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Ola posted:While I agree with the gist of your post, this sentiment seems weird to me. When is the market rational? When everyone agrees that everything should go up and it does? If I had money invested in things I couldn't control, I would be worried about its value decreasing further and I would seriously consider selling. That's a rational decision, isn't it? It's "buy low and sell high", not "buy asap and hold forever" right? Lets be honest, FB's current revenue model is going to need to change dramatically before they can live up to expectations, and that factor alone is fraught with risk. Nevermind the macro risks involved in taking a long bet on a minimally profitable company when the Euro may potentially collapse and the U.S. economy shows signs of slowing. I think there is a lot of potential for FB, but the fact the company is being valued without any appearance of compensating buyers for their risk is troubling. I am far from an expert, but the valuation/PE of FB (if it holds) seems to indicate the market is buying into the idea that this is a new subclass of assets within tech that are not exchangeable with other internet companies like GOOG and AAPL since they have different core competencies. It's only if you consider this to be true that you can value a company primarily on metrics like eyeballs that can be turned into a new, untapped form of revenue. The last time around we saw companies IPO based upon eyeballs and potential revenue (and again, lets face it, FB advertising is not the killer revenue model) it did not turn out well. nebby fucked around with this message at 05:56 on May 20, 2012 |
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May 20, 2012 05:53
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Ola posted:Yet clearly, demonstrably and provably measured, everything doesn't always go up all the time. Movements in discount rates are a different matter, but in theory most corporations do not pay all of their free cash flow out in the form of dividends or share repurchases. That cash either builds up or is used to purchase additional capital assets which will hopefully produce more cash flow in future. That is why one would commonly expect prices to go up even though the prospects of the company are not actually improving. You wouldn't expect prices to go up by more than that just because the company is earning the money it was expected to earn.
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May 20, 2012 06:02
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Ola posted:A market going up is "strong" and "solid", a market going down is "weak" and "volatile". Why can't there be weak and volatile upward trends and strong, solid downward trends? Volatile means just that could go up could go down it's unpredictable. We have had upward volatility many times over. The reason you can't have weak upward trends is because gains being what they are can't be weak in an economic term. Look at it this way. You lent a friend rent money never expecting to see it again because he has a 450 credit score and can't even afford groceries. A year later he pays you back. This money is now valued in the present monetary amount (always lower than the past). It was volatile because who knew what was going to happen and weak because you got less money than you lent him. Same scenario only this one has a 800 credit score and a 6 figure income. Likely he'll pay you back quickly and with interest. Now it's a strong play because he'll pay you back most likely. It's still volatile though because there's no contract or guarantee he will. Yes this means the market is always volatile it's just the degree of volatility that varies.
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May 20, 2012 06:04
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I completely agree with you nebby, I was just exploring what rationality might be in the context of economy. To me FB seems extremely overpriced and I base that opinion not on my own rationality alone but also on many much more knowledgeable people saying it first. But that doesn't mean FBs share price will inevitably go down tomorrow. I think it will, but I don't know for sure. Predicting share prices is not a science, it's tea leaves and pig's entrails with academic language. I was on FB just now and I clicked a picture of a dog that someone had shared. This is what it lead me to:  The ads on the right are, top to bottom: 1. A mobile provider asking me if I'm excited about the new Galaxy SIII. 2. A classical music club promising me info about classical music if I click "like". 3. A board-style game which wants me to play it, yet it warns me it's addictive. 4. A crime novel club promising me three crime books and some headphones. I suppose they expect some money in addition to my "Like". 5. A contractor promising free survey and price offers for my asphalt projects. In the middle, the dog picture I wanted to look at is obscured by sexy singles. The setup to the image macro joke is obscured by a Like-bar. This experience is valued at over One Hundred Billion Dollars.
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May 20, 2012 06:29
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Hobologist posted:Movements in discount rates are a different matter, but in theory most corporations do not pay all of their free cash flow out in the form of dividends or share repurchases. That cash either builds up or is used to purchase additional capital assets which will hopefully produce more cash flow in future. That is why one would commonly expect prices to go up even though the prospects of the company are not actually improving. You wouldn't expect prices to go up by more than that just because the company is earning the money it was expected to earn. This entire theory seems to assume a company is constant in its value creation. Some companies seize to exist between Wednesday close and Thursday open. Some markets peter out, some rocket upwards. You can't predict the future. My point was rationality vs the linguistics and mindset of always believing in green upwards arrows. Everything doesn't always go up all the time, at least that's what the data shows. himurak posted:Volatile means just that could go up could go down it's unpredictable. We have had upward volatility many times over. The reason you can't have weak upward trends is because gains being what they are can't be weak in an economic term. Absolutely. My statement was an observation on the language used and how it betrayed the mindset. Talking heads on television don't say "volatile" about a market going sharply up, but they do use it when markets go down - even gradually.
