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Pollyanna posted:I suppose I can use FA to figure out what to invest/buy into, and TA to actually do any of the money work. Would that make sense? That's because he's not good at fundamental analysis or investing in general. Good value investors have crushed the broad market over the past 20 years. The richest investors in the world are generally FA value investors. There are tons of lousy analysts though, but don't blame the car if the driver doesn't know how to put it in gear. Most analysts are sell side - meaning that they work to sell information, stocks, IPOs - you name it. They're glorified salesmen. They get their series 7, crunch some data in a spreadsheet, and call it a day. They get paid regardless of what happens to the stocks they're selling you on. I'm generally leery of using TA alone for the precise reason that it takes all judgment out of the equation. The best TA guys I know will tell you that everything they do is equal parts art and science. Over years of experience, they'll look at two identical charts, and will make the trade in one instance but not in the other. If it were just a matter of math, then the calculator you used in high school would be the world's best TA investor. In fact, some of the early traders did just that: they used formulas programmed into a TI calculator: http://en.wikipedia.org/wiki/Joe_Ritchie. But that edge is gone. So good traders trade with their gut as much as their charts. Until you've been trading for years, you don't have a gut to trust. You just don't know what you don't know.
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Aug 14, 2013 19:13
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How do you get good at FA, then? Obviously read books 'n poo poo, but what makes one person successful and another...not? Isn't there a significant luck component to this? And if people have been able to beat the market, that means there have to be some sort of rules or methodology to doing well.
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Aug 14, 2013 19:39
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Sold about 1/4 of my AAPL position. Will probably get rid of another 1/4 if it gets to 550ish before iPhone announcement. The popular theme seems to be that money is moving out of other tech stocks (GOOG) and into AAPL again. Still, a run from 400 to 500 is pretty big and I'm getting worried.
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Aug 14, 2013 19:41
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Pollyanna posted:How do you get good at FA, then? Obviously read books 'n poo poo, but what makes one person successful and another...not? Isn't there a significant luck component to this? And if people have been able to beat the market, that means there have to be some sort of rules or methodology to doing well. In terms of FA, there's very little luck involved. However what it often does require is a LONG TIMELINE for the market to agree with your valuation. It can sometimes take YEARS for that to happen. Whether you have the stomach for all that waiting is what separates good investors from the bad ones. And the emphasis is on investing not trading. I forgot who said this but "Don't just do something, sit there."
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Aug 14, 2013 19:50
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I'd love it if GOOG got back under 800, I might load up a few shares.
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Aug 14, 2013 19:55
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Pollyanna posted:How do you get good at FA, then? Obviously read books 'n poo poo, but what makes one person successful and another...not? How do you get good at programming or baseball? - Study of theory - Application of theory to real situations - Mentorship - Regular analysis of previous play/work Pollyanna posted:Isn't there a significant luck component to this? Sure, but compared to what? Pollyanna posted:And if people have been able to beat the market, that means there have to be some sort of rules or methodology to doing well. Over what kind of time frame? A methodology may work over the next two years and then completely wipe you out in year 3. The market is a constantly shifting thing. What works today may not work tomorrow. In goon terms: Imagine you are professional starcraft player. You come up with an original opening that people haven't really seen before. The meta-game isn't suited to dealing with it, so you win a lot of games initially. Eventually, though, people will learn about the opening and the meta-game will adjust to it, making it significantly less effective. This is how any competitive thing works: it's not about knowing a secret strategy to beat people, it's about understanding the mechanics of what you are doing and being able to come up with new strategies based on the current situation. I may be wrong, but it seems like you're looking for a trick that you can easily learn and use to make money. These tricks exist, but for vanishingly small amounts of time.
