Jackass Investing

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Jackass Investing:
Don't do it. Profit from it.
Book Cover Image - Jackass Investing.png
Author Michael Dever
LanguageEnglish
Subject Investing
PublisherIgnite LLC
Publication date
2011
Publication placeUnited States
Pages284
ISBN 978-0-9835040-0-9
OCLC 760086114

Jackass Investing: Don't do it. Profit from it. is a book written by Michael Dever published by Ignite LLC in 2011.

Contents

The book has also been released under the title Exploiting the Myths: Profiting from Wall Street's misguided beliefs. [1]

Overview

"Jackass Investing" is an investment book that challenges conventional investment wisdom [2] and "presents an entirely new system of thought." [3] The book describes 20 common widely held beliefs about investing [1] and explains why each is a myth and not a fact. [3]

The book is based on the trading philosophy of author Michael Dever, [4] which is based on broad strategy and market diversification. [5] [6] According to Dever, the definition of "Jackass Investing" is taking unnecessary risk. [7]

The book was published in 2011, but Dever initially developed the idea for the book in 1999. [2] He decided to write "Jackass Investing" to systematically refute major investment myths. He believes that most investment professionals preach similar "myths" that prohibit investors from creating truly diversified portfolios.

Dever introduces the concept of "return drivers" and explains how to use them to create trading strategies, which are the components necessary to create a truly diversified portfolio. [3] A return driver is the core underlying reason that drives the price of a market. [1]

The Myths

The "myths" include the following:

Related Research Articles

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<span class="mw-page-title-main">Speculation</span> Engaging in risky financial transactions

In finance, speculation is the purchase of an asset with the hope that it will become more valuable shortly. It can also refer to short sales in which the speculator hopes for a decline in value.

Investment is traditionally defined as the "commitment of resources to achieve later benefits". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broader viewpoint, an investment can be defined as "to tailor the pattern of expenditure and receipt of resources to optimise the desirable patterns of these flows". When expenditures and receipts are defined in terms of money, then the net monetary receipt in a time period is termed cash flow, while money received in a series of several time periods is termed cash flow stream.

An index fund is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that it can replicate the performance ("track") of a specified basket of underlying investments. While index providers often emphasize that they are for-profit organizations, index providers have the ability to act as "reluctant regulators" when determining which companies are suitable for an index. Those rules may include tracking prominent indices like the S&P 500 or the Dow Jones Industrial Average or implementation rules, such as tax-management, tracking error minimization, large block trading or patient/flexible trading strategies that allow for greater tracking error but lower market impact costs. Index funds may also have rules that screen for social and sustainable criteria.

<span class="mw-page-title-main">Day trading</span> Buying and selling financial instruments within the same trading day

Day trading is a form of speculation in securities in which a trader buys and sells a financial instrument within the same trading day, so that all positions are closed before the market closes for the trading day to avoid unmanageable risks and negative price gaps between one day's close and the next day's price at the open. Traders who trade in this capacity are generally classified as speculators. Day trading contrasts with the long-term trades underlying buy-and-hold and value investing strategies. Day trading may require fast trade execution, sometimes as fast as milli-seconds in scalping, therefore direct-access day trading software is often needed.

A hedge is an investment position intended to offset potential losses or gains that may be incurred by a companion investment. A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded funds, insurance, forward contracts, swaps, options, gambles, many types of over-the-counter and derivative products, and futures contracts.

Long/short equity is an investment strategy generally associated with hedge funds. It involves buying equities that are expected to increase in value and selling short equities that are expected to decrease in value. This is different from the risk reversal strategies where investors will simultaneously buy a call option and sell a put option to simulate being long in a stock.

<span class="mw-page-title-main">Stock trader</span> Person or company involved in trading equity securities

A stock trader or equity trader or share trader, also called a stock investor, is a person or company involved in trading equity securities and attempting to profit from the purchase and sale of those securities. Stock traders may be an investor, agent, hedger, arbitrageur, speculator, or stockbroker. Such equity trading in large publicly traded companies may be through a stock exchange. Stock shares in smaller public companies may be bought and sold in over-the-counter (OTC) markets or in some instances in equity crowdfunding platforms.

In finance, a trading strategy is a fixed plan that is designed to achieve a profitable return by going long or short in markets.

