Friday 6 May 2011
Understanding Our Emotions
Some people invest like Warren Buffett, calm and easy; others invest like a bull dog, simply “hit” whenever they listen to any rumours. Sad to say that, not everyone is fit to invest in the stock market. Majority of the investors plunge in by emotions at the wrong time and bail out by emotions at the wrong time. In general, stock market preys on fear and greed, and it’s not designed to reward the masses. Warren Buffett said, “Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.”Let’s take a look at the following common mental mistakes, and see if you can handle them well:
1. Herd MentalityWe see this trait in the animal kingdom, such as a school of fish, a flock of birds, and a herd of sheep. Like the animals, we feel comfortable in doing things together – if more and more people are buying a particular stock, most likely we will follow suit if we happen to have some money in our pockets. The way to profit from this phenomenon is to resist the herd mentality and try to be a leader. In any crowd, or group behaviour situation, the ones that lead are the ones that draw all the benefits, while the ones that follow blindly are the ones that take all the risks.
2. Gambling Behaviour and SpeculationIt is believed that gambling behaviour and speculation are part of our human basic trait. Statistics showed that 1.1% of men and 0.5% of women are “probably compulsive gamblers”. In general, speculators often dictated by factors such as tips and rumours to take advantage in the stock market. This behaviour is usually unpredictable, short term and unwarranted.I would strongly advise genuine investors to avoid following the crowd blindly as it is always double edged situation – either huge profit or heavy losses.
3. Greed and FearThere are two cardinal sins: Greed and Fear, which are inherent in human beings. For instance, we bought some stocks and we are starting to make profits. Assuming we made a 50% profits in a particular stock, our greed will tell us not to sell, as we are hoping the price to go higher. However, it didn’t, instead it fell back to the original price. One month later, the price moved up by 10%, and our fears kicked in, spurring us to take profits. So without a proper strategy plan, we are blinded by our own emotions and instincts that prevented us from making the right decision.Hence, we should never let our emotions cloud our trading judgment. What we can do is to turn the crowd’s fear and greed to our advantage! To exploit the market psychology, we must act in a contrarian way when the crowd falls prey to their emotions.
4. OverconfidenceOverconfidence can cause investors to underestimate risks when investing in stocks. Studies have proved that investors who have recently earned high returns will tend to take more risks in their future investment (in stocks.) I’ve seen many of my friends who fall prey to this emotion. They initially made tens of thousands of dollars. However, due to overconfidence, they invested more heavily than before and they even tolerated with much higher PE ratios. As a result, they give away the gains back to the stock market!So, if you happen to have more than two of the above common mental mistakes, please put your money into reputable unit trust funds where you have professional portfolio managers to invest for you.
1. Herd MentalityWe see this trait in the animal kingdom, such as a school of fish, a flock of birds, and a herd of sheep. Like the animals, we feel comfortable in doing things together – if more and more people are buying a particular stock, most likely we will follow suit if we happen to have some money in our pockets. The way to profit from this phenomenon is to resist the herd mentality and try to be a leader. In any crowd, or group behaviour situation, the ones that lead are the ones that draw all the benefits, while the ones that follow blindly are the ones that take all the risks.
2. Gambling Behaviour and SpeculationIt is believed that gambling behaviour and speculation are part of our human basic trait. Statistics showed that 1.1% of men and 0.5% of women are “probably compulsive gamblers”. In general, speculators often dictated by factors such as tips and rumours to take advantage in the stock market. This behaviour is usually unpredictable, short term and unwarranted.I would strongly advise genuine investors to avoid following the crowd blindly as it is always double edged situation – either huge profit or heavy losses.
3. Greed and FearThere are two cardinal sins: Greed and Fear, which are inherent in human beings. For instance, we bought some stocks and we are starting to make profits. Assuming we made a 50% profits in a particular stock, our greed will tell us not to sell, as we are hoping the price to go higher. However, it didn’t, instead it fell back to the original price. One month later, the price moved up by 10%, and our fears kicked in, spurring us to take profits. So without a proper strategy plan, we are blinded by our own emotions and instincts that prevented us from making the right decision.Hence, we should never let our emotions cloud our trading judgment. What we can do is to turn the crowd’s fear and greed to our advantage! To exploit the market psychology, we must act in a contrarian way when the crowd falls prey to their emotions.
4. OverconfidenceOverconfidence can cause investors to underestimate risks when investing in stocks. Studies have proved that investors who have recently earned high returns will tend to take more risks in their future investment (in stocks.) I’ve seen many of my friends who fall prey to this emotion. They initially made tens of thousands of dollars. However, due to overconfidence, they invested more heavily than before and they even tolerated with much higher PE ratios. As a result, they give away the gains back to the stock market!So, if you happen to have more than two of the above common mental mistakes, please put your money into reputable unit trust funds where you have professional portfolio managers to invest for you.
Investor act like crisis never happened
Investor act like crisis never happened
Investor act like (2000-2003) and (2007-2009) crisis never happened. Investor have very short memories and the major economies of the world are not as strong as the market world have us believe. But investor should be very careful in this very crowed trade. During market rally the investors buying the stocks as it there was no tomorrow, thought it was a good oppurtunity to gain in this bullish market.
Do you know how much money was lost in the world-wide markets in 2007-08? That total was estimated at twenty-one trillion dollars (Credit Suisse Global Investment Returns Yearbook 2009). But shouldn't the real question be: WHY was so much lost?
Market conditions turned severely bearish in 2007 and stock markets began an historic decline not seen in generations.
