Who Loses $5 Billion In Less Than A Month?

My wife and I unloaded an oil exploration company position we held recently for rebalancing purposes. If you have no sell discipline, no rebalancing feature in your game plan, then you are not an investor.

Americans are day trading their retirement accounts, exchanging Exxon for Ford. THE AMERICAN CAR INDUSTRY IS DONE. OKAY? OKAY?

At work, I am still wondering why a client put in an order to buy $80,000 worth of Ford stock, after selling Exxon. Just because a stock trades near the price of the local paper, it doesn't mean that it is a bargain! Ford announces that they are cutting their dividend, their bonds tank, they are having job cuts and this degenerate, thinks he Warren Buffet. "Oh, before you put the order in, what's it at now...?"

But the biggest bloodbath is reserved for the 32 year old Connecticut hedge fund master, Brian Hunter, who managed to lose a colossal $5 billion since the start of September by making risky bets on natural gas prices, according to MSN. I am glad I don't have to send out that statement! Hedge fund managers always win because of the fees they charge. Hunter took home around $75 million in compensation last year, so telling his investors that they lost $5 billion won't be very painful for him.

If you want to learn something about risk and reward, google Harry Markowitz and the "efficient frontier" of portfolio theory.