JWDD035-POS JWDD035-Vince February 10, 2007 22:20 Char Count= 0
Postscript
I
n the long run, the probability of hitting a drawdown (of any given mag-
nitude) approaches 1, approaches certainty, as you continue to trade
(i.e., asqincreases).
This is not hard to see intuitively. If you can only die by being struck
by lightning, eventually, you will die by being struck by lightning. Trading,
like getting out of bed in the morning, flirts with disaster. I may not like
this—but that’s how it works, and therefore, usually, the best thing to do in
life is nothing at all.
It’s also the hardest thing to do.
Being aware of the risks isenlightenment,not a curse. Knowing that the
sun will burn out someday is not a bad thing to know. Knowing that driving
at 80 km/hour will cause 16 times the impact as driving one-fourth that
speed is beneficial to know, in that enlightenment allows us to better assess
those risks we wish to take.RALPHVINCE