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May 20, 2012 06:36
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Ola posted:Buy SpaceX when it IPOs. SpaceX is either going to be the best or worst long position. It's either going to be the next Chipotle or the next Groupon, but I'd bet all my future earnings it's volatile as a motherfucker for the first decade.
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May 20, 2012 07:22
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Robotic killing machines is where it is at. Who builds them? The problem with space is it is only valuable if you have to leave this planet, and if it gets that bad down here money won't be worth anything. Defense robots are what the future holds.
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May 20, 2012 11:59
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I think it's two pronged revenue actually. Space tourism is going to be a thing if it ever falls to reasonable prices, but that's going to be a small slice of their income compared to how much selling all the moon cheese will make them.
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May 20, 2012 12:57
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Quodio Stotes posted:Sorry to ask again but any recommendations for beginner FOREX books? Non-professionals that play in FOREX lose money almost exclusively. Unless you have a multi-million dollar bankroll and lots and lots of time to react nearly instantly to complex algorithmic changes, the best advice is not to play. Nearly all of the FOREX literature is written by people who have a vested interest in exploiting inexperienced newbies, so there's very little that is of any real value.
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May 20, 2012 14:32
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saintonan posted:Non-professionals that play in FOREX lose money almost exclusively. Unless you have a multi-million dollar bankroll and lots and lots of time to react nearly instantly to complex algorithmic changes, the best advice is not to play. This is very, very true: I think the number of amateurs that lose money are something like 98%. You need major leverage to accomplish anything and that major leverage is also a huge risk. If you're still burning up inside to do FOREX, get one of the platforms that lets you play with virtual money and devote a few days to keeping your eyes glued to the screen and study how to read charts from sites online: it won't reveal the secrets of world finances to you but it can help you avoid the most unfavorable trends. If this still isn't enough, put up a thousand dollars and you can get 50-1 leverage on it. With the same money you could probably fly to Vegas, stay three nights, and play blackjack but if you don't want to do that, try this instead. Concentrate on one pairing (you're not going to be able to hedge or diversify) and study it really closely, including technicals, news, etc. and then buy at what seems like a good moment, and sell if you make any money at all. Oh yeah, don't forget to put a stop in at -1000 dollars, IE, -2%...it is not generally a good idea.
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May 20, 2012 14:59
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Quodio Stotes posted:Sorry to ask again but any recommendations for beginner FOREX books? There aren't any really good ones. Check out some TA books instead since the patterns are prevalent there. Technical Analysis Explained, Technical Analysis of Stock Trends, Technical Analysis: The Complete Resource for Financial Market Technicians, New Trading Systems and Methods, and Evidence-Based Technical Analysis.
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May 20, 2012 17:11
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Smerdyakov posted:This is very, very true: I think the number of amateurs that lose money are something like 98%. You need major leverage to accomplish anything and that major leverage is also a huge risk. If you're still burning up inside to do FOREX, get one of the platforms that lets you play with virtual money and devote a few days to keeping your eyes glued to the screen and study how to read charts from sites online: it won't reveal the secrets of world finances to you but it can help you avoid the most unfavorable trends. If this still isn't enough, put up a thousand dollars and you can get 50-1 leverage on it. With the same money you could probably fly to Vegas, stay three nights, and play blackjack but if you don't want to do that, try this instead. It's that bad huh? I was planning on playing with about 1,000 dollars and I was also planning on only focusing on a select few pairings. I know it doesn't mean poo poo but I've got an economics degree and follow the markets and international news regularly already despite not investing. I know many financial concepts but I know little about forex. I was hoping there was one book out there that had a straightforward treatment on the subject (I'm not gonna buy a make 300 dollars a weak playing forex book don't worry). Also are the people that lose the most the ones that try to hop on quick fluctuations and spend on multiple currencies? I am willing to wait out weeks or even months on a currency (I'm not trying to get rich quick here, forex just really interests me and I think I could do alright with it). Quodio Stotes fucked around with this message at 18:49 on May 20, 2012 |
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May 20, 2012 18:47
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Quodio Stotes posted:(I'm not trying to get rich quick here, forex just really interests me and I think I could do alright with it).
