Tuesday, August 25, 2015

The Compound 10% Rule

Earlier today, I heckled the 10% rule. Based on the market activity in the last hour of trading, I've had a change of heart. I am here to embrace it!

The Compound 10% Rule

1. Pick an "interesting" stock.
2. Buy it.
3. When you've lost 10%, sell it.
4. Repeat.

It's just like compound interest on savings! I totally get it now! Well, sort of, assuming interest rates are negative ten percent. Let it grow they said. Can't lose they said. It's a sure thing they said.

This is not investment advice. It isn't even gambling advice. If I truly knew where prices were headed then I'd be gambling too, either by being short or being long.

Anyone who has been actively trading stocks in the past week based on the market's gyrations, who doesn't also think they are gambling, should look in a mirror. Congratulations. You've more than likely found a greater fool.

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