As a new investor, I struggle with the following some of these Hedge Funds have when I see that I am outperforming almost all of them, and so is the market....why not buy an ETF and save the 2 and 20?
This leads to a couple of interesting ideas.
A long time ago I heard the saying that the worst thing that can happen is to make money on your first option trade. The idea here is along the lines of confusing genius with a bull market or skill versus luck. Much has been made about the extent to which hedge funds are generally lagging the S&P 500 this year. The broad scope of what "hedge funds" target makes the point useless.
Additionally I would submit that the true test of a hedge fund or other managed pool of capital is not whether it is up 20% when the market is up 15% but what it does when markets are relatively tougher to navigate. Also completely ignored is the concept of risk adjusted returns which we talk about quite regularly here. As the above new investor's process evolves he will probably become more aware of risk adjusted.
There is nothing wrong with being lucky, I attribute luck to a lot of things in my life. The key here is knowing the difference and knowing what your wheelhouse actually is. Long time readers will know I am all for expanding your wheelhouse but it is unlikely anyone will be an expert on biotech stocks after reading one article in Money Magazine while waiting at the airport.
I've posted a lot of pictures from our trip to the Black Hills from this summer. I looked through the photos recently and found a lot that I think are neat that I had not posted before.