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Aug 14, 2013 20:14
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Pollyanna posted:How do you get good at FA, then? Obviously read books 'n poo poo, but what makes one person successful and another...not? Isn't there a significant luck component to this? And if people have been able to beat the market, that means there have to be some sort of rules or methodology to doing well. I don't know what luck is - but there's an apocryphal saying in the investment world: you can't guarantee success, but you can deserve it. Being a fundamental investor - and really doing your homework - is hard, boring and takes time and lots of patience as well as strong emotional control. If you do the work and read every scrap of publicly available information on a given investment, if you do a detailed DCF analysis (or whatever value-based model you decide) to find an attractive entry point, if you have the patience to wait for the appropriate price, if you then have the willpower to hold on to a position even when the price falls, and have the continued diligence to read future filings once you own the security... Then you deserve to succeed. It's not easy. Controlling your emotions when an investment goes against you - and relying on your analysis of the underlying business is really difficult. It's harder than finding a cheap stock.
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Aug 14, 2013 20:14
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Are there any good rules of thumb for setting a trailing stop loss? I've got mine set at $10 on AAPL. Too tight? Too loose?
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Aug 14, 2013 20:32
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Acceptableloss posted:Are there any good rules of thumb for setting a trailing stop loss? I've got mine set at $10 on AAPL. Too tight? Too loose? Depends on your goal. After the run they've had, and at such a precarious psychological dollar value, a drop can cause an avalanche of $10-30 easily. If you want to get out and re-buy lower, $10 is probably pretty solid depending on how large your position is. It could be at $530 or $475 by Friday so it depends how willing you are to sell/buy. It sounds like some of the big hedge fund guys are re-buying in, or jumped in at the low $400s so setting tight stops is probably a good idea.
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Aug 14, 2013 20:40
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Acceptableloss posted:Are there any good rules of thumb for setting a trailing stop loss? I've got mine set at $10 on AAPL. Too tight? Too loose? Acquilae fucked around with this message at 21:12 on Aug 14, 2013 |
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Aug 14, 2013 21:08
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Acceptableloss posted:Are there any good rules of thumb for setting a trailing stop loss? I've got mine set at $10 on AAPL. Too tight? Too loose? Apple will lose that in a day once the hype dies down.
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Aug 14, 2013 23:23
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Smear Campaign posted:I may be wrong, but it seems like you're looking for a trick that you can easily learn and use to make money. These tricks exist, but for vanishingly small amounts of time. That's more or less what I'm trying to prove with regards to TA. With FA, I'm just inexperienced, but I'm kind of annoyed that I'm being pushed to do TA based on "we went to this guy's class and he knows the best way to do TA and you totally have the skills to do it so earn back the money we've spent on you". At least, that's how my parents treat it. I'm realizing now that the only reason my parents want me to be a daytrader is because I'm constantly connected to the internet anyway.  But for fundamentals, and the stuff I'm reading in Neatest Little Guide, it's still pretty interesting and I think I can learn to do well with it. And I'm not under any delusion that I'll make Billions Of Cash or something, I'm obviously new. I'll just keep reading and learning.
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Aug 15, 2013 00:02
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I hate to keep bringing this up but coming to learn the market under these pressures and circumstances is going to be loving terrible.
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Aug 15, 2013 00:29
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Pollyanna posted:That's more or less what I'm trying to prove with regards to TA. With FA, I'm just inexperienced, but I'm kind of annoyed that I'm being pushed to do TA based on "we went to this guy's class and he knows the best way to do TA and you totally have the skills to do it so earn back the money we've spent on you". At least, that's how my parents treat it. You should probably just not, seriously. I've always been a value investor but especially now I have no idea how people are doing it with technical analysis. Equity markets right now are so especially hosed up I couldn't imagine trading off charts.
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Aug 15, 2013 01:21
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R.A. Dickey posted:You should probably just not, seriously. I've always been a value investor but especially now I have no idea how people are doing it with technical analysis. Equity markets right now are so especially hosed up I couldn't imagine trading off charts. I skim bits off of tech stock movements following their momentum. I'd imagine that's what most people do unless they're day trading options. That's a bit scarier.
