[HOWTOINVEST] Buying Darwins on a dip

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FXforfun

Member
64 96
Well, I would pick THA, SYO - it's kind of a bottom, and UYZ that it's kind of a top. I don't know if there are some other similar Darwins. But these 3 could make a hell of portfolio. I wouldn't care if they are on top or bottom. Too bad I'm not a financial advisor :)
 
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CavaliereVerde

Experienced member
1,524 1,953
An easy portfolio that would not work very long.
THA is mostly at full capacity.
UYZ has a conservative cap at 700k, IMO it is pessimistic but even with 2M capacity will be filled soon.
My 10 darwins portfolio is going strong but it took me a lot of time to collect all the hidden gems. ;)
 

CavaliereVerde

Experienced member
1,524 1,953
I dont' like aggressive marketing and usually it is a bad sign but here we were speaking about the smartness/dumbness of investors, and it is beyond doubt that these ones are dumb.
It is diffcult to pick bottoms but but it is superstupid to buy after a lucky year at +30-40%
Maybe he is a good trader but the picture is lucky and incomplete.
 
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TrungLN

Active member
240 359
@Gargamel @CavaliereVerde
To show more evidence that enter a Darwin in normal DD is better than in the newer high. I suggest doing a test, a checking in the history of all outstanding Darwin. So, we can compare the profit/loss between these 2 entry method. Of course, enter in new high is applied in Darwin IA, and you already shown that it's not profitable.
 

Gargamel

Active member
244 465
@TrungLN My posts 11,23 and 24 in this thread are all that smart investor needs regarding entering on DD.Post 11 contains links to blog of one of the best traders at Darwinex,who is also educated,smart person.He did very good statistical analysis on this problem.Use google translate to read his blog posts.I am more 'common sense ' variety of analyst and I came to the same conclusion and strategy as him.
About psychological aspects of entering on High or DD I wrote everything that is needed,but it is scattered in many posts...
Unfortunately there will always be unscrupulous traders and impatient investors suggesting entering on highs is OK.When DD gets serious,they become silent and/or start panicking.For example provider of SUG was very aggressive in this and previous forum about entering on highs,but anybody entering now or more than a year ago in his darwin would be in the same spot.Well,not quite so:investor entering a year earlier would have paid taxes on profits that have evaporated since then,performance and management fees and suffered a bit of Divergence(that depends on each individual darwin-some are really problematic).
Sug1.png

Early investor,buying on highs a year ago when that darwin was hot,winning Darwinia and promoted would have what red line indicates(even less than that if you count taxes,but that depends how people are taxed in their countries...). Patient investor would start now and have what grey line indicates.

There is also opportunity cost:money invested in darwin during DD will start profiting very soon,while same money invested on Highs can spend 1 year earning nothing if darwin goes into DD .DD and climbing out of it can take 6-12 months easily.
My post 55 in thread Alternatives to Darwinex has a table of 50 elite traders(2019) on eToro investment platform:half of them were 12 or more months from their ATM(all time high). Such are realities about Draw-downs.
 
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