Saying that Roaring Kitty (Keith Gill) is an idiot would be like saying Druckenmiller doesn't know how to manage a fund.
Keiths content is gold, especially if someone wants to start learning how stocks behave in extremes and start getting a feeling for valuations, copying his style is a great way to do that. Running a long only value strategy with companies from 100 million to 1 billion market cap like Keith can lead to significantly outperforming the markets at many times.
Question. Would that not be a lot of cash sitting on the sideline not being put to work? 1m account, even with 10 active trades with 2% unit of risk per trade ($20,000) is $200,000. 25 basis point would be $25,000 willing to lose. What do you do with the other $800,000? Bonds? Dividend paying stocks?
2% is the amount you’d lose if the trade goes wrong. Not the notional amount for putting on the trade. For example if I want to buy SPY with a 5% stop then I’d be risking 2% or 25k from my entry to my stop. That means I need to buy a lot of SPY to simply have a 25k stop.
Great writing (lenghty so i didnt read everything to be honest) 😊
appreciate it
Great piece!
Saying that Roaring Kitty (Keith Gill) is an idiot would be like saying Druckenmiller doesn't know how to manage a fund.
Keiths content is gold, especially if someone wants to start learning how stocks behave in extremes and start getting a feeling for valuations, copying his style is a great way to do that. Running a long only value strategy with companies from 100 million to 1 billion market cap like Keith can lead to significantly outperforming the markets at many times.
Question. Would that not be a lot of cash sitting on the sideline not being put to work? 1m account, even with 10 active trades with 2% unit of risk per trade ($20,000) is $200,000. 25 basis point would be $25,000 willing to lose. What do you do with the other $800,000? Bonds? Dividend paying stocks?
2% is the amount you’d lose if the trade goes wrong. Not the notional amount for putting on the trade. For example if I want to buy SPY with a 5% stop then I’d be risking 2% or 25k from my entry to my stop. That means I need to buy a lot of SPY to simply have a 25k stop.
I see. Thank you.
Bureaucracy is the product of risk aversion.
This was incredibly great! Thank you for adding that PTJ excerpt. I will read that over many times.