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Aug 15, 2013 02:08
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No kidding. I still don't get what their point is and I'm extremely wary of this "Professor" guy they're paying to get investment tips from. Looking through his textbook is basically...I don't even know. It seems like very basic information about technical analysis, and I don't know what the gently caress is so interesting about it. The grand majority of his book is simple information you can find online ("Chapter 2: Technical Indicators in Motion: Hockey Sticks and Other Patterns", "Chapter 3: Analysis of Blades, Waves, and Patterns") and his methodology, which is the point of the book and basically what matters, is as far as I can tell just "buy stocks going up and sell stocks going down and this is what you do when you see a wave". His book can't even get the difference between "investor" and "trader" straight. (EDIT: And not a single thing in this says anything about daytrading! It's just loving "TA 101". Jesus, this really is mostly my parents' doing.  )"I developed a simple guide to investing in the stock market. It requires only one minute a day."  His advice and his book is really just nothing special. It looks like it's basically just a way to get old people to subscribe to his website. Like, you couldn't do gently caress all with the information in this book without having to rely on what he says will happen. It's not really entirely his fault, though. He's some guy, but he's not really all that egregious. The problem is my parents are pushy, stubborn, and clueless and don't really like to employ critical thinking to this kind of thing. God drat, I'm worried my parents will get scammed by some skeevy rear end in a top hat someday.  This really should go in E/N, shouldn't it?
Pollyanna fucked around with this message at 02:20 on Aug 15, 2013 |
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Aug 15, 2013 02:16
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Listen you already post enough e/n If you want to actually jump on the ship, which you week like you still have to convince yourself of, get yourself Security Analysis. Read through the whole thing and take notes. If you are actually interested in the market then this won't be a chore, as you will realize this is the poo poo that made Buffett who he is today. It's also old and a lot of the book needs multiple readings to understand, then time to digest and apply to the modern market. If you cant do that then I'm thinking your market aspirations are going to be little more than "hmmm well I read a good seekingalpha article..." And "poo poo, if only I stayed in X stock until TODAY  "
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Aug 15, 2013 02:58
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Hey folks - jumping on with a seemingly ridiculous question, but my Mom inherited 260k in blue chip (ford, etc) stocks (10-11 companies, will have exact details tomorrow) and doesn't need the money (is 75, has pension, SS, house paid for, etc) but wants it to grow so she can give it to us when she dies. She currently gets $5700 in dividends yearly (which she spends, I think...). Anyway, the question is, she is "uncomfortable" managing that money, is afraid she will mess it up somehow. Currently it's in a Well-Fargo brokerage account. As long as she does nothing, there are no fees or anything, but she said she has to pay $99 per trade (which seems high). If she lets them manage it, they will take 1.1% annually, (which also seems high). If we pull this from Wells Fargo and just put it into some reasonable no-load mutual funds or something, it seems to me we would probably do as well as the management could. It's not like they have insider information that some giant mutual fund does. Am I wrong? Or is it advantageous to hold individual stocks over mutual funds for some reason. My Dad did all the investing and followed all this stuff. I have no desire to do so. Suggestions?
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Aug 15, 2013 03:44
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Holding US blue chips long term is an old school thing that lots of old people do because that was the thing to do in the 60s. The markets however are now more volatile, there are way more international players and companies are no longer as stable in most sectors. Risk is therefore greater and expense fees for mutual funds are much lower and ETFs now exist so the smart strategy has shifted to holding more diversified portfolios made up of these instruments. She'll most likely be fine but would be wise to reduce her risk due to her age and hands off management by moving in to dividend funds, bond funds and index funds.
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Aug 15, 2013 03:51
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Pollyanna posted:How do you get good at FA, then? Obviously read books 'n poo poo, but what makes one person successful and another...not? Isn't there a significant luck component to this? And if people have been able to beat the market, that means there have to be some sort of rules or methodology to doing well. The reality of the situation is it's all a crapshoot and all you can control is your risk. Everything else is luck and the statistics bear it out. There's a reason you see "past results are no predictor of future performance" plastered all over everything, because that's legitimately what the science suggests. Put your money in QQQ and go enjoy your life doing something productive, for society's benefit if nobody else.
