Are Top Athletes Richer than Top Funds Managers?

16 October 2021 | Updated: 30 October 2021

Note: This piece was first published in 2014, so some facts in it are out-of-date. However, the truth it passes across is timeless.

“If you understand this way of thinking – that by taking smart risks you can make money over time – it will improve your willingness to take risks.” – Bruce Bower

What is the answer to the question that forms the topic of this chapter? The answer is a big NO! Floyd Mayweather, LeBron James, Cristiano Ronaldo, Tiger Woods, Roger Federer, Lewis Hamilton, Mahendra Singh Dhoni, Cliff Lee, Usain Bolt, etc. Each of these stars is one of the best in their respective fields, and no doubt, they’ve achieved success and fame that billions of people can only dream of. Yet, each of them is still poor when compared to the highest paid funds managers in the world.
Are Top Athletes Richer than Top Funds Managers?If you want to know what each of the star athletes mentioned here earns, you will need to do the research yourself. On Buzz.money.cnn.com, Jesse Solomon shows a list of the ten highest paid hedge funds managers in 2013: David Tepper, Steven Cohen, John Paulson, James Simons, Kenneth Griffin, Israel Englander, Leon Cooperman, Lawrence Robbins, Dan Loebb and Paul Tudor Jones.

David Tepper earned $3.5 billion last year. In 2009, he earned some $4 billion. He’s currently worth $10 billion. David’s riches are even far more surpassed by those of some market legends like Carl Icahn ($24.5 billion) and George Soros ($26.5 billion). I don’t even want to mention the Wizard/Sage/Oracle of Omaha.

How much do you think a boxing champion like Floyd Mayweather earned? He earned $105 million, thus currently making him the highest paid athlete in the world. Nevertheless, the tenth highest paid hedge fund manager is Paul Tudor Jones who got a paycheck of $600 million in 2013. This means that Paul is more than five times richer than Floyd in terms of income last year. Paul’s net worth is $4.5 billion.
The highest paid soccer player in the world at the time of writing is Cristiano Ronaldo, with less than $100 million in total earnings per annum; yet his income is more than six times smaller than that of the tenth highest paid funds manager in the world.
Do you now see my point? The world of trading has produced many billionaires – past and present. These traders are extremely rich and the incomes of the star athletes pale into insignificance when compared to the earnings of those funds managers.

It’s true that top athletes enjoy the heavy glare of publicity and are far more popular because of myriads of fans the world over. Some professional traders aren’t famous because they trade behind their computers in the comfort of their offices. Most people don’t know them, save interested individuals who are mostly traders/investors themselves. When many football fans talk about how rich their favourite players are, they are often not aware that some professional traders are far richer than them.

With a worth of $1.1 billion, the New York Knicks are the most valuable team in NBA for 2013 (with revenue of $243 million for that year). Real Madrid is the most valuable sports team, worth $3.3 billion (with revenue of roughly $700 million per annum). However, David Tepper, who is not the richest trader in the world (only the highest paid for the year 2013) is far richer than the New York Knicks and Real Madrid combined. According to Jesse, the top 25 funds managers took home $21 billion among themselves last year.
You should congratulate yourself on being a trader, irrespective of your experiences in the markets. The richest traders didn’t become rich overnight, nor did the richest athletes, for most of them had very humble beginnings. By adjusting your trading approaches to achieve everlasting triumph and by sticking to those approaches, you’ll soon reach financial freedom (though you may not attain the list of the highest paid traders).

Another quote from Bruce Bower ends this chapter:

“Focus on making good risk/reward decisions, keeping losses small, and you will start to become profitable.”

Taken from the book “Unlock Your Potential with the Realities of Trading” 

 

 

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Michal K. and Bitcoin – a Mighty Lesson

18 September 2021 | Updated: 19 September 2021

Michal first heard about bitcoin in 2014. He had $4,000 in his savings account. Inspired by his programmer friend, a rabid bitcoiner, he went all-in.

