With oil still elevated I’d wait until this dip really bottoms out. $6000 isn’t insanely unrealistic to see before it starts to climb again. More on my page about this.
A return only view of a strategy is the worst thing you can advocate. People should run from people who do that, but greed and fomo is what you are probably trying to invoke. Just shameful. Put the CALMAR ratios against those returns and discuss that in equal measure.
There’s a certain comfort in these kinds of studies. Three characters, three paths, a clean ending where the bold man wins and the cautious one fades into regret. It reads almost like a fable the market tells itself to keep people stepping forward.
But the real market doesn’t move like a backtest. It moves like a storm that changes direction while you’re still deciding whether to leave the house. The idea of “doubling down” sounds heroic when laid out over twenty-five years of tidy data. In real time, it feels like standing in the rain with no visibility, adding risk while headlines grow darker and price keeps slipping.
What they’re capturing is something true, but incomplete. The market does reward those who buy into fear. It has to. That’s where liquidity is needed most. But what they leave out is that not every storm passes quickly, and not every dip is a gift wrapped in disguise. Sometimes it’s a trap door. Sometimes the floor keeps falling.
The more interesting question isn’t whether buying the dip works over decades. It does. The question is who survives long enough to benefit from that truth. Because the market doesn’t pay out in smooth lines, it pays out in bursts
Although it doesn't invalidate the point, the comparison among the 3 investors is tilted towards Dave. As he doubles down on the dips he ended up putting more money out of his pocket in the portfolio. With more money invested it is expected that he would end up with a larger amount.
Maybe a fairer comparison would be to calculate the higher overall return in %.
With oil still elevated I’d wait until this dip really bottoms out. $6000 isn’t insanely unrealistic to see before it starts to climb again. More on my page about this.
Fair point.
But it next to impossible to time the bottom. That's why rules like 10% down, 20% down is a pretty good benchmark.
A return only view of a strategy is the worst thing you can advocate. People should run from people who do that, but greed and fomo is what you are probably trying to invoke. Just shameful. Put the CALMAR ratios against those returns and discuss that in equal measure.
Really well timed!
Common knowledge. Nothing useful here.
There’s a certain comfort in these kinds of studies. Three characters, three paths, a clean ending where the bold man wins and the cautious one fades into regret. It reads almost like a fable the market tells itself to keep people stepping forward.
But the real market doesn’t move like a backtest. It moves like a storm that changes direction while you’re still deciding whether to leave the house. The idea of “doubling down” sounds heroic when laid out over twenty-five years of tidy data. In real time, it feels like standing in the rain with no visibility, adding risk while headlines grow darker and price keeps slipping.
What they’re capturing is something true, but incomplete. The market does reward those who buy into fear. It has to. That’s where liquidity is needed most. But what they leave out is that not every storm passes quickly, and not every dip is a gift wrapped in disguise. Sometimes it’s a trap door. Sometimes the floor keeps falling.
The more interesting question isn’t whether buying the dip works over decades. It does. The question is who survives long enough to benefit from that truth. Because the market doesn’t pay out in smooth lines, it pays out in bursts
Although it doesn't invalidate the point, the comparison among the 3 investors is tilted towards Dave. As he doubles down on the dips he ended up putting more money out of his pocket in the portfolio. With more money invested it is expected that he would end up with a larger amount.
Maybe a fairer comparison would be to calculate the higher overall return in %.
The return is in % only and not raw portfolio value.
The chart's Y axis is in dollar values. That is what tricked me.
Ahh my bad. Thanks for the catch