Most investors just hunkered down, hoping to ride out the storm. What they didn't understand though, was their investments were NOT positioned to withstand the ferocity of a full-blown bear market.
When the sell-off struck, millions of investors’ dreams of wealth, retirement and security were crushed. Retirement accounts were reduced to half in a matter of months.
"I wonder where markets are going?"
No matter whether you are a long term investor, a swing trader, or even a day-trader,..Successful investing is can often be counter- intuitive to how most investors want to trade.
You see, an average stock investor will only enter a position once they "feel" comfortable with the idea that stock markets (or their stock) are likely to keep rising. Unfortunately, that's usually the time for FUND is getting ready sell.
To compound the problem, investors frequently end up selling in a panic after markets have moved substantially lower. Again, that's usually the time when institutional traders are getting ready to buy.
That behavior is the reason why investors keep complaining, "How come stocks always seem to go down whenever I get in...or go up when I finally get out?" Don't take it too personally, it's really a basic problem of human nature.
Everyone wants to feel sure about their decisions, and because of that, wait until they feel safe before taking action. The need for feeling sure is so powerful in fact, you'd almost have to be psychopathic to act against that impulse.
In the booming 90's, you could have picked almost any stock and watched it climb for what seemed like forever. But "forever" came to a screeching halt in the bear market of 2000. Since then, even the stocks of well managed companies have become subject to more wild, short-term swings, triggered by broader market volatility.
Blame it on computerized trading, hedge fund trading, or changes in trading regulations, but the fact that huge volumes of stock can be executed in a matter of seconds can have a dramatic impact on the markets.
That volume comes mostly from institutional traders, who control as much as 70% of the daily market volume. But that volume also becomes an institutional trader's liability...
Think about it. Fund managers cannot simply push a button and freely move millions of shares of stock without also unbalancing markets against themselves. In order to unload or accumulate positions, institutional traders are often forced to allocate trades over days and sometimes weeks in order to keep prices from moving too far from their target range.
It's that potential imbalance issue which will become your trading advantage.
Imagine what you could do, by knowing ahead of time, when big money is about to change direction. What if you also knew how long their wave of buying or selling would last?
With that kind of market foresight, all you would need to do is position yourself in direction of their upcoming trades, and let their following massive volume do all the heavy lifting for you!!!
Disciplines And Strategies In Share Market
A single Strategy is not nearly enough. You need several Strategies. A single Discipline is not enough. You need a variety of Disciplines. You must develop your disciplines around flexibility. The market changes constantly. Its biases change. At one time it favors momentum investors, and at another time it hammers them. Your rules for buying and selling must be adaptive. If you develop disciplines that are adaptive to the varying whims of the market, and your strategies are suitable to the prevailing market climate, you will prosper. Consistent profitability in the market is not about how you "feel," or about the fact that a company has a great "story" and that its stock should go up. Emotions have no place in the equation. Study to learn tactics and tactical considerations. For example, what are the implications of a "hanging man" candlestick formation after a long uptrend? What tactics are worth considering in the placement of rising stop-losses relative to a rising trendline for a volatile stock as compared to a less volatile stock? Remember that there is either a person or a computer on the other side of every trade you make. That person or thing is betting that you are wrong. What tactical difference would it make in the placement of your stop-loss if a stock's pattern suggests the stock is frequently "gunned" near the trendline? A stock is "gunned" if a specialist sees a group of sell orders (perhaps stop-losses) just below a trendline and he forces the stock down by dumping some shares in order to buy up the shares offered for sale at the lower price so he can resell them later at a higher price. This is more likely to happen if the stop loss orders for those shares are set too close to the stock's current price. If this is a pattern for a particular stock, how would you approach the problem? What tactics do you use to buy breakout stocks? Do you buy on the breakout, wait for a pullback, or wait for a pullback and bounce? Even though it takes time, work, and some losses to develope your skills as a trader, you will find that it can be a very interesting and even a fun way to make a living. Think of it as the world's largest computer game. The money in your account is how you keep score. Even a beginner can hold his own if he is careful. There are a lot of people in the market who have no discipline, strategy, or self-protection systems. Protect your portfolio with a good stop-loss system. Do your homework. If you do these two things, you will be way ahead of most of the people in the market.
Discipline implies "teach" & "train." You are not disciplined if you do not study to learn from your mistakes and modify your behavior accordingly. Discipline means to govern. You have no discipline until you learn to govern your emotions. Discipline can involve chastening. The market will do that for you if you do not exercise the other meanings of the word. If you are disciplined, you will regulate your behavior so that you do not deviate from your planned procedures. A Disciplined investor or trader will combine lessons the market has attempted to teach him with lessons gleaned from his past behavior to provide self-generated tutorials that will lead to success-generating behavior.
Strategy suggests at least a general plan. However, to be a consistent winner (which does not mean always winning) you need more than simply a generalized plan. Successful stock market strategies are more complex than that. You need a detailed blueprint that is designed to gain you an advantage over other participants in the market. "Strategy" involves adapting means to desired ends. To this end, real strategies must incorporate at least some general rules of behavior. Think of your strategy as the skeleton of your enterprise. Think of your "system" as the organs, muscle, and ligaments of your enterprise. Your strategy maps out the general structure of your endeavor. Your system gives life to it.
