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Dangerous Influences, What influences Trading/ Investment Decisions?
arty
post Posted: Jun 2 2013, 06:41 PM
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In Reply To: wolverine's post @ Jun 2 2013, 06:11 PM

QUOTE
Yielding stocks that have recently been sold off in the chase for growth might be a way to park money. Stocks like TLS and banks with an eye to some tech levels to help time an entry/exit is what I am doing.

+1
Plus some added precaution: Recognising when the reason for a position taken proves no longer valid and then stopping out.
That's got sfa to do with t/a or f/a, and everything to do with capital management.



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I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
wolverine
post Posted: Jun 2 2013, 06:11 PM
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In Reply To: OZGAZ's post @ Jun 2 2013, 05:21 PM

Yielding stocks that have recently been sold off in the chase for growth might be a way to park money. Stocks like TLS and banks with an eye to some tech levels to help time an entry/exit is what I am doing.



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TOO MANY CHIEFS

NOT ENOUGH INDIANS

Said 'Thanks' for this post: arty  OZGAZ  
 
OZGAZ
post Posted: Jun 2 2013, 05:21 PM
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Not sure if this is the right thread but I will pose the question anyway and appreciate any feedback....as I/O, coal, gold and many commodities seem to be on the nose atm, and also oil be in oversupply...where are people parking their money...in other words, what is supposedly 'hot' at this point in time ???

Cheers

Ozgaz



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Smile while TRADING it's only money... :)
 
triage
post Posted: Jun 1 2013, 09:37 AM
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As most anyone who has followed my posts over the years on ss would have realised by now when it comes to investing despite my best efforts I am the bloke at the poker table who cannot work out who the fool is (as the saying goes there is at least one fool at every poker table and if you cannot figure who that is then most probably it is you). Mind you, research suggests that 80% of investors fit that bill so at least I'm not lonely. But I certainly don't claim to have many answers.

And I have no interest in getting caught up in the great TA v FA wars that have scarred the ss landscape for years now. If your current investing style works for you then great.

What I do continue to do is to try to cut through all the noise and guff and myth that surrounds making investment decisions. And here is a classic "theory" that sounds impressive but actually adds little actionable value: the Hindenburg omen.

Yes folks it's back. This thing happens rarely enough not to become obviously flawed but often enough for its reappearance to be readily recognised.

It gets a mention by Joe Weisenthal, at business insider, who seems to have lots of e-column inches to fill each day so will run with whatever pops up on his screen.

http://au.businessinsider.com/the-hindenbu...appeared-2013-5

And of course zerohedge uses its re-emergence as a justification for their fifth or sixth prediction of the end of the financial world for the day.

http://www.zerohedge.com/news/2013-05-31/s...g-omen-sighting

But Barry Ritholtz has for some time now gone to lengths to show that the Hindenburg Omen is slightly less telling than a coin toss in predicting what happens in the next month or so of trading. It may well portend a market crash this time, but just as likely it will be yet one more false positive.

http://www.ritholtz.com/blog/2011/03/hinde...t-a-fork-in-it/



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog

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flower
post Posted: Aug 30 2010, 09:31 AM
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In Reply To: mistagear's post @ Aug 29 2010, 08:24 PM

Why would you pass up an opportunity to aquire more shares for free ???
Why do you sit doing nothing when there are regular opportunities to pro-actively manage your hard earned dollar$ invested to..
.. both protect capital as well as profits gained to date and
add more shares for free and lowering your actual cost per share ???
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Hi mistagear---please expand your question.



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Combining Fundamental comments with Fundamental charts.
 
mistagear
post Posted: Aug 29 2010, 10:51 PM
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NS,

my answer here to your CDU post,

QUOTE
http://www.sharescene.com/index.php?showuser=4912

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In Reply To: NightStalker's post @ Today, 08:53 PM
Sorry - I know I said we should stop here, but just by way of a quick example, to follow up:

Say I buy 100,000 shares in XYZ for 7 cents = $7000

Now say they're worth $10 (obviously talking about PDN here) = $1 million

Now I sell them, but have to pay 50% in CGT - I come away with $500,000

Now the shares pull back to just over $6, and at $7 I decide the bounce is real and to buy back in, but now 100,000 shares would cost me $700,000.

So - I end up with the same number of shares I had, but I've paid the taxman $500,000 plus another $700,000 to buy the shares. So I'm $200,000 down on when the shares were at $10, but still only have the same number of shares....

Wouldn't that be somewhat dumb? When I could have kept the shares that had cost me $7,000, bought some more at $7 - say another 5,000 shares - and ended up with 105,000 shares at an average cost of 40 cents each. And pay no CGT.

That's what I meant when I said the profit isn't real unless you sell and crystalize the gain. You don't trigger a capital gain event unless you sell (or a capital loss).

Now I know the examples above use hypothetical numbers, but they equate pretty well with the history of PDN - $7 was after it had bottomed out and we could be pretty sure it was heading back up until the next drop. In fact it went back up to over $9 at the time. And these events have been repeated several times since.

Which set of sums makes the most sense for LONG term investors?



Because after tax paid you have today $500,000 in cash or shares and with your method you have $185,500 after tax.

