Mr Beerver has a Problem
OK, so another month has come round and Mr Beerver has another 100$ to invest… which he dumps into DFGEX again at 10.32$.
Now then, Mr Beerver has a rather serious problem. He’s supposed to be a believable college student who, with self-discipline and a good basic understanding of finance can achieve all of his goals. He’s supposed to represent an attainable image of what a college student could do with the right attitude and some fortitude.
The problem is that he is not in any way realistic and his performance is not easily replicable using a simple investing formula.
His handling of ISCO presents the problem clearly.
He identified a good company at a good price and bought in at 0.15. Being a bit of a cowboy, he went ALL IN! This is foolish by any standard.
Then, with a bit of luck and amazingly good timing, he got out near the highs at 0.22 and 0.23, making an absolutely outsized profit. Now however, still less than a year after his initial purchase, the stock is at 0.07 and may well go lower… even down to the 0.01 range if the court rules against ISCO in the next couple of weeks.
This is not the way any sensible college student would invest. This is fly-by-your-pants lunacy powered by high-volatility and requires way more extra study and thinking time than students actually have.
While I’ll continue posting about Mr Beever’s adventures, one of my main arguments, namely that any average person with a modicum of research and a strong investment model can perform well, has been shot down by the fact that Mr Beerver’s returns have NOT been based on his allocation of assets but rather based on his trading luck.
Food for thought and something I’ll be considering over the summer.