A "system" is more defined than a strategy. That is, a system has many subsets of rules that address various contingencies. Like the ligaments of the body, these subsets work in concert with each other to support the goals of the enterprise. However, "system" often implies more than a set of rules. The term may be expanded to include external support systems. That is, the word may include the set of rules, tools, indicators, and formulas that tell the trader what market actions to take. Top traders learn the rules of their system like a student of karate practices his katas (combinations of positions and movements) so that they become automatic responses in a combat situation. Similarly, all the rules of your system must be learned so that your behavior becomes automatic. Otherwise, the danger is that emotion will overrun your rules. A so-called "system" without contingency rules is not a real system in the sense of being a money-making blueprint. Without a system to give life to your strategy, your strategy is dead.
Discipline, Strategy, and System These three are the triumvirate that will lead you to success in the market. Your overall "strategy" will be made up of various sub-strategies that define your general approaches to investing under various market conditions. Will you look for breakouts, gaps, surges, use stop losses, or sell short? Your system consists of the set of rules and procedures you will follow to carry out your strategy (an example would be the set of rules in R.C. Allen’s triple moving average system). The meaning of "discipline" can also envelop the whole package or overall structural matrix of your enterprise. However, for our purposes here, we will define discipline to be what holds your system and strategies together. It is the persistence, care, and accuracy with which you implement your set of rules. Without discipline, you will not follow your own rules because the market will defeat you psychologically. Without the correct implementation of your system, you really are not in possession of an effectual strategy. You may have a strategy of buying stocks that have certain behavioral characteristics. However, no strategy is fail-proof and all people make mistakes. Effective systems deal with possible failures. At any given time, there should be a well-defined answer to the question, "How will you deal with each type of failure that could occur if you take that position?"
Discipline implies "teach" & "train." You are not disciplined if you do not study to learn from your mistakes and modify your behavior accordingly. Discipline means to govern. You have no discipline until you learn to govern your emotions. Discipline can involve chastening. The market will do that for you if you do not exercise the other meanings of the word. If you are disciplined, you will regulate your behavior so that you do not deviate from your planned procedures. A Disciplined investor or trader will combine lessons the market has attempted to teach him with lessons gleaned from his past behavior to provide self-generated tutorials that will lead to success-generating behavior.
Strategy suggests at least a general plan. However, to be a consistent winner (which does not mean always winning) you need more than simply a generalized plan. Successful stock market strategies are more complex than that. You need a detailed blueprint that is designed to gain you an advantage over other participants in the market. "Strategy" involves adapting means to desired ends. To this end, real strategies must incorporate at least some general rules of behavior. Think of your strategy as the skeleton of your enterprise. Think of your "system" as the organs, muscle, and ligaments of your enterprise. Your strategy maps out the general structure of your endeavor. Your system gives life to it.
A "system" is more defined than a strategy. That is, a system has many subsets of rules that address various contingencies. Like the ligaments of the body, these subsets work in concert with each other to support the goals of the enterprise. However, "system" often implies more than a set of rules. The term may be expanded to include external support systems. That is, the word may include the set of rules, tools, indicators, and formulas that tell the trader what market actions to take. Top traders learn the rules of their system like a student of karate practices his katas (combinations of positions and movements) so that they become automatic responses in a combat situation. Similarly, all the rules of your system must be learned so that your behavior becomes automatic. Otherwise, the danger is that emotion will overrun your rules. A so-called "system" without contingency rules is not a real system in the sense of being a money-making blueprint. Without a system to give life to your strategy, your strategy is dead.
Discipline, Strategy, and System These three are the triumvirate that will lead you to success in the market. Your overall "strategy" will be made up of various sub-strategies that define your general approaches to investing under various market conditions. Will you look for breakouts, gaps, surges, use stop losses, or sell short? Your system consists of the set of rules and procedures you will follow to carry out your strategy (an example would be the set of rules in R.C. Allen’s triple moving average system). The meaning of "discipline" can also envelop the whole package or overall structural matrix of your enterprise. However, for our purposes here, we will define discipline to be what holds your system and strategies together. It is the persistence, care, and accuracy with which you implement your set of rules. Without discipline, you will not follow your own rules because the market will defeat you psychologically. Without the correct implementation of your system, you really are not in possession of an effectual strategy. You may have a strategy of buying stocks that have certain behavioral characteristics. However, no strategy is fail-proof and all people make mistakes. Effective systems deal with possible failures. At any given time, there should be a well-defined answer to the question, "How will you deal with each type of failure that could occur if you take that position?"
Rule Of Investing Long-Term
1. Always limit your losses.
2.Sell only the losers and let the winners ride.
3. Avoid buying stocks based on hot tips.- you should realise that nothing is free and nothing is ever for sure.
4. Do not rely too much on P/E ratio.
5. Do not try to time the market.- Leave the task to the so-called technical analysts who try to beat the market in short run.
6. Do not wait for the market to correct itself.
7. Price is irrelevant.-What is more important is its potential to rise.-you should not pass a chance to buy a stock because you think the price is too high and you can afford only a few lots. On the other hand, you should not buy heavily the so-called penny or low priced stocks because you think they are too cheap and you can afford to buy many lots.
8. Do not try to find the intrinsic value of a stock.-recognises the quality of a stock before the others are aware of it.
9. Do not fall in love with a stock.
10. Value is not equivalent to price.- buy the stock when it is selling at a bargain price, regardless of its true value.
2.Sell only the losers and let the winners ride.
3. Avoid buying stocks based on hot tips.- you should realise that nothing is free and nothing is ever for sure.
4. Do not rely too much on P/E ratio.
5. Do not try to time the market.- Leave the task to the so-called technical analysts who try to beat the market in short run.
