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Long journeys,
I am just wondering how much time other users of AIM spent doing courses, trading other markets such as options, futures, currencies before coming across AIM and that get that little voice in your head that says "I feel like I have arrived".
I'm not sure what I'm trying to say here of what I am asking, or maybe I do.
Ok, what it is, is this, a good friend of mine who trades currencies is arranging a seminar by an american gentleman who uses Elliot Wave as his trading method. My friend is very enthusiastic that I do the course. The cost is $6k plus the indicators only work on a data service (CQG) that had high monthly costs US$600+.
I have been torn about should I, shouldn't I.
From the many thousands spent on seminars in the past most only enriched the people holding them and as with all things if there were some credibility in the thing they taught the window of opportunity soon closed.
I have just wrote an email to decline the offer.
Have any other AIMers had this same experience, and what was it in the end that made they stay with AIM. Is it because 1 + 1 will always equal 2 as Lichello said.
Have any of you folks left AIM for more spicey shores only to come back when you got burned.
Thanks for letting me ramble.
Regards
Neil
Congratulations Tom,
I for one really appreciate all the effort you put into the website and the newsletters.
It is good that at least there are other people (on this forum) in the world that go against the grain and make a stand.
AIM really gives the "little guy" a fighting chance against the institutions.
One question I had for you: You mentioned that you can't put "unearned" income in you IRA account, how is unearned defined?
Was it a capital gain from a sale or a dividend?
I would have thought as you are a trader (warehouse manager)capital gains would be "earned" income. Surely they don't want you to do manual labour as well
Just added a small amount to my Vanguard Bond fund using the other great Lichello idea "Twinvest".
Why does this not get the recognition that dollar cost averaging gets?
Regards
Neil
Interesting Websites
Here are a couple of websites that forcaste great pain and gnashing of teeth in the not too distant future.
I'm hoping AIM will offer a parachute that will at least smooth the way down if this is in fact waht we are heading towards.
http://www.stock-market-crash.net/coming-crash.htm
The other site is a debt clock gulp!
http://www.toptips.com/debtclock.html
And just in the short time I have had it running in background another $81 million has been spent.
I live just a around 1km from the beach and I remember around 10 years ago, nobody wanted to live near the beach as the upkeep was too much what with the salt from the ocean causing high maintanance.
There were a few old houses and it was quiet and peaceful.
Ten years changes a lot. Beach property is now sky high as the herd moves to the seafront and want the view.
Each time an old place gets knocked over it is replaced by three new places in the same spot.
I'd love to know which hidden hand manipulates the herd to make them decide that the beach is the place to live (even though not many people swim these days since the shark attacks).
Being the contrarian, I think I'll go the opposite way and head for the hills.
Cheers
Neil
Options Exercise.
The exercise of options is pretty rare before expiry even if the option is "in the money" except if the time value shrinks to 0 or even goes negative, hence an arbitrage situation.
In the many years that I have sold options I have only been excercised once and that was with a few days to expiry of a well in the money position.
Regards
Neil
Hello Adam,
I know how you feel when it comes to incompetant management.
I got into a stock Australis Mining (AUV.AX) mainly by doing something I told myself never to do, that was, listening to a tip.
The tip was from a relative who knew someone etc.
It was a new IPO, they are a sapphire miner from Queensland. They had a nice glossy, professional prospectus which forcast a profit of $2 million at the end of the financial year and would be paying a dividend no less.
This is unusual for small mining companies to pay a dividend so it gave me confidence in their abilities.
Well, at the end of the financial year there was no $2 million profit, but instead a $2 million loss, no dividend and now an administrator has been appointed as our regulator ASIC was going to appoint a reciever because they may have been trading while insolvent.
Instead of putting in just a couple of thousand in I put more because it was a tip. DO NOT TAKE TIPS!!!!!
Regards
Neil
Hello Adam,
It is an Australian stock code. I've included the .AX suffix if you are using Yahoo.
If you are using bigcharts I think you can just type in TLS as you state, it must be listed in the U.S. as well, they must be depositary receipts by the look of it as the price looks like it is for a number of shares.
Currently its at the lowest point in just over 2 years.
Regards
Neil
New LD-AIM on TLS.AX
Just started a new LD-AIM program on our big (relatively) telecommunications provider over here, Telstra Ltd.
Just after they announced major restructuring the price fell nearly 7%. I had a buy order sitting at $4.01 and in the ensuing panic I picked up a quantity.
There CEO Sol Trujillo, one of your countrymen, seems to be a pretty straight talker, unlike the previous CEO's and he just loves antagonising the government (The government holds 51% of the shares)this causes mucho volatilty in the price.
Now, I don't mind buying Telstra as he has guarenteed the dividend for the next 3 years at nearly 10% (gross), so, if it falls I'll be happy to buy more. Telstra will not go bust, it owns nearly every line into each home in the country.
What's your thinking about the goings on at General Motors at the moment, doom, gloom, bankrupcy etc, is that an opportunity?
At least if you limit your risk to a few $K you could buy at the lowest price in a decade.
Regards
Neil
Hello Mat
How are things going over there at the moment.
Have you had chance to get back home yet.
It seems like N.O. is no longer news worthy, have they managed to repair the levee's and pump all the water out yet?
It would be interesting to see what that book has to say about trading futures in an AIM style, I can't think how he would do it mainly because, like currencies, they leverage involved.
I think the main problem with these instruments is the emotional strain they can exhert you while trading them.
Around 4 years ago I was trading Crude futures via option positions. The unpredictablity of the market coupled with the leverage leads to much sleeplessness.
One of the bigh problems is, as I have mentioned before, is having to deal with a broker, who can undermine even the most disciplined trader. I prefer these days just to place trades electronically and have no contact with brokers.
I'll look the book up on Amazon to see if I can get an idea what it is about.
Regards
Neil
Hello Adam,
That is exactly what I have done.
I guess it shows in a way how efficiently your money is working.
I have two figures I look at the sales value (Revenue or turnover) divided by my stock value at cost.
I also look at the Profit, also divided by the stock value at cost.
You can also look at your profit margin as well by dividing your profit by your sales.
So far my margin on one account is 37%
on my longer running account it is 42%
Now that looks like a hell of a business, just need to get the turnover up!!
Regards
Neil
Hello Grabber,
Just remind me again Steve how you calculate your returns on a monthly basis.
Are you just using your sales and subtracting your costs or looking at overall portfolio value?
Reason I ask is after reading that "Brainwashing" book I have re-jigged my spreadsheets to place more emphasis on the amount of profit divided by the portfolio value "at cost".
To an extent Selengut is right in that (from a trading business perspective) you shouldn't count the increase in your portfolio's unrealised value as a gain as it could quite easily evaporate again.
I still keep am eye on the portfolio current value verses cost value just to see where it stands.
Regards
Neil
Hello Jack.
I have a little group of friends that trade currencies, or rather only a couple out of the group.
I should start at the beginning.
Many moons ago, back in the late '90's I was one of many that joined a technical analysis group called Inside Trader, later they changed their name to Daytrader. At it's peak in 99-2000 I reckon
reckon there were around 1000 in the Adelaide group.
After the market fell to bits in April of that year, numbers dropped off considerably.
Out of that group a small number of us would have meetings each week first to discuss trading then we moved into the Options area.
We sold strangles around index futures, collecting the premium and all thinking how easy is this.
Nassim Taleb would now have a big smile when I say that just after we sold the December positions in 2001, you know what happened. Volatility went throught the roof, margin calls abounded as did accounts exploding.
So, after that it was onto the next thing which happened to be currencies. I didn't like this direction precisely for the reason you state, I felt it was being pushed as more of a money making venture for the currency houses. Short term trading is the most stressful, and I believe, I would be correct in saying least rewarding over the long term.
I went my own way and discovered AIM and pulled out of the group. I thought it came across as naivety that it was so easy to make money from currencies, they were being hoodwinked by slick marketing.
I think the group disbanded after they found that the accounts they set up to trade got wiped out time and again.
There are only 2 of those people I know who still trade actively I have no idea how well they are doing as they are quite cagey when I ask whereas I was usually quite open when it came to describing systems that I was using.
So, I would say that from what I have seen, it is tough making money from currencies over the long term, short term is random luck and should not be mistaken for skill.
Regards
Neil
Buy on Antares Energy (AZZ.AX)
What is this two trades in a week, unheard of.
First was the sale of MSB.AX for 100% gain, I did have another sell order in at $1.25 but just missed out as the market eased back on friday afternoon.
I had a buy on AZZ.AX. This stock is a Gas explorer/producer which mainly conducts its business in Texas no less.
It has just sold it's Turkish assets at a good profit and is buying back some of its stock on market.
I purchased some at $0.64 some more at $0.45 then had a sale at $0.73 and have now added to the position ar $0.48, nice volatility pattern.
Regards
Neil
Hello Tom,
In regards to your article on short selling using AIM.
Indeed it sounds like a feasible thing. The only problems I could forsee are these.
I don't know about in the USA but here in Australia we have no online facility to cheaply short sell. In normally has to be done through a broker attached to a decent size institution where they have access to stock to short, usually their own holding.
So, you would be paying top dollar for the service and from my experiences shorting with brokers over here, most, were hopeless.
Of course I guess you could use CFD's.
I would thing that once you got to the shorting stage that you would have to take the same precautions as when in the buying stage of AIM , ie space the shorts out 1 month apart and maybe increase the sell bias incrementally on successive sells.
At least you wouldn't be hurt by a "short squeeze" as the price would be moving the opposite way.
The main fear is the old psychological blue sky stock price against a limited downside.
Again maybe a limit on the number of successive shorts would be the answer.
Anyway the price would have had to rise quite an amount to have run out of stock and hit a 3 short limit.
Regards
Neil
Sell on Mesoblast.
Had a small sale on Mesoblast (MSB.AX) today.
This was one of the stocks I picked up only a small initial quantity of and now wish I had more of.
I originally bought just $800 of this little biotech that is involved in the growing of adult stem cells to treat broken bones that won't heal correctly. Very interesting technology with a huge application.
I picked them up for 50c a share and had to keep hitting the Vealie button on my A.I as the share took off. I eventually sold half my holding at $1.04, so in effect I have paid initial outlay and it now owes me nothing.
I would like to buy more but will now have to wait to see if it comes back to 66c before buying more.
I like this business.
I'm just in the middle of reading the Nassim book "Fooled By Randomness" which I think applies so much to trend following (or trying to) type trading.
Regards
Neil
Turnover
Well, I've finished reading the "Brainwashing" book.
I find it interesting how Mr Selengut impresses upon us that the turnover of inventory is an important aspect of this game.
It is something I had not actually considered and probably not something I have actively sought to maximise.
In fact with some of my AIM settings being quite wide I can hold stocks for a year or more, I didn't mind due to the more generous tax treatment though.
One thing I should remember is to look at the income as a function of the "Working capital" rather than of the portfolio value at any moment in time.
After all you can't count on your gains until they are realised.
I shall do some more testing to see how his method stacks up agains AIM.
Cheers
Neil
Book Conclusions,
Hi all out there that have read the "Brainwashing of the American Investor" book.
What conclusions did you draw from it in relation to AIM.
From what I have read so far it sounds like he got underway trading his account using these methods at around the same time that Mr Lichello published his book for the first time.
I find it odd that he pummels Wall Street mercilessly but then advocates a "real" broker as opposed to an online broker which these days are straight through anyway.
All I have ever had with real brokers is trouble, usually by undermining my decisions or not carrying out instructions properly.
I also find mountains of information on the Etrade website which I use so there is no lacking there.
I'm not keen on his method of selling his entire position at only 10% above breakeven. On small holdings this is not much meat on the bone.
By selling only a portion of the position and letting the balance ride at least you get to participate in an extended rally.
One thing I have to look into more is the Bond side of the equation to get increased cash flow to fund the positions.
Other opinions would be good to hear.
Regards
Neil
SELL in NAL.AX
This is a little one of my ALD-AIM stocks where I bought $1000 at 48C then another $800 at 35C, I missed the opportunity to buy some more at 30C mainly because my market order didn't trigger at the price I entered it at (I was being a little ambitious by putting it in at 29C), by the time I adjusted it up the price had begun to move up.
Once again the psychological problem of listening to noise also played a part.
The noise in question was a query from the Australian Stock Exchange regarding their cash flow position and were they about to run out of funds.
This kind of made me in little hurry to pick up any more stock.
Well, all turned out ok, the raised more funds from some U.S. institutions and the price reversed.
I placed a market order in at 62c and sold a portion of stock today .
Don't you just love AIM.
I've just arrived home from a screening of "Enron, The Smartest Guys In The Room", great film and great lesson why diversification and controlling risk is the only way to go.
Regards
Neil
Not again,
Well, it looks like the religious fascists have been at work again in Bali overnight.
I've heard around 35 have been killed so far on that beautiful island.
I in was only a couple of years ago I was sitting one of those restaurants on the beach at Jimbaran Bay watching the sunset over the sea, a warm calm evening with people sitting at tables on the beach eating their meals.
This is obviously too much for the religious fanatics that seem to be running rampant around the world today.
Lets just hope that the injury list does not grow and the people of the island are not ruined by these fools.
Regards
neil
PYA
Hello Tom, I also have made note of the IW readings as Australia's market follows the US market to a certain extent.
Currently I think the Australian market is overextended but it's amazing how the sirens want to beckon us to the rocks.
Fund managers that were six months ago were saying the market was looking expensive at 4200 are now saying its cheap and good value at 4600.
It keeps hitting new highs each week on the back of the China story, any wobble there and it will come crashing down. I'm keeping my ears open for bird flu reports.
I've not started any new AIM accounts for a while and those I have, have been the variety where I only put $1000 down and wait to see if we get a downside move to fill up the tank.
I've just transferred some cash to a Vanguard Bond Fund so I'm just happy to wait around and hopefully get a few last customers through the door before the storm.
Regards
Neil
Sell on SSX.AX again!!!
I had a sell order on a good till cancelled on Smorgon Steel (SSX.AX) a while ago and it must have been purged when the price fell away from my sell point a couple of weeks ago, I only found this when I didn't get an email when it pushed through that level again.
I reset the order and got a sale today at $1.61.
My previous sell was less than a month ago on the 31st Aug where I sold a quantity for $1.48.
A nice LIFO of 77%, I was beginning to get a little (only a little) tense waiting for a sell especially as the I.W. was turning bearish.
There was also some interesting movement in Mesoblast (MSB.AX) which ended up 14% on the day, there was an intraday rise of double that.
Thanks for the book tip folks, looks like some more interesting reading in the next few months.
Regards
Neil
Bond Funds: What to look for.
Hi Tom,
Are there any key things you look for when making a decision on what bond fund to put your money into.
I have been doing a little digging over here and I find most of them have a minimum investment of $20k, there are a few where the minimum is $5k.
I then looked at some of the returns and they are only a small amount more than I can get on the cash balance at on one of my bank accounts.
I many cases when you subtract their management fees they are well below my banks net account return.
If you have any advice on this I would greatly appreciate it.
The Aussie market has just hit a new high of just shy of 4500 I'm just wondering when gravity is going to kick in.
It was only just over 2 years ago that the market was at 2700,
a 67% rise, that doesn't strike me as sustainable.
I am quite happy to sell stock off as AIM instructs as I feel that more buying may be around the corner.
There is another property frenzy going on at the moment in Port Adelaide, a redevelopment is going on in the neglected area and the people buying are outsiders as most of the people who live there already cannot afford the $500,000+ for most of the houses.
Regards
Neil
Proof of method,
Why oh why didn't I come across the Lichello book many years ago I cry.
Before coming across that non descript little paperback (which I have read for the 3rd time just recently) I was a system trader, a technical analysis trader and option trader.
I have just had a look at some of my results over the years on my trading accounts, they make for grim reading.
Tax Year 01-02: Loss of $8,744.88
Tax Year 02-03: Loss of $13,324.85
Tax Year 03-04: Loss of $6,837.34
Tax Year 04-05: Gain of $7,438.80 (first full year of AIM)
Tax year 05 - Gain of $850.50
What starker contrast can there be, I'm now going to count my years in investing as year 1AL (After Lichello) and the others as BL (Before Lichello)
Keep up the good work.
Regards
Neil
Hi Grabber
Great to see the benchmarking against the indices, it would put most index tracking funds to shame if you were just a buy and hold type.
It always makes me laugh the maxim that is spouted so oftem that "It's time in the market not timing the market" AIM has proved that to be the cry of ignorance.
How long is the life period that you have at the bottom of the table?
judging by the returns from the indices I would say it would be around the start of 2001 maybe?
It certainly seems like you are getting plenty of action from it.
I'm hoping to build up to around 20 or so LD-AIM programs as I need to feel involved and that would guarentee at least a few trades during the month.
Regards
Neil
Skeleton Key
Our usual Tuesday ritual is for a group of us go to the movies.
Each week a different person gets to pick the film (who says we are not democratic) and so we get to see films that we would not normally pick.
Anyhow, I'm sidetracking.
This weeks pick was Skeleton Key and guess where it was filmed, yup you've got it N.O.
It was very strange seeing all these places that are more than likely no longer there. Even the spooky old house right in the swamps area (I'm sure it was a real house and not just a set piece) that would have probably been washed away.
I couldn't believe how flat the place was, it seemed to have such an air of serenity about the place. It looked very low lying.
It was an enjoyable film as well.
