Skewness

My 100th post on this desolate wasteland of a blog.

The concept of skewness can be thrown in with the cliche bunch "easy to learn, hard to master". It is important because it is the pitfall of every losing investor. On the micro level, people aren't as stupid and everyone portrays. Random retail investors, such as myself, probably do a decent job of picking winners. The problem is when we come across a loser. Like our first love, we just can't come to terms with letting go. This creates negative skewness in our portfolio position returns. It is why successful investors and traders commonly preach to cut losses short, no more than 10% if possible, at all times. That way you defeat negative skewness.

I've been learning to count cards a bit so I can put up a fight at the blackjack tables, it's the same mindset walking into a casino and logging in to your brokerage account. Something to keep in mind.