6. Do not wait for the market to correct itself.
7. Price is irrelevant.-What is more important is its potential to rise.-you should not pass a chance to buy a stock because you think the price is too high and you can afford only a few lots. On the other hand, you should not buy heavily the so-called penny or low priced stocks because you think they are too cheap and you can afford to buy many lots.
8. Do not try to find the intrinsic value of a stock.-recognises the quality of a stock before the others are aware of it.
9. Do not fall in love with a stock.
10. Value is not equivalent to price.- buy the stock when it is selling at a bargain price, regardless of its true value.
Overconfidence/effect In Share Market
It is human nature for us to overestimate our abilities and become overconfident. Studies show that investors are often overconfident when it comes to their ability to predict market direction. Oddly enough, this is something that happens more often among novice investors. Compared to experienced investors, those who are new to the market tend to set higher return expectations and end up being overwhelmed by the unfavourable outcome. As a result of overconfidence, some investors tend to trade too frequently only to get unsatisfactory returns or worse yet, losses. With the convenience of online trading, some even quit their full time jobs to dabble in day trading, thinking that they have the ability to predict the market and earn fast money. These are the people that usually end up getting burned if they do so without proper understanding of what they have been buying and selling, especially when the market is highly volatile.
Understanding The Stock Market
A finance professor and a student who came across a $100 bill lying on the
ground. The student went to pick it up, the professor said, “Don’t bother – if it
were really a $100 bill, it wouldn't be there.”
This is the essence of Efficient Market Hypothesis where it says that investors
cannot make any exceptional profits through fundamental and technical analysis.
Because if there is any, it would be quickly taken by professional market players
in the market. However, in Malaysia and the rest of the world, our stock markets
are not completely “efficient” yet. We are at the stage of semi-strong form to
strong form market efficient.
So, fundamental and technical analysis CAN be rewarding to investors if they
really do their homework well.
The Stock Market Cycle
Next, we must learn how to look at the big picture of the stock market. Like any
other business cycles, the stock market has its own cycles as well.
It is not difficult to understand the concept of a stock market cycle. Just remember
this: “What goes down must come up; and what goes up must come down!” The
stock market cycle has four stages namely:
• Stage 1 The Trough,
• Stage 2 The Expansion
• Stage 3 The Peak, and
• Stage 4 The Contraction
A winning investor should understand how a normal stock market cycle operates
over the time. Particular attention should be paid to recent cycles. Usually, a bull
trend (the uptrend from stage 1 to stage 3) would last for about 9 to 18 months. A
bear trend (the down trend from stage 3 to stage 1) would last approximately 6 to
12 months.
Is The Market Cycle Self-Fulfilling?
Many market gurus have used cyclical analysis over the years to predict
forthcoming crashes and bull markets. As believers of these prediction gathers
momentum, market cycles can become very much self-fulfilling.
For example in the US, the Dow Jones Index often form lows during October. This
is the month when some of the historical stock market crashes occurred and so
people become more prone to overreact on bad news at this time in the market
cycle. They sell in anticipation of history repeating itself, thus causing the market
to move downward.
Even Warren Buffett said, “An investor should act as though he had a lifetime
decision card with just twenty punches on it.” If we have a lifetime of 75 years
and we started stock investing at 25, it simply means that we invest in the stock
market every two years!
Do not try to “get rich quick”. You’re bound to make mistakes! We must wait for
the best investment opportunity to come. If you think the stocks are too
expensive (with high PE ratios), just stay out of it. Look at the big picture: what
goes up must come down; and what comes down must go up. Be careful when
the market is over bullish, and treat every economic recession as a golden
opportunity to accumulate blue chip stocks
ground. The student went to pick it up, the professor said, “Don’t bother – if it
were really a $100 bill, it wouldn't be there.”
This is the essence of Efficient Market Hypothesis where it says that investors
cannot make any exceptional profits through fundamental and technical analysis.
Because if there is any, it would be quickly taken by professional market players
in the market. However, in Malaysia and the rest of the world, our stock markets
are not completely “efficient” yet. We are at the stage of semi-strong form to
strong form market efficient.
So, fundamental and technical analysis CAN be rewarding to investors if they
really do their homework well.
The Stock Market Cycle
Next, we must learn how to look at the big picture of the stock market. Like any
other business cycles, the stock market has its own cycles as well.
It is not difficult to understand the concept of a stock market cycle. Just remember
this: “What goes down must come up; and what goes up must come down!” The
stock market cycle has four stages namely:
• Stage 1 The Trough,
• Stage 2 The Expansion
• Stage 3 The Peak, and
• Stage 4 The Contraction
A winning investor should understand how a normal stock market cycle operates
over the time. Particular attention should be paid to recent cycles. Usually, a bull
trend (the uptrend from stage 1 to stage 3) would last for about 9 to 18 months. A
bear trend (the down trend from stage 3 to stage 1) would last approximately 6 to
12 months.
Is The Market Cycle Self-Fulfilling?
Many market gurus have used cyclical analysis over the years to predict
forthcoming crashes and bull markets. As believers of these prediction gathers
momentum, market cycles can become very much self-fulfilling.
For example in the US, the Dow Jones Index often form lows during October. This
is the month when some of the historical stock market crashes occurred and so
people become more prone to overreact on bad news at this time in the market
cycle. They sell in anticipation of history repeating itself, thus causing the market
to move downward.