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May 20, 2012 18:52
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Something lawful posted:You thinking you could do "alright with it" at Forex trading is very misguided. Only put in what you are totally comfortable with losing (because you will). I dont see how that is "very misguided" I already said I am putting what I am comfortable losing and I have played the virtual simulators for awhile and made some gains. Alright is an incredibly meek adjective.
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May 20, 2012 18:59
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Quodio Stotes posted:I dont see how that is "very misguided" I already said I am putting what I am comfortable losing and I have played the virtual simulators for awhile and made some gains. Alright is an incredibly meek adjective.
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May 20, 2012 19:11
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Something lawful posted:Misguided was way too strong for what I was trying to say, apologies. What edge do you believe you have in the highly competitive foreign exchange market? Well I am trying to be modest but since you posed the question, I did get a good degree from a good school in economics and I am not viewing this as a way to get money quick or that my success is guaranteed. Following international markets, reading about market integration and currencies has always fascinated me. I would literally wiki something like the inflation in the weimar republic or the history of the yen when I was about 15 out of sheer interest. Reading about currencies their fluctuations and their histories has always interested me since I was young (things I think most people would find horribly boring). This means that doing research for me is fun and interesting where I assume it would be tedious for most individual investors. Lastly, I am willing to read and learn. Now all these things do not even guarantee a modicum of success but I'd like to think I would fair better than the average (new) individual investor and all those viewing forex as an easy way to make cash.
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May 20, 2012 19:22
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I read Currency Trading for Dummies as just an intro to Forex because I was curious about it and it seemed pretty well-written and would probably be fine for what you want it for.
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May 20, 2012 19:28
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Quodio Stotes posted:Well I am trying to be modest but since you posed the question, I did get a good degree from a good school in economics and I am not viewing this as a way to get money quick or that my success is guaranteed.
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May 20, 2012 19:36
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Quodio Stotes posted:I'd like to think I would fair better than the average (new) individual investor and all those viewing forex as an easy way to make cash. You're exactly the kind of person FOREX markets are hoping for.
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May 20, 2012 19:37
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Something lawful posted:You are going to be directly competing against professionals with years of experience, more capital, better information and faster technology than you. An interest in capital markets is simply not enough to position yourself better than your counterparties. Can't the same be said about the stock market?
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May 20, 2012 19:46
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Something lawful posted:You are going to be directly competing against professionals with years of experience, more capital, better information and faster technology than you.
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May 20, 2012 19:46
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Does anyone fancy explaining to me what the long term implications of the underwriters in the FB IPO trying to prop the stock price up are? To me it seems obvious that the stock is overpriced, and so I'm guessing it must be to anyone who actually knows and follows the stock markets. So propping the stock up doesn't help the stock price in the long run, it just delays the inevitable? Or are they hoping that people will be 'fooled' by what they are doing? Also when the stock does break $38 (which it seems very likely to do) what affect will that have on the other affiliated sites like Zynga, LinkedIn and Groupon. They've already lost some value presumably due to investors realising that the FB stock is overvalued but if FB goes below $38 will they lose more value? I should add I do not invest in stock markets but the mechanics of them does fascinate me.
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May 20, 2012 19:51
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TUBALLINATOR posted:Unlike speculation in the stock market?
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May 20, 2012 19:54
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TUBALLINATOR posted:Unlike speculation in the stock market? FOREX markets are much larger, use much more leverage, and are subject to many more variables than equity markets. It's essentially a zero-sum game, and as a result there isn't a concept like index funds where an individual investor can put small amounts of money in relative safety. It's much more directly competitive than stocks or bonds.
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May 20, 2012 19:55
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Something lawful posted:It is similar to an extent I agree. Forex is just faster, nastier and more brutal. I'd say the average person has a better shot at correctly valuing a business than valuing a whole currency. If you are starting out in something, why get into the toughest game available straight away? Beginners should start in stocks/bonds rather than opaque derivatives for example, the same goes for Forex. I understand what you are saying and I am clearly uniformed about investing. I just fail to see how FOREX is literally impossible to make gains in unless you are an expert at a firm with bundles of cash to throw around (which seems to be what you're saying). e- Also along with the "fast and brutal thing" if you avoid trying to day-trade forex and are willing to wait weeks or more doesnt that significantly lower risk?
