My first Loss in 40 days

[forker]

also to the op, this reminds me of a clasic dilemma: Assuming both have the same expected value which strategy would you choose, the one with small frequent profits and big rare losses or the one with big rare profits and small frequent losses?

it depends on how big the rare big losses are in the first instance. because it could mean that one big loss wipes out months of gains.. i would be more interested in the second instance, there isnt that risk of the big loss .. there is also a middle ground by the way not just the 2 extremes you mentioned..

 

[montmorencyt2w]

Rajesh Gill, ‘7 to 7’ day trader, awarded £20m for City fraud - Times Online

Goodness, that's a pretty intriguing story, and one wonders really what the full truth behind it is. Perhaps the most amazing thing is that "Mr Blomford has since left MF Global" - amazing if that's the only consequence for him -- hasn't he had his collar felt by the Fraud Squad?

I take it that the money that Gill lost through Bomford was part of that £7M he had originally made. I wonder if he will ever get his £20M award. Can the firm involved afford to pay it? Can Bomford?

Still Gill should be able to turn his remaining £2.7M into a tidy sum, even without the award, provided he steers clear of more fraudsters.

 

[Niove]

actually I was not angling for anything.. I thought the answer to my pseudo dilemma would be obvious but it seems its not. So let me offer an example and see if you 'd give me the same answer you did before:

You have 360,000 euros as capital. In a fair game of roulette (one without a zero but only 18 reds and 18 blacks) you have the option to (a) place 10,000 of your capital as a bet on a number or (b) place 180,000 of your capital as a bet on a color (red or black) every spin. Getting the number right pays 36x while getting the color right pays 2x. Obviously both strategies have the same expected profit, but are both equally desirable?

 

[tomorton]

Hi Niove - Yes. That is, both are equally UN-desirable.

Success in trading = Capital x Time x Risk.
If anyone wants to win with very small Capital and in very little Time, they are going to have to take very high Risk. Only the lucky few have done that.

 

[timsk]

Can the firm involved afford to pay it?

If Man Financial can't afford to cough up a poxy £20mil, we are all completely boooogered!
:cheesy:

 

[bfirth]

actually I was not angling for anything.. I thought the answer to my pseudo dilemma would be obvious but it seems its not. So let me offer an example and see if you 'd give me the same answer you did before:

You have 360,000 euros as capital. In a fair game of roulette (one without a zero but only 18 reds and 18 blacks) you have the option to (a) place 10,000 of your capital as a bet on a number or (b) place 180,000 of your capital as a bet on a color (red or black) every spin. Getting the number right pays 36x while getting the color right pays 2x. Obviously both strategies have the same expected profit, but are both equally desirable?

The risk of ruin is 2 versus 36 which would be the decider for me.
bry.