mil and you hang around on the analystforum? Talk about dedication :wink: