IKN

a plague o both your houses

On risk management in metals and mining stocks

The other day in the update to this post I shared a short mail Q&A session with a reader and one of the subjects that came up was Gary Tanashian over that Notes From The Rabbit Hole (NRTRH) and his prowess in risk management of a market, in this case metals and miners.
Since then Gary’s really stepped up to the plate by giving us two posts on the subject, the posts being…
A Risk Manager Speaks
A Risk Manager Continues Speaking
These are highly readable and recommended way of spending a few minutes of your reading time this morning if you’re serious about stock markets and are adult about the way to participate. For what it’s worth, the second one is the better of the two in my opinion and here’s an extract to whet your figurative lips:
“But this is not a casino and it is not a game.  These are the
financial markets and if you do not have a consistent yet flexible
approach, sooner or later you will get killed.  Yet, if you start trying
to guess when you may be in the kill zone (i.e. planning to get out at
just the right moment) you will either be left out in the cold or you
will get sliced and diced by a whipsaw.


“But to survive and thrive over the long run you have got to have a
plan, parameters to the plan and the ability to subordinate your ego. 
You are not a genius.  Get over it.


“In this business people make up stories about their performance, they
make up stories about their stock picking acumen and they make up
stories about how they have a secret sauce (e.g. ‘my proprietary momentum indicator’ or ‘my super secret volume/buying pressure indicator’, etc.).


“You are the target.  Sometimes these geniuses will make you rich and
sometimes they will make you poor.  It all depends on the environment
within which they are plying their wares.  It is up to you dear
individual investor trying to float your raft in shark infested waters,
to take the ultimate responsibility.”

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