“At the time,” he wrote on his Medium page, “I invested my $4k, the price of a bitcoin was about $600. I got 6.55 BTC. I will never forget that number. Over the next half a year, bitcoin’s price kept steadily declining, until it bottomed out at $152, in January 2015. That’s a 75% loss just like that before I knew anything about how investment (or crypto) cycles work!”

But Michal was committed. He held. More importantly, he had other things occupying his time. He was zooming out.
In April 2017, the price of bitcoin hit $1,200.

He held. And he kept learning.

Between April and December of 2017, it shot up to $20,000.

He held. And learned more.

And then, it crashed down to $6,000. While most people were panicking, what did Michal do? He bought more.

Recently, he began leveraging that crypto in “blockchain banks,” making about $3,000 per month. And now that DeFi is maturing, he’s begun pulling in, on average, $20,000 per month.

His portfolio recently hit the $1 million mark.
Michal K. and Bitcoin – a Mighty Lesson He wrote:
“The reason most people who invest in crypto don’t end up rich is that they can’t hold — or, in the crypto parlance HODL. HODLing is much harder than it sounds.”

Michal offers these three pieces of advice:

ONE
Patience and calm. I watched my holdings dip 75% almost right after I bought them. I held. Then I watched them dip 85% again in 2018. I held. And I bought more. I’m not even counting all the other 20–40% dips in-between.

TWO
Timing is king. Yes, I was lucky that I heard about bitcoin in 2014. But it was my decision to seize the day and not wait a couple of years to see if the technology proves itself. Then again, in 2019, when the price was low, I topped up. It was the right time to do so, even though the returns were far from immediate.

THREE
Less is often more. I know many people who at some point became active traders in crypto. All of them either lost money or made several times smaller gains than they would have if they just held BTC, as I did. The first rule of trading is — don’t lose money. Don’t trade the market if you lack the experience… or the patience to wait for the right opportunities.
Again, if you’re interested in crypto in general, dipping your toes in all it has to offer isn’t a bad idea. Being well-rounded can only help.
But, in the end, those who play to their strengths win out.


Author: Chris Campbell

For Altucher Confidential

 

NB: This article teaches a mighty, real-life lesson. Thank you, Chris C. 

“Great investing requires a lot of delayed gratification,” says Charlie Munger. And this quote is also apt for the blockchain industry. Don’t sell your coins. It doesn’t matter if crypto markets undergo seriously protracted bearish trends, which can happen anytime; viable coins will ultimately trend upwards and bring massive returns in the future. Selling your coins is like killing the goose that lays the golden eggs. Rather, you should use serious bearishness as opportunity to buy more coins. This advice is enough for wise investors.

 

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Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

Perfect Crypto Investment Strategies – Part 3

14 August 2021 | Updated: 15 August 2021

A NON-DIRECTIONAL (MARKET-NEUTRAL) CRYPTO TRADING METHODOLOGY
It has been said often and often, that rule-based discretionary traders are the best traders on this planet. For you to be a winning trader, you need to abide by the Golden Rules of trading, which ensure your lasting success in the markets.

Trading principles that work are timeless and non-market specific. Those principles ensure that you triumph no matter what the market does. And by following the principles, they make you smarter than many other traders out there, who are on the other side of your trades. Most traders on the other side are losing traders, and sincerely speaking, the losses they sustain are what translate to profits for smart traders.

In order words, for you to make profits from the markets, certain traders have to lose. One trader’s positivity is another trader’s negativity. To enjoy everlasting profitability in the markets, the trader must find ways to outsmart other market players; otherwise, the trader will run into problems.

What can you do to outperform other traders?
WHAT THE MARKET-NEUTRAL STRATEGY DOES
For those who don’t know what they are doing, and who have not mastered the art of trading, trading is one of the hardest jobs in the world. Why is trading so hard? It’s because no one knows where the price is going next. Yes, we predict, but we’re not always right.

Sometimes, the market will go as predicted, and sometimes, it won’t. Sometimes, the market will first go against you before going in your favor, and sometimes, it would first go in your favor, only to later turn against you.

