Alpha Theory Founder and President, Cameron Hight, will be featured on Fox Business News’ “Countdown to the Closing Bell” on Wednesday, December 31st at 3:40pm EST. He will be discussing a two step approach to making better portfolio decisions in 2009.
Step 1: Before making any investment, force yourself to write down your potential profit if your thesis is correct, loss if you are incorrect and the probability of each.
Step 2: Use those numbers to calculate a basic risk-adjusted return. The math is easy and a calculator can be found on our website: www.AlphaTheory.com/calculator.
A risk-adjusted return becomes your tool to ensure that you are making a rational decision instead of relying on mental calculation and heuristics.
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