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TA vs Buy and Hold - Empirical Evidence from an MBA Thesis

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Super Contributor
Check this out, its from a predecessor MBA student from my business school - to make it easier for those not interested in research methods and approaches, just read the abstract and conclusion - lets discuss - http://scholar.sun.ac.za/handle/10019.1/8326
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Super Contributor
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Super Contributor
Thanks Suki, this is great! nice reading these things!
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Super Contributor
SUKI - did you do an MBA at GIBS? if you did, email me - [email protected]
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Super Contributor
Interesting read. But in lighter note - I read this last week: "Traders rarely die rich, patient investors often do." (At 97, Phil Carret)
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now there is a study that is hitting the nail on the head. But a huge amount of open variables there - as the main thing that makes trading vs investing difficult to compare is leverage (trading depends on it to overcome the effect of taxation). I have done an enormous amount of backtesting over years on JSE end of day data. My three conclusions with trading were 1) shorting is not profitable - period. The frequency of significant down moves are insufficient for reliable profits (only discretionary traders can short - meaning fundamental data is required, meaning you can't model it). 2) you have to take profit. Trailing stops are not profitable. 3) anything less than 10% movement in stocks is pure noise - it cannot be reliably traded / modeled. So a 10% stop loss is minimum, meaning a 20% - 30% gain is also the minimum for trading stocks (index futures a different story, because that makes day trading profitable).
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Super Contributor
Very interesting! As you know, I have a long term buy and hold strategy, so far it works for me, and I do understand that people are all different and this requires various strategies, so I like to listen to everyone's views and understand their thinking. Your comments make perfect sense! OST should actually make a resource library for such stuff, thesis and research reports relating to trading and investing for the investors to gain access to academic literature and insights in the business. its very powerful!
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Super Contributor
there is a wealth of knowledge in the papers published. we just don't read them and appreciate them enough. Werner, my thesis MBA (Finance) was at Wits (WBS) but i read a lot of GIBBS papers too and they helped me in preparing me for the program. However I am considering PhD (Finance) with GIBBS.
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Super Contributor
So, keeping ze timing of this topic in mind, you think sarb is gonna do a preemtive srike on ze fed?
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Super Contributor
Thats great! what was your thesis topic? I am currently doing an MBA at USB and my thesis will be/is on behavioural investing. I will share it with you guys once its done... Probably next year this time if all goes according to plan.
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Super Contributor
Is there anyone (student or alumni) from UCT GSB on this forum?
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Super Contributor
Perhaps they know how to party better. No use dying rich is there?
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Super Contributor
My topic was on Index Futures between the JSE and the top 6 Asian markets. Will share it once the university publishes it. anytime from January.
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