You cant take the tax into account in one example and ignore it on the other.
You keep stating that you cant pick tops or bottoms, but if you are a trader as you say, you must think you have some ability in capturing some of the swings. Apparently you are making money and paying tax to be able to add more shares as your unbooked profits continue to fall in your long term position.
Sure you will say that the buy back would not have taken place last Friday, however if you took time to repeat the process several times during turns in the market, the resulting difference in net would have been even greater .

I appologise for making an example of one of your trades, I did try to make it a general question relating to method rather than a specific trade.
I thank you for contributing and being as open as you have, although I still fail to see any logic in this common method used by many investors.

Regards, M



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mistagear
post Posted: Aug 29 2010, 08:24 PM
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In Reply To: flower's post @ Aug 29 2010, 08:12 PM

Flower


I guess you missed my questions and seeing as you are even answering questions not asked, I transferred below....
.
.
.

If you decide a company is worthy of a long term hold in your portfolio and you have real $s invested in buying that Co's shares


Please, please, please answer this

Why would you pass up an opportunity to aquire more shares for free ???
Why do you sit doing nothing when there are regular opportunities to pro-actively manage your hard earned dollar$ invested to..
.. both protect capital as well as profits gained to date and
add more shares for free and lowering your actual cost per share ???

I find this normally accepted practice by investors totally without logic .

If you can give me a logical explanation, I would very grateful

Regards,Mistagear



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[url="http://xgamesbowling.com"]X Games Bowling[/url]
Bear Cottage is the first children's hospice in NSW.

It is a place where children with terminal illnesses and their families can stay from time to time and receive rest and medical care in a home-like environment.

Please support >>> Bear Cottage for Kids,
An initiative of the Children's Hospital at Westmead NSW
http://www.bearcottage.chw.edu.au/

................................................................
www.xgamesbowling.com
 
flower
post Posted: Aug 29 2010, 08:12 PM
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In Reply To: arty's post @ Aug 29 2010, 06:45 PM

Hi arty, transferred here because the direction the CDU thread was taking didn't seem appropriate, this seemed the suitable place.

Averaging down: dont promote it as its the individuals own concern, do suggest that in certain stocks, if it suits your individual overall plan, and you have the underlying company fundamentals correct and it fits your risk/reward profile then go for it.

Building Bottom Drawers:
Would I become a seed capitalist in another TAP if the opportunity presented itself? Yes
Would I buy CVN again at 7c and hold: Yes
Would I go into another NMS IPO if it appeared: Yes
Would I take direct equity in another oil well: Yes
Three were simply excellent and highly profitable bottom drawer liners which balanced the odd disaster most of us suffer.

Not caring how low an investment might have fallen:
Of course I care--

What might I do as a consequence:
Totally rebalance the entirety, re dividing the sum between longer term holds and shorter term trading opportunites as world market conditions change.



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Combining Fundamental comments with Fundamental charts.
 
arty
post Posted: Aug 29 2010, 06:45 PM
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In Reply To: flower's post @ Aug 29 2010, 06:33 PM

Thanks for your concern, flower;

So it is your opinion then that the promotion of averaging down, building bigger bottom drawers, and not caring about how low one's investments have fallen falls into the category of "Dangerous Influences".

Elated to find that Mistagear, mpl, and others seem to have penetrated some misguided convictions.

PS: Pooh! I was hoping too soon and against better judgment. So, you merely transferred my post over here, so you could bang on the same old drum. Doesn't make it any more logical though.



--------------------
I trade daily, but I am not a licensed adviser. Whether you find my ideas reasonable or not: The only person responsible for your actions is YOU.
I follow two rules: (1) There are no sacred truths. All assumptions must be critically examined. Arguments from authority are worthless. (2) Whatever is inconsistent with observed facts must be discarded or revised. We must understand the Market as it is and not confuse how it is with how we wish it to be. (inspired by Carl Sagan)
 
flower
post Posted: Aug 29 2010, 06:33 PM
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Have taken the liberty in transferring arty's post in the CDU thread to this thread.

Am sure we all have a trading plan, the purpose of which must be to generate an acceptable annual return on capital--that return may be as low as 10%--or as hight as 40% (for instance), my point being (apart from the general point that very few people have similiar overall requirements plus posessing very different abilities) surely it doesnt matter how he/she obtains that return?

Maybe some never achieve their plan, some over achieve in one year, underachieve the next, am relatively sure most participants would be well aware on a daily basis of what their capital is acheiving/not achieving for them and their exact capital position, and take appropraite steps to alter course when able.
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Good point, Mista,

Maybe that's where we're going wrong: Maybe the "investor types" don't view their dollar$ as "hard earned". Maybe they inherited the lot or won in a lottery much more than they need. Then it could make sense to buy a bigger bottom drawer every time one of their speculations on a future multi-bagger turns pear-shaped, is sold down by some predator, and/or taken over for a song.

As regards "paying an accountant to check those things" - why should any accountant jeopardise a client account by telling the client what we try to explain here? The client might become upset and look for another accountant angry.gif
You and I don't have such problems; we can keep promoting prudent capital management - some newbies may actually be spared big losses; a few "sot-in-their-ways" investors may even reassess their strategy - remember Dr Phil's "How's it workin' for ya?" He too has some success, somtimes, when he makes people realise the errors of their firmly-held convictions. So, there is still some hope. hypocrite.gif



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Combining Fundamental comments with Fundamental charts.
 
 


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