In face of all the vagaries of the markets, how then will one manage to make profits? That’s where a non-directional trading methodology like the one used here is extremely useful.

The trick is to catch pips no matter what the market does. Granted, we may not have a 100% guarantee about where the market goes next, but we know that we will make profits no matter where the market goes. The aim is to generate profits regardless of what the market does, whether up or down.

We no longer care about the direction of the market once we have entered; knowing full well that we will make money whatever the market does afterward. That is the essence of this market-neutral system.

UNCERTAINTY IS OUR ALLY
The unpredictability of the market, which scares most people away, is the most important determinant of our gains. It is the factor that enables us to make profits.

What most see as a problem is a boon to us. What causes fears in other people is what brings peace of mind to us. We make profits only because we enjoy dealing with losses. We can’t predict the market with certainties, yet we make money from uncertainties, which will forever be on our side.

Once we open trades, the market can do anything they like, and we eventually make money regardless of that.
TURNING LOSS INTO PROFIT
Embracing loss to make profit is something that must be done, in order to be triumphant on the battlefield of the financial markets.

In one of his past newsletters, Dr. Van K. Tharp says:

“In any endeavor in life, you have up and down periods. Dealing with the market has many such up and down periods. To profit from the up periods, you have to tolerate or even “enjoy” the down periods.

…It turns out that one of the major problems people have in going from their current location to their desired goal is all of the walls or obstacles they continually run into each day. There is a common solution to these obstacles — make them okay. Don’t worry about getting from point A to B, just enjoy bumping into the walls.

If you’re in the market, one of the biggest obstacles you’ll face is the wall of losses. It’s fairly difficult to deal with the markets if you are not willing to lose. It’s almost impossible. It’s like wanting to be alive, but only wanting to breathe in and not breathe out.

When you want to be right, you’re not dealing with the obstacles. Instead, you’re forcing things. When you want to make a profit out of today’s trade, even though it’s a big loser, then you’re not dealing with today’s obstacle. Enjoy the obstacle, embrace it, and be willing to accept it. If the market tells you it’s time to get out at a loss, then do so.

Quite often traders take the relationship they are having with the market and transmute it by developing a different system or trading with a professional money manager. Now, the old struggle they used to have with the market—of not accepting what the market gives them—becomes a similar struggle they are having with their system or with their new advisor. Instead of giving up on the market after a string of losses, just in time to miss the really big move, they avoid their system until it is doing well. When it is showing tremendous profits, they jump on board — only to be blown away by the market. And the same thing happens when they invest with money managers. This desire to be “right” motivates them to jump to the top money manager when he’s hot, only to go through a big string of losses. It’s all the same thing.

Psychologically, if you don’t come to grips with your obstacles and embrace them, you will simply find another way to repeat them. Realize that the walls occur because they are there for you to bump into. When you accept this fact and embrace it, you’ll accept bumping into walls. And strangely enough, you hardly even notice that the walls are there. The result will be a new level of success in the markets.” (Source: Vantharp.com)

MANAGING TRADES WITH THE GOLDEN RULES
As it has been said before, trading principles that work are timeless, and we use some of them in this non-directional trading methodology.

Let us examine a few of them:
Cut your losses short:
This strategy works because we have mastered the art of cutting losses. We cut as many losses as we sustain, as we don’t give them enough breathing space. Once it is clear that a trade is not going in our direction, we truncate it. We truncate as many losses as we see. If you don’t like cutting losses, you can experience occasional wins, but you’ll end up being frustrated and your trading career won’t last long. There is no wisdom in allowing your losses to become bigger.

This is a positive expectancy system since losses are often smaller than profits. If a strategy generates losses that are bigger than profits, then that is a negative expectancy system, just like scalping strategies which usually have large SLs and tight TPs (a few losses will wipe away most or all previous numerous profits). Cutting your profits and running your losses is counter-intuitive and counter-productive.

If you can deal with losses successfully, you’ll easily garner decent gains whenever you come across them.  

Over the years, I’ve studied hundreds of market wizards all over the world, and I even interacted with several of them and gotten insight into their mindset. Their core secret is that they know how to avoid big losses….

