Your Questions About Successful Trading Business

George asks…

Can a highly intelligent individual significantly beat the market trading?

Assume somebody with an unusually high iq and a substantial understanding of gambling mathematics, finance, and economics.

Assume this individual would be working with total capital of approximately $100k and would work from his home office.

Assume this individual could devote several hours per day if necessary.

Realistically, is there a reasonable way this individual could master getting in and out of investments in a way that leads to a significantly higher return than the general market?

I am pretty well versed in the efficient market hypothesis, and I generally think that short-term trading is little more than flipping coins with transaction costs. But there clearly are entire firms set up that apparently make money trading the market, and there are individuals who do make significant income trading. These successful traders are likely like any business person who found a profitable niche: they do all they can to not publicize how they’re making money.

Thanks.

John answers:

Contrary to most of the others who have answered before me, I think that you have to be a complete idiot to lose money in the stock market. The only way that I can see, that people lose money, is because they panic, or they do things which are really, really, stupid. You’ll never go broke betting on the stupidity of others. I only have a tenth grade education, but I make a good living in the stock market, by simply letting really “intelligent” people, give me money.

Sharon asks…

selling a business help?

My dad is self employed and is getting to the point of retiring. He runs a very successful business and is always in demand. I’m trying to find out if it’s possible for him to sell his business. The problem is that aside from a few tools and stock he doesnt have any assets or an office or staff or anything. So essentially what he would be selling is his large customer database, his phone number and the name he trades under so the reputation he’s built up. Is this even possible? If anyone has any experience i would be very happy to hear it. i have checked on google but the advice i found related to selling big businesses! thanks so much for your help

John answers:

This is called the goodwill of the company. It’s common to sell that. Try and sell before next April. Taper relief tax, currently 10%, if you own the company for more than 2 years. Is going up 80% to 18%.

Donald asks…

I trade with IG Index, I have made £3000 this month, where do they get the money to pay me?

I mean, what if I made a successful trade profit of £100,000. where does that money come from? their own business running capital?

John answers:

IG Index is spread betting. I.e. Like a bookmaker. They make their money from people who lose.

Sandra asks…

I have a business idea, but there is no fashion merchandising school near me. What can I do?

I have a degree in marketing and ran a very successful business for five years before selling to my ex. I moved to a small town to be near my aging parents. I want to open a store that sells JEANS, and maybe a few accessories. I would like for the store to carry all the best brands, a signature line, low-end to high end and everything in between.

I’m wondering if I can do this without fashion merchandising experience? Or, would I just end up losing a ton of money? Start up capital is not an issue, but I’m worried I wouldn’t be able to get the brands I want, or know what trade shows to go to, etc.

Anyone have any advice? The nearest school is a 3.5 hour drive and I’m unsure of online schools, which are reputable and which are not, etc. Any advice appreciated.

John answers:

Post your idea for a business to sites like www.ideablob.com where the community can give you advice and find some people to help. There is also www.mysomeday.com which just launched and may help.
I also would recommend attending meetup events. One site (www.meetup.com) could put you in touch with groups of fashion people to help you find the right people to ask/work with. Another new venture that just started up and is helping entrepreneurs like you is bloblive.com. You present your idea at an event and people from online/audience give you feedback/advice. Best of luck!

Daniel asks…

Would it be worth making complaints about unsubstantiated/fraudulent homeopathic claims to Trading Standards?

I’m thinking of going round the “Alternative (to) Medicine” shops, and noting some of the unsubstantiated claims made, then reporting them for false advertising or fraud. Has anyone ever done this? Is it likely to be successful?

[Trading Standards is something we have in the UK. Their aim is to prosecute fraudulent & dishonest businesses]
old cat lady: how many logical fallacies do you think you committed in that statement?
Hi purplepinkanddots: I plan to find shops which make claims that the homeopathic treatments they sell can cure people (no scientific evidence exists to support these claims). So that is the fraud – making money by selling medical treatments which have not been shown to work.
cat lady: http://www.nizkor.org/features/fallacies/appeal-to-authority.html

Instead of providing evidence to back up your argument, you are saying:

“This person is an expert, he believes it so it must be true”

A logical fallacy, displaying the weakness of your position.

John answers:

There’s no point in doing it really. The medical industry already has a lot of people on their payroll to that specific thing, and teaches doctors to do it in school, so there’s about as much pressure as possible already. I know in America doctors have been sucessfully sued for saying ___ is bad for you and should be avoided, even though ___ is later proven to be a deadly carcinogen. So, really, if you want to do it, all the power to you, but it doesn’t serve any practical purpose except letting you get a rise out of harassing an alt med practitioner.

Homeopathy not working is not a fact, it’s a belief, much the same way allopathic medicine working is not a fact, rather it’s a belief. If you look at either objectively, there isn’t definitive proof either statement is true. There are lots of surgeries and drugs zealously prescribed which do nothing positive for their patients but cost lots of money (ie. Spinal fusions).
The entire topic (what forms of medicine “work”) exists within the realm of belief rather than fact (although to be fair science has a tendency to purport it’s subjective viewpoint as fact which makes this concept difficult to understand for a traditional scientist). If you want to force your believes on others and persecute them for believing otherwise, go right ahead. People have been doing it from the dawn of time.

Truthfully though, what are you asking for. Advertisers to only make truthful claims to sell their products? That’s about the same as wanting the sky to turn red. To my knowledge the only place that’s been carried out is in cuba because Castro flat out banned all advertisement (although to be fair his approach does have pros for it).

One of the most effective forms of advertisment is word of mouth, and alternative health practices have done as well as they have not because of ‘things on labels or adversting campaigns’ but rather word of mouth from people they worked for (wheras the medical industry tries to do the exact opposite). If your goal is to shut the alt med community down, going after labeling is somewhat pointless, it’s not where their support lies. On the otherhand, if you are trying to crusade for public health, I think it would be much more productive to focus on toxic things being sold conventionally rather than alternative remedies that may do “nothing”.
Who would you feel worse for? A guy who spent his life savings on a drug that killed him, or a guy that spent 20 bucks on something that just gave him a placebo effect.

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