Even Warren Buffett said, “An investor should act as though he had a lifetime
decision card with just twenty punches on it.” If we have a lifetime of 75 years
and we started stock investing at 25, it simply means that we invest in the stock
market every two years!
Do not try to “get rich quick”. You’re bound to make mistakes! We must wait for
the best investment opportunity to come. If you think the stocks are too
expensive (with high PE ratios), just stay out of it. Look at the big picture: what
goes up must come down; and what comes down must go up. Be careful when
the market is over bullish, and treat every economic recession as a golden
opportunity to accumulate blue chip stocks
KLCI may fall to 1474 again?
I have warning you it's time for you to sell all your stocks since last 2 weeks. How accurate? Its pure base on my trading decision and not rumours. In my memory, In May 2010, our local stock market, FBMKLCI, corrected 7.5% in one month. To add insult to injury, we experienced the euro debt problems and the infamous Flash Crash on 6 May 2010.
This year i make a same decision i clear all my position before May because of inflation and Japane crisis, I am sure this Quarter result may report a poor profit due to that impact. And another thing is Dow hit a triple high which may make a correction in any time btw our klci the volume keep reducing, is a signal of correction soon since last 2 weeks.
Foreign fund also leaving since last month and the last transaction they are buying is begining of month April. From the foreign fund flow chart the % of share holding is reducing so. Rising liquidity, rotational interest in various sectors.......bla bla bla..., Due to many many more reason i make a decision i Stay Sideline.
Buiter also warned that authorities in emerging economies such as China,
India and Brazil could be falling behind the curve in policy tightening
to tackle inflation.
India and Brazil could be falling behind the curve in policy tightening
to tackle inflation.
Thursday 28 April 2011
Volume In Trading
Other than actual stock prices, trading volume is one of the most closely watched measures of stock-market health. Volume is both a number - a measure of market liquidity based on the number of shares that change hands each day - and an indicator - demonstrating just how much confidence traders have (or don't have) in a particular market trend.
Larger-than-normal volume is viewed as a sign that traders are confident in the market trend at hand. Movement on low volume is seen as an indicator of a trend that's unlikely to continue.
Unfortunately, the perception is much better than the reality. And thanks to three key factors - high-frequency trading (HFT), the proliferation of exchange-traded funds (ETFs) and active-arbitrage trading - current stock-market volume is far worse than investors even imagine.
(HFT) conducted by proprietary trading desks at big banks and private hedge funds accounted for 70% of equity trading volume.
The massive proliferation of (ETFs) that have become so popular with retail investors is also a major cause of the misleading stock-market volume statistics. And not because they are traded by investors, but because they are traded by a handful of privileged "INSIDERS."
In addition to HFT share volume, active increases daily volume when these insiders buy and sell the underlying securities that make up ETF portfolios against their simultaneous trading of the actual ETF shares.
How these active traders increase volume and what that means for markets is important.
Whether or not the conventional wisdom - that markets that rally on thin volume are dangerous - will be proven correct by any meaningful downturn remains to be seen.
Larger-than-normal volume is viewed as a sign that traders are confident in the market trend at hand. Movement on low volume is seen as an indicator of a trend that's unlikely to continue.
Unfortunately, the perception is much better than the reality. And thanks to three key factors - high-frequency trading (HFT), the proliferation of exchange-traded funds (ETFs) and active-arbitrage trading - current stock-market volume is far worse than investors even imagine.
(HFT) conducted by proprietary trading desks at big banks and private hedge funds accounted for 70% of equity trading volume.
The massive proliferation of (ETFs) that have become so popular with retail investors is also a major cause of the misleading stock-market volume statistics. And not because they are traded by investors, but because they are traded by a handful of privileged "INSIDERS."
In addition to HFT share volume, active increases daily volume when these insiders buy and sell the underlying securities that make up ETF portfolios against their simultaneous trading of the actual ETF shares.
How these active traders increase volume and what that means for markets is important.
Whether or not the conventional wisdom - that markets that rally on thin volume are dangerous - will be proven correct by any meaningful downturn remains to be seen.
Saturday 23 April 2011
Bursa Malaysia
(b) 1,500,000 Bursa shares are held directly by EPF Board.
Acquired | 400,000 | ||
Acquired | 1,200,000 |
Wednesday 20 April 2011
人生
"" For one thing, as long as we do our best, we should feel very, very satisfied, regardless of the outcome.""
Saturday 16 April 2011
Everyday is not a trading day.
In my Trading Journal, I note daily observations, particularly related to my ability to execute my trading plan.
“Everyday is not a trading day.” Only trade when the sector, market, and the correlating stocks are in trend.When there is no trend, stand aside in trading range markets. Only trade when the probabilities are in your favor, and let the market come to you. Be patient and make time your friend instead of your enemy.
The most successful traders and aggressive investors learn from their mistakes. Unfortunately a large number of people are doomed to make the same mistakes over and over again. This behavior is usually a sign of emotional reactions to price momentum and the absence of any well thought out strategy.
Winning traders-The trading objectives are perfectly clear, and truly believe that will achieve these goals. If you have the belief that you will win, you increase your chances of trading to win. In order to have this level of conviction, you must have a thoroughly tested plan. You also must have a clear vision of how you will
proceed with your plan in order to reach your goal. The more you can visualize your goals being achieved, the more you will strengthen your internal belief and confidence that you will reach your goals.discard negative emotions that can hurt my trading results....to be continued.
Friday 15 April 2011
People to be available in middle-aged Training.
