I’ve thought about how to write this for a while. When do you decide that ‘enough is enough’ and you have to make the choice between remaining with your tipster, or walking away?
We’ve discussed in the past regarding ‘sticking with tipsters’ and ‘the tipster loop’ but at what point should you walk away?
At the core; I do believe this is a very personal decision, however, I do have my own personal rules that help decide when to continue and when to amicably walk away.
- How deep in a drawdown is the tipster? My allowance for the tipsters drawdown depends on a number of factors:
- What average odds is the tipster using? I will give a tipster who has average odds of 7, much much more leeway than I will of say, an average odds of 1.9
- What is the highest historical drawdown of a tipster? Have they experienced a run like this before?
- What is the longest the portfolio has taken to recover to a profitable position from historic losing streaks? (AKA: How long are you going to continue paying the tipster to get your money back?) *Remember: You should be incorporating all sub costs into the P&L returns of a portfolio*
- Can another portfolio you have (we should be varied in our portfolio’s, right?) do a better job of recovering the lost money? *This does not entirely mean severing ties, just allowing a better performing portfolio to ‘pick up the slack’ while your other portfolio weathers the storm.
- Lastly: How verbal is your tipster? Are they open with how they feel the portfolio is doing? Excuses on bad performance or reassurance they are looking at why it is under performing? *It is my humble opinion that a tipster should be incredibly verbose during a bad patch – DG and OP both do an exceptional job at this. When you are doing bad; I want reassurance, not excuses.
All of the above should be taken into account when we decide what to do about a poorly performing tipster. The decision should never be taken lightly – if you do walk away, you may walk straight into another poorly performing tipster, repeat until you are bankrupt.
The reason people fail to make money from investment gambling (or gambling in general) is lack of discipline. Develop that and the world is your oyster.
Whatever you do. If your tipster is having a bad time, please don’t get abusive / shout / post shit. They know they’re doing poor, they don’t need you being a cock, to remind them of it.
- Horse sticking its tongue out: Pxhere