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May 20, 2012 19:58
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Quodio Stotes posted:I understand what you are saying and I am clearly uniformed about investing. I just fail to see how FOREX is literally impossible to make gains in unless you are an expert at a firm with bundles of cash to throw around (which seems to be what you're saying). It is not impossible to make gains, in fact you can make huge gains. However your expected value will be negative. When you play roulette you can "win" sometimes, but on every spin you are actually losing a little bit on average. That will be you in the forex market. I don't see the point of buy-and-holding forex (as your will still be losing just with lower transaction costs). For a buy and hold strategy, actually invest in some asset that gives you returns like stocks or bonds. There is a much better chance of doing well that way than trying to day trade forex.
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May 20, 2012 20:07
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Something lawful posted:It is not impossible to make gains, in fact you can make huge gains. However your expected value will be negative. When you play roulette you can "win" sometimes, but on every spin you are actually losing a little bit on average. That will be you in the forex market. Again how can this mentality not be applied to stocks? FOREX like any sort of financial market is not random and there is a reason people win consistently while others lose. Again I am not saying I am going to be a winner I just see you painting FOREX as an impenetrable market that is highly volatile and not subject to being played successfully via intelligence, instinct, and knowledge. e- Something lawful posted:I don't see the point of buy-and-holding forex (as your will still be losing just with lower transaction costs). For a buy and hold strategy, actually invest in some asset that gives you returns like stocks or bonds. There is a much better chance of doing well that way than trying to day trade forex. One example of a less risky buy and hold strategy I was thinking about would be buying currency in a stable petro-economy when global oil prices drop (as they have recently) waiting til oil rises again and the currency returns to a similar previous value then selling off (I've monitored this trend in a few economies and the currencies frequently appreciate 10% or more in the course of a month). I would imagine investing in something like this would be way less risky then betting on daily fluctuations in currency. Quodio Stotes fucked around with this message at 20:17 on May 20, 2012 |
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May 20, 2012 20:12
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I won't discuss trading strategies specifically with you (because I'm no expert) but in response to: "I just see you painting FOREX as an impenetrable market that is highly volatile and not subject to being played successfully via intelligence, instinct, and knowledge." Yes, it is subject to that, all of which you do not have (relative to your opponents). Is this meant to be a stock only thread?
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May 20, 2012 20:20
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Something lawful posted:I won't discuss trading strategies specifically with you (because I'm no expert) but in response to: "I just see you painting FOREX as an impenetrable market that is highly volatile and not subject to being played successfully via intelligence, instinct, and knowledge." It says "trading" as well and I saw no other venue to ask my questions. Sorry for the derail I guess. Anyways again in response to you're last point again you will always have opponents with more knowledge better instincts etc. in the realm of stocks as well, but you have to start somewhere. I guess the main point I think you are trying to make that I am taking away from this is that forex has a higher percentage of professionals playing the game as opposed to stocks. I could be putting words in youre mouth but I think that's what you're getting at. Anyways again I was looking for advice on books not to start a derail.
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May 20, 2012 20:24
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Oil prices/Forex markets are ultimately tied to financial markets, especially European financial markets. If you want to predict price levels it seems like the real work that needs to be done is to study Italian/Greek/Spanish politics, and the recent history of their financial systems. Right now what is happening it is more or less a social science issue, and the predicting how the political mechanics in Europe will tell you a fair amount of about what is going to happen in the subsidiary markets. It isn't magic, a Greek default will depend on how elections in June work out and that result will probably affect markets around the world. The situation in Spain is also fairly predictable. Oil prices will likely track how things work out (if Greek defaults and Spain/Italy collapse, oil will tank), and petro-currencies like the CAD/RUB will follow them. Yeah, I don't know what is stopping people from studying economic/political history at this point but pretty much all the answers are pretty much there. Ardennes fucked around with this message at 20:34 on May 20, 2012 |
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May 20, 2012 20:29
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Quodio Stotes posted:It says "trading" as well and I saw no other venue to ask my questions. Sorry for the derail I guess. Anyways again in response to you're last point again you will always have opponents with more knowledge better instincts etc. in the realm of stocks as well, but you have to start somewhere. I guess the main point I think you are trying to make that I am taking away from this is that forex has a higher percentage of professionals playing the game as opposed to stocks. I could be putting words in youre mouth but I think that's what you're getting at. Anyways again I was looking for advice on books not to start a derail.