No one asked the poor in the road, the rich live in a distant mountains. "also leave him a close relative or"friend", snobbish people living to do, is grab a handful of casually. At low tide, and the plight of your life when Reaching out to you that your hands warm is your friend. do not believe that when you are rich and sweet - false; because the dog hat look after the children will confuse you.
Tuesday 12 April 2011
Investing Strategies
Technical analysis (TA) as a standalone approach is a topic covered in great detail on a number of worthwhile sites. For us, TA will only be considered as an enhancement to our fundamental investing style – primarily as momentum. We will focus on investing strategies based on fundamental analysis.
Fundamental investing styles include growth investing, value investing, and dividend (income) investing.
However, there is no single best investment strategy. There is agreement that you should not have all your eggs in one “style” basket. This means you will need more than one strategy.
It is a question of emphasis in the form of allocation. The consensus is that the closer to retirement you are, the more conservative you should be in your style allocation. This means a larger focus on value and dividend investing.
This is not because value and dividend investing have superior returns, but because they have less risk. In other words, you are less likely to have a large swing in your capital when you are more likely to need it.
Many of the strategies used to illustrate stock screening have both a value and a growth component.
One of the most overlooked aspects of choosing a stock investment strategy is the historical performance of the strategy. Knowing what has happened in the past is no guarantee that it will continue. But it does provide parameters to assess the current performance of the strategy. The historical performance of a strategy is most often assessed by back-testing. When possible, the historical performance of a benchmark is based on the actual price history of the benchmark.
Investing is a process and, like any process, can only be improved by taking a systematic approach that is repeatable and measurable. This is the real basis for stock screening. A measurable, repeatable process allows the performance of a strategy to be evaluated and compared against both expected performance and benchmark performance..... to be continued
“sell in May and go away”.
RELAX
When it comes to timing the market, the “best six months” is a clear winner for ease of use. It is based on stock market cycles and ties in nicely with the “sell in May and go away”.buy the share at the beginning of November. At the end of April, you sell. The idea of market cycles that repeat around the same time of year. They’re often called seasonal or calendar cycles.
These cycles can be used in buying stocks and even rolling stocks on a long term basis. However they are probably most well documented in commodity markets, especially the agricultural commodities.
Stock market research has shown that these calendar cycles can be applied beyond commodities to any business that has a regular seasonality to it, whether it be retail, travel, financial, etc.
Like many things in stock market research, these market cycles aren’t as simple as buying or selling at the same time every year. They provide opportunities to look at the market in question, and the analyze it. But sometimes news may come out that a time of year that is normally strong for your market is going to be weaker than expected, and so it may actually turn into a shorting opportunity.
And just to make things even more challenging, sometimes normal calendar cycles don’t occur as they have for years and years before.
It simply means that you should consider them as only one part of the probability scenario in your total trading plan. And they can be a very important and powerful part of that plan.
To observe the performance of the base strategy, we can use monthly historical : read more.. http://finance.yahoo.com/q/hp?s=%5EGSPC&a=10&b=1&c=1957&d=09&e=31&f=2006&g=m
KLCI chart 12 April 2011
Sunday 10 April 2011
Sarawak Election?
A: Make sure you vote right...
B: Wait---my right or your right?
“If BN returned strongly in Sarawak, that will send a very strong signal and the market should rally.” If it (BN) does win with equal or greater number of seats, it should strengthen the possibility of a general election this year with greater optimism of regaining some lost grounds. Either way, it should be positive for the market,” he stressed further.Reiterating further, Govindan said selection for top picks would be mainly from overweight sectors that included banking, plantation, telecommunications, gaming, O&G, construction, property and gloves. The head researcher was, however, neutral on power, technology, transport, consumer and automotive sectors.
One by one, he said the banking sector would reap the benefit from the still ‘healthy’ consumer and business demand for loans, thriving capital market, as well as it being the prime beneficiary of the Economic Transformation Programme (ETP) due to funding needs.
“Meanwhile, plantation will benefit from high crude palm oil (CPO) prices that are likely to average RM3,400 per tonne for the year, due to robust ‘supply-and-demand’ dynamics and speculative flavour as hard and soft commodities are benefitting from the ample liquidity in the global financial system – thanks to various quantitative measures and bailouts in the US and Europe.
“Telco and gaming will ride on robust consumer demand and higher foreign earnings contribution. The ‘twin’ construction and property will reap the benefit from domestic expansion, while glove manufacturers are expected to make a comeback with potential easing in latex prices and strong demand,” he explained.
Technical Indicators???
The best strategy in my opinion is to take one indicator you think may be useful and study it THOUROUGHLY. Only when you have a deep and complete understanding of exactly what an indicator is telling you can you assess whether it's of significant value to you or not. If you find yourself asking the advice of others about it then you probably won't be able to use it properly anyway.
What I'm saying essentially is that there are no shortcuts. One thing that all successful traders seem to have in common is that they develop there own systems based on their own unique understanding. That can only come from hard work and experience. One traders opinion of the value of any piece of information is of limited value to others because no two of us trade in an identical way.
__________________
There is no 'you' that is experiencing the world, the world is experiencing itself and 'you' is part of the content of the experience.
Try to predict what will happen on the right hand edge of the chart.
Secondly you need to determine the timescales you are interested in the style of trader. Are you going to hold positions for seconds, minutes, days, weeks, months or years ?
Then decide on your style of trading - do you want to look for trends in the market and follow those ? Do you want to look for swings, predicting what the cycles are (possibily within longer term trends) ? Are you looking for breakouts ?