<span class="mw-page-title-main">Commodities Corporation</span> US financial services company

Commodities Corporation was a financial services company, based in Princeton, New Jersey, that traded actively across various commodities. The firm was noted as one of the leading commodity and futures trading firms. CC is credited for launching the careers of many notable hedge fund investors and for its influence on global macro investing.

Lawrence D. Hite is a hedge fund manager who, along with Ed Seykota, is one of the forefathers of system trading. He is the author of the book, The Rule: How I Beat the Odds in the Markets and in Life—and How You Can Too, which was named a Wall Street Journal, LA Times, and Porchlight Books bestseller.

Trend following or trend trading is a trading strategy according to which one should buy an asset when its price trend goes up, and sell when its trend goes down, expecting price movements to continue.

Amaranth Advisors LLC was an American multi-strategy hedge fund founded by Nicholas M. Maounis and headquartered in Greenwich, Connecticut. At its peak, the firm had up to $9.2 billion in assets under management before collapsing in September 2006, after losing in excess of $6 billion on natural gas futures. Amaranth Advisors collapse is one of the biggest hedge fund collapses in history and at the time (2006) largest known trading losses.

<span class="mw-page-title-main">Michael Covel</span>

Michael W. Covel is an American author, entrepreneur, and film director. In 1996, he co-founded TurtleTrader.com, later expanded into TrendFollowing.com, a popular online resource focused on investment style known as trend following, which allows investors to profit in both up and down markets.

<span class="mw-page-title-main">Roy Niederhoffer</span> American hedge fund manager (born 1966)

Roy Gary Niederhoffer is an American hedge fund manager. He graduated from Harvard College magna cum laude in 1987, with a BA in computational neuroscience.

Systematic trading is a way of defining trade goals, risk controls and rules that can make investment and trading decisions in a methodical way.

Peter F. Borish is chairman and CEO of Computer Trading Corporation (CTC), an investment and advisory firm. Borish sits on the board of CIBC Bank USA. He is also a Partner of Quantrarian Asset Management and sits on the board of Laconic, a carbon data and management platform.

A managed futures account (MFA) or managed futures fund (MFF) is a type of alternative investment in the US in which trading in the futures markets is managed by another person or entity, rather than the fund's owner. Managed futures accounts include, but are not limited to, commodity pools. These funds are operated by commodity trading advisors (CTAs) or commodity pool operators (CPOs), who are generally regulated in the United States by the Commodity Futures Trading Commission and the National Futures Association. As of June 2016, the assets under management held by managed futures accounts totaled $340 billion.

<span class="mw-page-title-main">Michael Dever</span>

Michael Dever is an American businessman, futures trader, and author. Dever is the founder and CEO of Brandywine Asset Management, Inc., an investment management firm founded in 1982, and he is the author of the investment book "Jackass Investing: Don't do it. Profit from it."

<span class="mw-page-title-main">Brandywine Asset Management</span>

Brandywine Asset Management, Inc. is an American investment management firm founded and managed by Michael Dever. The firm is registered as a commodity trading advisor.

References

  1. 1 2 3 "Author of "Jackass Investing" employs the multi-strategy systematic model he preaches". Opalesque's Emerging Manager Monitor. Opalesque. May 2012.
  2. 1 2 "Your Investments: Top fund manager shares some tips". The Jerusalem Post. November 17, 2011.
  3. 1 2 3 "Jackass Investing: Don't do it. Profit from it". Futures Magazine. July 11, 2011. Archived from the original on December 15, 2012. Retrieved February 14, 2013.
  4. Jay, Marley. "Contrarian investor Mike Dever shared with us 2 vital lessons he learned from his highly profitable association with legendary trader Paul Tudor Jones". Business Insider. Retrieved 2023-09-19.
  5. "From rural Pennsylvania, Brandywine takes on the world". Automated Trader. Fourth Quarter 2012. Archived from the original on 2018-09-11. Retrieved 2013-02-14.
  6. "Getting Along with Your MOM ('Manager of Managers')". Financial Trader. 4 (5).
  7. "Myth: Largest Investors Hold All the Cards". ai-CIO.com. Asset International. January 16, 2013. Archived from the original on January 20, 2013. Retrieved February 14, 2013.