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May 20, 2012 20:35
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Something lawful posted:Yes pretty much. Just be careful. Yea I appreciate the warning and info I really do. I just don't like the whole attitude (mainly other posters) that I am a sucker like this saintonan posted:You're exactly the kind of person FOREX markets are hoping for. or doomed for failure when I explicitly said that I was willing to learn, putting up a little bit, and looking over the middle and long run. Also I was merely looking for books and advice not to be construed a fool. But thanks for the advice
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May 20, 2012 20:40
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Quodio Stotes posted:Also I was merely looking for books and advice not to be construed a fool. But thanks for the advice I don't know you well enough to know whether you're a fool or not. Your demeanor is common, though, and the results almost never turn out well. My first response answered your question about literature directly, so the rest of it wasn't so much a derail as a friendly warning.
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May 20, 2012 20:43
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Forex is hard, let's move on.
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May 20, 2012 20:46
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saintonan posted:I don't know you well enough to know whether you're a fool or not. Your demeanor is common, though, and the results almost never turn out well. My first response answered your question about literature directly, so the rest of it wasn't so much a derail as a friendly warning. What was my demeanor exactly? I explained I was willing to learn and had an interest in the subject. Is that not a precursor for success in any field? I told you I was going to be conservative and did not expect to do well so your response was a little annoying. I don't care that much I just really don't get what you are trying to say about my so called demeanor.
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May 20, 2012 20:49
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Quodio Stotes posted:Again how can this mentality not be applied to stocks? FOREX like any sort of financial market is not random and there is a reason people win consistently while others lose. Again I am not saying I am going to be a winner I just see you painting FOREX as an impenetrable market that is highly volatile and not subject to being played successfully via intelligence, instinct, and knowledge. The difference again is that FOREX is zero sum, much much more highly leveraged and liquid and proper analysis of all the factors is much harder for one person to do so it's really more suited for institutions with computerized systems. If you're willing to FOREX and not use any margin then it's probably not that dangerous, but your profits will also be minuscule even if you're absolutely right about some extreme event. Quodio Stotes posted:One example of a less risky buy and hold strategy I was thinking about would be buying currency in a stable petro-economy when global oil prices drop (as they have recently) waiting til oil rises again and the currency returns to a similar previous value then selling off (I've monitored this trend in a few economies and the currencies frequently appreciate 10% or more in the course of a month). I would imagine investing in something like this would be way less risky then betting on daily fluctuations in currency. The problems here are as follows: 1) Stable petro-economy? Name one. How much are you willing to bet on politics of a developing country that depends heavily upon resource extraction and thus doesn't need a functioning civil society for tax revenues? 2) "Waiting till oil rises again" How long can you wait before your margin murders you? A year? Two years? Three? If you're using no margin you can wait all you want but then you're taking on a big long term risk and tying up capital for a tiny profit. If you've got the FOREX bug no one can really get rid of it for you, though there was a nice comment from someone a few pages back along the line of "What happened to all of the FOREX traders that were on here? They must've made too much money already and retired." There are alternative theories! It's just a fact that an overwhelming number of people who try it lose all their money and that FOREX actively tries to attract people by convincing them that if they're smarter than the average bear they'll be good at it. Even if you are, you can still lose your shirt. Turkeybone posted:Forex is hard, let's move on. I wish I had seen this before I wrote my entire post but yes, that's what we're trying to say.
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May 20, 2012 21:01
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Forex is incredibly difficult to trade. While you may believe that you have an advantage or trade there are so many unique factors that may push out your gain. Remember that Forex trades 24 hours a day around the world in different markets with each one having their own unique information advantage. Especially in a market like this where there are significant problems in Europe that may positively or negatively affect rates. evilwaldo fucked around with this message at 21:16 on May 20, 2012 |
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May 20, 2012 21:14
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Smerdyakov posted:
Oh, it can't be that hard. The same guy has been in charge of Egypt for 30 years, and even longer in Libya. Now, let me just take out last year's newspaper...
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May 20, 2012 21:48
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Forex is ultimately a craps shoot but speculative demand for energy does affect petro-currencies but plenty of other things do as well. It is risky since you don't exactly know when the European crisis is going to evolve and where the true bottom is. I guess if oil goes below 50/barrel, go nuts buying rubles... (don't do that).
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May 20, 2012 21:56
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Ardennes posted:Forex is ultimately a craps shoot but speculative demand for energy does affect petro-currencies but plenty of other things do as well. I have faith Putin will keep russia together (sadly).
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May 20, 2012 22:05
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