Get out of bad trades! The most important factor that will make you a permanently triumphant trader is your ability to avoid big losses; and one surest way to avoid a big loss is to cut it while it’s still small.

Ability to control losses is the greatest skill that can be used to generate an attractive account history in the long term.

Let your profits run:
Once we make profits, we give them enough leeway. Since we know that a profitable trading system is the one whose average profits are bigger than its average losses, we leave our profits in an attempt to make them bigger. The only way to stay forever victorious as traders is to make more money during winning streaks than what is lost during losing streaks.

Safe positing sizing:
That is the part of the system that tells how much to risk per trade. Our positing size is always small. If you risk big, you will eventually lose big. If you risk small, you can then go for small and consistent profits.

Never let your profit turn into loss:
That is straightforward. Once you make decent profits, you have to protect them, and never allow them to turn into losses. Breakeven and trailing stops come in handy in this aspect. However, we use only breakeven stops to make our position risk-free once we make decent profits.

EXECUTING THE STRATEGY
Although the actual entries and exits rules for this non-directional crypto trading strategy are not revealed here, the Golden Rules above are part of the rules we use to implement the strategy.

This gives us a huge edge!

Moreover, this particular method of approaching the market is not used for generating crypto signals. Rather, it is used for our private accounts management.

CONCLUSION
In part 1 of this series, we discuss the best way to discover and invest in cryptos that will perform very well in the future. In part 2, we discuss a position cum swing crypto trading strategy that enables us to find rare, high-quality opportunities and dive in. This part 3 and the final in the series, has examined ways to make money regardless of the directions of crypto markets.

 

Source: https://learn2.trade/ 

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Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.

Non-Fungible Tokens: A Quick Look at The Journey So Far

27 June 2021 | Updated: 27 June 2021

As suggested by its name, non-fungible tokens (NFTs), unlike fungible tokens like Bitcoin or gold, cannot get traded for something of equal value. For example, timeless artwork like DaVinci’s Mona Lisa is a non-fungible entity in that it cannot get exchanged with another Mona Lisa.

Non-fungible tokens are typically blockchain-minted artworks bearing unique encryption codes, which allows for exclusive authenticity and ownership. In today’s market, an NFT can represent anything from artwork to cartoons to memes, sportscard, or a whole album. Recently, fashion designers have begun jumping on the NFT bandwagon.

To emphasize just how big the NFT industry has become, reports show that over 500,000 NFT artworks, worth over $85 million, got sold in March 2021 alone.

Just about anything and anyone can create an NFT these days. To make an NFT, all that is required is to create unique content or artwork and upload it to NFT marketplaces like Rarable, Nifty Gateway, OpenSea, or Mintable. Creating and uploading an NFT is as easy as taking a walk in the park. However, the real challenge is selling your unique idea for real value.

Beeple’s Everydays— The First 5000 Days

Most Expensive Non-Fungible Tokens Sales So Far

In February, Canadian musician Grimes became one of the largest NFT auctioneers so far. The songwriter and record producer took to social media to promote some of her art content on Nifty Gateway and ended up selling $6 million worth of artwork in about 20 minutes.

Several other artists and content creators have grossed huge revenues for NFT sales over the past few months. Listed below are some of the most expensive NFTs ever sold and their developers:

  • Beeple — (Everydays— The First 5000 Days) $69 million
  • Beeple — (Crossroads) $6.6 million
  • Kevin McCoy — (Quantum) $1.58 million
  • Edward Snowden — (Stay Free) $5.4 million
  • PAK — (Metarift) $904,000
  • Mad Dog Jones — (Replicator) $4.1 million
  • WhIsbe — (Not Forgotten, But Gone) $1 million
  • SSX3Lau — (Unnamed) $1.33 million
  • Cryptopunk — (#7804) $7.5 million
  • Jack Dorsey — (First Tweet) $2.5 million

 

You can purchase crypto coins here: Buy Tokens

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  • Over 100 different financial products
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  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
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  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.