Don't use an indicator without really understanding how its formula works.
Cup & handle pattern
Saturday 9 April 2011
许冠杰与张国荣 - 沉默是金 (粤语)
Looking back on the night wind stern independence Cheng pulls the old things 
沉默是金杰：夜风凛凛 独回望旧事前尘
是以往的我 充满怒愤
诬告与指责积压着满肚气不愤
对谣言反应 甚为着紧
荣：受了教训 得了书经的指引
现已看得透 不再自困
但觉有分数
不再像以往那般笨
抹泪痕轻快笑着行
合：冥冥中都早注定你富或贫
是错永不对真永是真
任你怎说安守我本份
始终相信沉默是金
杰：是非有公理 慎言莫冒犯别人
荣：遇上冷风雨休太认真
杰：自信满心里 休理会讽刺与质问
合：笑骂由人 洒脱地做人
************
荣：受了教训 得了书经的指引
现已看得透 不再自困
杰：但觉有分数
不再像以往那般笨
抹泪痕轻快笑着行
合：冥冥中都早注定你富或贫
是错永不对真永是真
任你怎说安守我本份
始终相信沉默是金
荣：是非有公理 慎言莫冒犯别人
杰：遇上冷风雨休太认真
荣：自信满心里 休理会讽刺与质问
合：笑骂由人 洒脱地做人
合：少年人 洒脱地做人
合：继续行 洒脱地做人
是以往的我 充满怒愤
诬告与指责积压着满肚气不愤
对谣言反应 甚为着紧
荣：受了教训 得了书经的指引
现已看得透 不再自困
但觉有分数
不再像以往那般笨
抹泪痕轻快笑着行
合：冥冥中都早注定你富或贫
是错永不对真永是真
任你怎说安守我本份
始终相信沉默是金
杰：是非有公理 慎言莫冒犯别人
荣：遇上冷风雨休太认真
杰：自信满心里 休理会讽刺与质问
合：笑骂由人 洒脱地做人
************
荣：受了教训 得了书经的指引
现已看得透 不再自困
杰：但觉有分数
不再像以往那般笨
抹泪痕轻快笑着行
合：冥冥中都早注定你富或贫
是错永不对真永是真
任你怎说安守我本份
始终相信沉默是金
荣：是非有公理 慎言莫冒犯别人
杰：遇上冷风雨休太认真
荣：自信满心里 休理会讽刺与质问
合：笑骂由人 洒脱地做人
合：少年人 洒脱地做人
合：继续行 洒脱地做人
Fair?
A king, took a monkey for a pet. He kept him constantly close at hand for his amusement.
It goes without saying that the monkey, fed on the various dishes that the king gave him, grew large and was given respect by all who surrounded the king. Indeed, the king, due to his love and exceeding trust of the monkey, even gave him a sword to carry.
In the vicinity of the palace the king had a grove artfully planted with many trees of various sorts. Overcome by love, he entered the grove with his favorite wife. He ordered all his servants to wait for him at the entrance.
After having pleasantly strolling through and observing the grove, he grew tired and said to his monkey, "I want to sleep a little while in this arbor of flowers. Take care that nothing disturbs me!" Having said this, the king fell asleep.
Presently a bee, pursuing the aroma of the flowers, betel, and musk, flew up and lit on his head. Seeing this, the monkey thought angrily, "What is this? Am I to allow this common creature to bite the king before my very eyes?"
With that he proceeded to drive it away. However, in spite of the monkey's defense, the bee approached the king again and again. Finally, blinded by anger, the monkey drew his sword and struck down the bee with a single blow. However, the same blow also split the king's head.
The queen, who was sleeping next to the king jumped up in terror. Seeing the crime, she said, "Oh, oh, you foolish monkey! What have you done to the king who placed such trust in you?"..
The monkey explained how it had happened, but thereafter he was shunned and scorned by everyone.
Fair or not fair?
TT: Where there is life there is hope ignore how people say....five years later was a hero!!you live for yourselves, not others!
I don't care how silly it is...
When You Get Loss Amount In Share Market..
Today, the stock market fall, I also suddenly dropped 10%, held the money gone! It seems only hold-up and
the mood is bad!
Gal: You go away.
Guy: ( Try to persuade her holding a bunch of fresh flowers) See What I brought you?
Gal: I got no mood today, I make a huge losses in my trading.......
Guy:......................Bad luck today.....yesterday she is so good mood and so happy, today she is so sad and bad mood....Huh.....I got to pray hard make sure she gain in share market else i will get suffer!!!
Stock investors may have this feeling: When the rose market appears, usually more exciting mood, chasing the enthusiasm is high. But in many cases, investors chase into the future, they find themselves at a high level of the quilt. In contrast, when faced with market slump, investors are generally the mood is fear, have thrown sell into flesh, but looked back, I realize I cut the stock to the floor, which is what they often That the human weakness of greed and fear reflected in the stock market.
During A Bull Run The Stock Market
In this bullish market, I make huge $$$ so buy you a real diamond..I love you, Honey!!
During a bull run the stock market has more buyers than sellers. Expectedly, stock prices zoom up. Expecting the bull run to continue, more and more investors enter the market, fuelling an even greater price rise and this cycle gets repeated.Riding the bull wave, stock prices of fundamentally weak stocks also start to go up. Driven by unrealistic expectations, these unsustainable prices soon start to tumble and the bubble eventually bursts.