Regards
Neil
Hello Matt,
Good to hear that you are doing better and also good to see that eventually people are being bused out of the area.
The hardest part is going to be going in there and cleaning the place up.
I don't think I could do that so my admiration goes out to those people who have that grisly job.
The thing I was thinking when seeing all those pictures of those people who were left behind is these are the very people that Lichello would want to learn and deploy his systems, whether AIM or Twinvest to build up even a small portfolio.
It seems obvious that the wealth of the country is not getting shared around in any fair way, it would be so good if AIM could make a difference for those people.
I do my best to educate people but as always you can't hand feed all the time, I'll be happy when one person comes back to me and says wow, thanks for introducing me to investing in a better way.
When I get that person saying that I'm sure I'll post it on this website.
Best regards
Neil
Hi Matt,
Good to hear you managed to get out safely.
I had to check out where Slidell was and found it on the Google earth site, wow just across from the lake, you must have taken the full brunt of it.
That must have been pretty frightening. How was the damage to the town?
Are there thousands coming across the bridge to escape?
I think it may be a while before people decide to go back and restart again in the same area.
Have a safe journey.
Regards
neil
Hello Charlie,
Thank you for your informative posting, I'm sure your information is better than mine.
That is why I think we should extrapolate your results to allow us to all own automatic weapons, I would feel far safer that way.
I also think if every country had nuclear weapons the world would be a far safer place as no one would use then and war would be eliminated.
Peace on earth would soon follow when we allow guns in schools to stop those bossy teachers from wasting our time teaching us useless facts.
)
Best regards and happy holidays
Neil
Hello Tom,
I always make it a habit the watch Newshour with Jim Lehrer, the very good PBS show.
It must be Thursday evenings show I see here on Friday afternoon.
It is amazing the different spin I'm hearing from the government spokesmen being interviewed and what I'm hearing and seeing on from Australian reporters on the ground in New Orleans.
The Government people are saying there is a little trouble but nothing to be worried about and then the reporters for Australian foreign news channel say its like a battlefield with shooting, looting and destruction happening in far greater levels.
I almost get the feeling the poor of N.O. have been abandoned because they are poor and black (mainly), very sad state of affairs.
I also heard another storm is brewing in the Atlantic.
Good luck folks
Regards
Neil
Hi Jersey,
The scenes coming through from N.O. are terrible, not something I ever expected to see in the USA.
It seems to me what is needed, from an engineering perspective, is distributed power systems rather than grid systems.
I remember thinking about this when you guys had that big blackout over there a while back.
I'm hoping once these politicians can get off their high horses in regards to how wonderful nuclear will solve all problems that they can get back to looking at fuel cells and having homes powered by these devices and so at least if a disaster strikes power can be still found in localised areas.
I'm not sure where you heard about the gun laws in Australia being terrible but I don't think it was correct.
There are very few gun related deaths over here.
I have never even seen a real gun, not either any of my work collegues.
If someone does get shot over here it makes national headlines.
A story you may like to read is on the link below showing the reduction by 65% of gun related deaths since the ban.
http://www.theaustralian.news.com.au/common/story_page/0,5744,11202534%255E1702,00.html
The Australian is the big national paper.
Hope there is some good news out of N.O. soon.
Best regards
Neil
Katrina Fallout
Hi Tom, I have been listening to the radio reports this morning on aftermath of the hurricane over New Orleans.
It doesn't sound good.
Being an anti gun person myself for the very reason that I realise how fine the veneer of civilised society actually is.
Seeing how it is now playing out over there with gun toting gangs on the rampage looting and robbing and shooting at rescue helicopters just confirmas that weapons have no part in a civilised society.
The gun lobby and companies have sold the people a lie in the name of profit and now unfortunately the criminals with the guns will now get to impose their will on the people of New Orleans.
I hope I doen't get shot at too much for my views there
Regards
neil
Ship 'em out!
Wow, after almost falling asleep at my chair waiting for customers to come into the shop to buy, I get a rush.
Just sold some Antares Energy (AZZ.AX), This little Australian company is a junior oil/gas explorer which is now almost exclusively drilling in the USA mainly Oklahoma I believe.
My LIFO gain on this is 60%. FIFO gain of 12%.
I need a big sign to hang outside the shop to get more buyers in.
Regards
Neil
Hello Tom,
I would like to AIM some sector funds but find here in Australia there is very little choice.
