My Math Forum Stock picking

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 February 1st, 2013, 06:58 PM #1 Member   Joined: Aug 2012 Posts: 41 Thanks: 0 Stock picking Hey there, I just took a job as a junior stock broker. We are having a competition with a fictional 100 000$portfolio. I can pick anything --- stocks, bonds, forex, even insurance. I took Calculus II, took multivariable calculus (and failed), Linear Algebra I, Linear algebra II (and failed), then I dropped out due to being extremely irresponsible in daily habits. I'm thinking about reading the book by Edward Thorp on this to get an idea of which stock to pick, is this a good idea? http://www.edwardothorp.com/sitebuilder ... market.pdf and this: http://www.edwardothorp.com/sitebuilder ... on2007.pdf Because well.I'm not at all sure what I'm doing and I have no real faith in current (mainstream) stock market predicting strategies, Also, we use software doing Monte Carlo simulations at work to evaluate the chances of a client making it to retirement with their current portfolio, how accurate is this thing? I'm less looking for a suggestion for individual stocks but a methodoloy. February 2nd, 2013, 10:43 AM #2 Global Moderator Joined: Nov 2006 From: UTC -5 Posts: 16,046 Thanks: 938 Math Focus: Number theory, computational mathematics, combinatorics, FOM, symbolic logic, TCS, algorithms Re: Stock picking If your goal is to win this competition you should look at the number of competitors and choose a strategy sufficiently risky to be able to beat all of them. This will not be a good strategy in general! Quote:  Originally Posted by Spook I have no real faith in current (mainstream) stock market predicting strategies You're off to a good start, then. I think that it's a fool's quest, that you should think in terms of optimizing for a particular long-term goal rather than heavily overweighting single stocks and thinking yourself a genius when, by chance, they do well (and writing it off to bad fortune when they don't).  February 2nd, 2013, 11:19 AM #3 Member Joined: Aug 2012 Posts: 41 Thanks: 0 Re: Stock picking Oh, I have no illusion on the purpose of the competition The competition is rigged so that it shows to the brokers that one guy may be right once or twice, but the boss is always going to be within the 2nd or 3rd place (out of an office of 15-20 ish brokers) over several 6 month competition. he takes the most conservative possible strategy based upon fundamentals. He can't order us to pick a specific strategy since we're 100% commission so he tries a subtle game of carrot and stick. But anyway, it's 240$ if I win... so its good pocket money and good education.
 February 2nd, 2013, 11:32 AM #4 Member   Joined: Aug 2012 Posts: 41 Thanks: 0 Re: Stock picking but yea i agree in the long run, it is certainly a fools quest and I am not going to use that strategy in general. Can't edit so I'll just say It is more important to find my muse then to win the 240\$.

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