At times, investors know that the stock they are investing in is fundamentally weak but they are still willing to invest in the stock, because they feel that some greater fools could be depended on to invest in the stock after they have and this would give them handsome returns on their investments.
'mental accounting', defined as 'the inclination to categorise and treat money differently depending on where it comes from, where it is kept and how it is spent.'
Research in Behavioural Economics shows that gamblers who lose their winnings typically feel they haven't lost anything. The fact though remains that they would have been richer had they stopped playing while they had won enough.
Investors during a bull run tend to behave similarly. Once they have got a certain return on their investment they tend to plough all their returns back into the market. When such money goes into fundamentally weak stocks, investment essentially boils down to speculation.
Investors in general, and especially during a bull run, tend to look at the recent past pattern and assume that the future patterns will be identical to the past ones. This is as good as driving a car looking in to the rear view mirror.
A rear view mirror-driven car will not meet with an accident as long as the road ahead of the car is exactly as it is behind the car. This is rarely the case, both on roads as well as in the stock markets. But, when the stock market is on an upswing, the more investors tend to believe that it will keep going up forever.
They mistake probability for certainty. They pump in more money into the stock market and this always does not go into the right stocks.
Marketing research has shown that the typical Indian buyer's decision is heavily influenced by the actions of his acquaintances, neighbours or relatives. Psychologically, the desire to conform to the behaviour and opinions of others, a fundamental human trait, is what drives such buying behaviour.
So if everybody around is investing in the stock market, the tendency for potential investors is to do the same. Like sheep in a herd, investors in a bull run find it cozy to be inside the herd rather than outside it.
Investors are human, after all. So, the lure of quick wealth is difficult to resist. During a bull run, stock markets offer astonishing returns in a short period of time as compared to other investments. This helps in attracting more money into the stock market.
'There is nothing so disturbing to one's well being and judgement as to see a friend get rich.'
This leads to more people entering the stock market without really understanding the market.
Investors should remember that bubbles are caused by excess cash coming into a particular investment theme.
Thus, investors during a bull run need to be careful and not put all their eggs in one basket. They need to spread their investment across stocks and if possible stay invested in other assets as well.
How To Read The News In Share Market?
BigFish: 12am Mid night... We change our plan....get new judgement...so that we can $$$$$$$...
News : What? just only i cut it shooting up. Not your fault, its my own fault because my understanding is poor dont know how to read the news, and cant differentiate which is real which is fault. This few days it happened to few company. MAA? bad news the company price it going up.. good news the company price it going down..?
How To Make Money In The Stock Market...
Look, right now is not a good time for wishful thinking. I don't know if this selling of the past few days would really even be categorized as heavy, compared to other negative moments I can remember in my memory. I do know, that we were talking about the correction and describing it more than a month ago when ci hit as lower at 1474 on 28 February 2011. That since the rally had lasted so long, somewhere between a 5% and 15% pullback would be reasonable and likely.
(Of course, it is much easier to talk about it than live through it).
I am telling you this, not to show how smart you and I are,The truth is, there is a balance in the universe. Things happen, and they aren't good or bad. They are neutral with good and bad aspects to them......
We said any correction or pullback in market prices would have to be accompanied by news that was very upsetting. People just don't sell without a story. At least, the media do not report selling without a story. But remember, we knew there would be selling, and we knew there would be a story to go when it. We just didn't know what that story would be.
We knew this selling episode was coming, and we knew what it would look like. So how can anyone say that the market action is caused by the events in the news? There are always good and bad events in the news.
Most great up moves in the stock market start gradually. They also start with short covering. So, none of the disclaimers that the "experts" use to discount the rally actually mean anything. The question is, now that we have had a little buying and prices are moving up a little, do the higher prices on relatively low volume stop there; or does demand actually strengthen now?
Most amateur investors, in fact, most investors of all kinds, don't have any way to read what is happening in the stock market, and so they are left having to guess or base their actions on what they think SHOULD be happening or what they WISH WAS HAPPENING.
Market-Based Decision Making - Aggregating Good Judgement
- When a small number of traders exercising bad judgement "bet it all" on a wrong decision, and there is insufficient liquidity for the rest of the market to effectively disagree.
- When inaccurate or incomplete information is available, and the market does not provide sufficient incentives for traders to do their own research to "fill in the gaps".
- When misleading information is available, causing the majority of traders to make a wrong decision, while only a small number, through luck or analysis, make the right decision.4.
- If the market accurately predicts, or over-predicts the performance of an over-performing account manager, he or she may receive no bonus.
- On the other hand, if the market under-predicts the performance of an under-performing account manager, he or she may receive a large bonus.
Buy what also lau sai? Than you are in the ''Bore Frustrated'' condition and showing your brain is BLANK in white color.
Fitters Company News
C) ???? $$$$$$$$$$$$$$$$$$$$$$$$$$$$$ is hero!
My Teacher Is Playing The Share Market?
A for affin bank
B for bursa
C for cypark remember kids not car park is cypark..ya
D for DRB
E for ECM
G for Gamuda
H for HL bank tell your mother because teacher bought HL-ca so now get fat
K for Kencana
M for mahsing and MHB
P for pchem
O for QL
R for Ramunia
S for Sapcress
U for Uemland
That's all for today, good back do your own homework..
Mr. Market Wrong?
MUM) You know what? You still young, I am chatting because I want to get the tips from the chatters...theirs tips very CHUN!!! ........oooooooh, i love them.
BB) But you chat until no time to cook, I have been drinking milk a few calls eat the meal.
During Bear Market Time - Do not look down on people.
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