I have a Vanguard Index tracker, it an International fund and so hardly moves. Although saying that, I did buy it in 2002 when the price was $1.05 and it has gone down t0 $0.70 at one point, but, sob, AIM was not on my horizon at the time.
I did actually dollar cost average on the way down until my nerve cracked. It is now at breakeven at $0.95.
I have also got into some Platinum Asia & Japanese funds but they make them difficult to AIM by having a minimum sell value of $10,000, a bit unfriendly.
Regards
Neil
Hi Grabber,
While SSX.AX is certainly volatile it is also regarded as a large company in the top 200 of the Australian Stock Exchange.
It currently has a market cap at A$1.3 billion so its not a minnow but, being tied into volatile steel and underlying commodities causes large swings.
This is why my settings on some of my holdings have 20% on the buy and sell SAFE, twice the standard setting.
I purchsed SSX in 2003 at almost the low (Luck rather than skill, and a huge dividend yield of around 10% at the time).
I have other stocks that make SSX look as if it is asleep
Regards
Neil
Its a Sale!!
Just had a sell in Smorgon Steel (SSX.AX) which I merging into an LD-AIM program a few months ago.
Purchased at $0.91, sold some in February for $1.34 and now just sold some more for $1.48 a nice little 62% gain.
It is amazing how after many years it is so much more gratifying to see more profits on stock trades than losses.
As we all know the hardest thing to do is follow the mantra that sounds so simple "sell your losers and let your profits run".
It's a great hindsight statement spoken at many seminars probably by people who make more money from seminars than they do from stocks.
Regards
neil
Hello Adam,
You should look at Australian stocks, they seem to fluctuate far more than US ones, mainly for the reason that they are lower priced.
I'll give a few examples of decent capitalised companies.
The low and high over a year.
BHP $13.18 - $21.07
RIO $35.70 - $53.40
OXR $0.76 - $1.24
PTD $1.19 - $2.20
PBL $13.30 - $17.50
As you can see the low priced stock fluctuate more PTD nearly 100%, OXR 80% or so.
There are many stocks in the mining and oil area and now uranium that are shooting around like crazy.
Regards
Neil
Identity Theft
Just finished watching a very interesting program on identity theft. On it they mentiond something that may be regarded as a left of field theory about the economy.
The continued growth of the economy relies on consumer spending, a lot of this spending is in the form of credit and credit cards.
The growth in theft of credit card numbers and other personal details may end up derailing the credit driven consumer boom, as, after all it is based on confidence.
If the confidence in the medium is shattered then the boom grinds to a halt.
The slothful banks are just sitting on their hands and no doubt will feign complete surprise when the edifice starts to crumble.
Why they don't fix the problem now before it gets totally out of control I'll never work out.
Regards from a wintery Australia
neil
Hello AIMster,
Im using A.I. as my main tool for testing scenarios and I think it is excellent.
This is how I've been working out the best ways of handling LD-AIM accounts.
I can search out the volatile stocks then use the backtesting facility to play around with the SAFE, and sell amounts.
As I start off with a small stake, I don't mind if the stock falls.
In fact I may sometimes do an initial $800 investment then set the SAFE to 0%/20% so it is buy biased.
It helps me get the stock at a better price than if I spent $3000 .
If it goes up straigt away I'll probably just keep resetting the sell price higher. To sell at double the price would be nice and sometimes possible in the mining stock area.
Without A.I. I would be far more in the dark when it came to testing with real life data.
Cheers
Neil
Hello Bosco
I must admit I don't know anything about Bridge but I think I can see what you are getting at.
Again a dependant probability using the notion of what someone didn't do to hopefully improve your odds.
I just love these discussion where you have to exercise your brain, so much better than watching mindless TV.
Regards
Neil
Remember the solvency rule.
Hi Core,
Remember that old gem that I posted many moons ago (I can't claim credit for it but would like to)
The markets can stay irrational longer than you can stay solvent.
Wow, thats a damn good saying, and so true.
Cheers
Neil
Well done AIMster,
I knew we had a great intelligent board here.
A great description of the somtimes counterintuitive nature of probability and choices made.
It is a linked probability question as there is two stages to it it fooled me at first until I looked at it this way.
Instead of three door imagine 100 doors.
The chance the the prize is behind the door you haven't picked is 99%.
The host opens 98 of the other doors and reveals goats behind each. Now would you swap door or stay with what you have.
The answer is that of course you would swap as you chance would move from 1% to 99% probability immediatedly, purely because of the host will not open the door with the prize behind.
Ta da
Neil