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Aug 15, 2013 06:32
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Pollyanna posted:Isn't there a significant luck component to this? And if people have been able to beat the market, that means there have to be some sort of rules or methodology to doing well. Hi. I'm a relative newcomer to this thread and not in any sense an expert. But there's something that is clear to me and probably to most people in this thread. If a hundred thousand monkeys threw darts at a big list of stocks and then each dart meant a $10,000 investment in that stock on that day's close, and then you sold all those stocks the following day: Nearly 50% would beat the market A small number would exactly match the market Nearly 50% would underperform the market. That's fairly obvious. Now, imagine the same scenario, but the monkeys throw darts and we invest in each security for an amount of time determined by spinning a giant Bob Barker Price is Right spinning wheel. Then we get out and the monkey gets a new dart. We do this for a year. You'd now have a bell curve. A bunch of monkeys would be near the center of the bell curve, modestly outperforming or modestly underperforming the market. A small number of monkeys, through sheer luck, would significantly outperform, and a small number would significantly underperform. The longer we run this experiment, the more the monkeys' performance will cluster around the peak of the bell curve. It will get taller and taller, with very thin legs extending out in each direction. After ten years, if we had enough monkeys, we'd have a situation where there were still a small number that outperformed the market by a large margin. These monkeys would be hailed as geniuses in the press, get high-paying jobs at investment firms, and write articles and blog and tweet and millions of people would hang on their every word, and ape (sorry) their every investment, and so on. That's technical analysis. Or fundamentals analysis. Or any other methodology. It's incredibly difficult to distinguish genius from luck. Especially when the monkeys aren't actually throwing darts at random, but are instead making decisions based on some kind of reasoning which we can only really analyze after-the-fact based on success or failure, because it's impossible to actually know exactly why every stock moved exactly how it moved, because we cannot know the minds of every human being participating in the market. I think the true test of a particular approach would have to be a statistical analysis that showed that a majority of those using the approach beat the market, consistently over a very long period. I don't think anyone has ever managed that yet. I hope someone will correct me if I'm wrong. e. I think I still favor FA, because I think human brains are especially good at finding patterns where they don't actually exist and/or aren't actually significant (so I disfavor TA). Then again, human psychology is also extremely good at rationalizing gut decisions, paying attention to evidence that supports our beliefs and rejecting that which doesn't, groupthink, and reacting very differently to positive vs. negative reinforcement of ideas. But I'm not sure it's possible to prove that Warren Buffet isn't just a monkey way way out on the end of a long thin tail of a bell curve, vs. a true investment genius whose methodology is actually foolproof. I think it's unlikely he's a monkey, but... Leperflesh fucked around with this message at 08:46 on Aug 15, 2013 |
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Aug 15, 2013 08:39
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Today is one of those all-red days(except AMZN) where I'm going to avoid looking at stocks for a week.
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Aug 15, 2013 15:20
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Acquilae posted:Today is one of those all-red days(except AMZN) where I'm going to avoid looking at stocks for a week. It's definetly a  atmosphere.
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Aug 15, 2013 15:35
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Acquilae posted:Today is one of those all-red days(except AMZN) where I'm going to avoid looking at stocks for a week. Look at it as an opportunity to have a better entry on things that have been riding their 52w highs?
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Aug 15, 2013 15:56
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http://www.nbcnews.com/business/apple-closes-iphone-deal-china-mobile-6C10925350 That could be quite the revenue boost for AAPL and QCOM.
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Aug 15, 2013 16:14
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Leperflesh posted:
Warren Buffett gets trades that nobody else can get because he is Warren Buffett. Look for example at the deal he struck with Goldman Sachs. Normal investors do not get opportunities like that. It is arguable that he was lucky fairly early on in his career, particularly with his large investments into Coca Cola, which is one of the primary reasons he (and Berkshire Hathaway) are so well-off today. He also frequently buys distressed businesses in whole (or in significant enough percentage) at pennies on the dollar so that he can then call the shots and put new management in place so that the business turns around and becomes profitable. However, it can also be said that investing 30+ years ago was a VERY different experience than what it is today. You could not look up stocks on the internet and find their financial reports at the tip of your fingers in less than 10 seconds like you can now. That information was "available" to all investors, sure, but not nearly in the same way it is now. You also could not look up past stock prices on a nice, alterable chart like Google Finance and easily visualize all the past dividends, splits, etc the way you can now. Simply put, investing took a LOT more "work" than it does today. People who were able to put in this work (or had the money to hire people to do it for them) were obviously going to have much greater information available about a stock than your average investor. Also, news traveled slower, which presented bigger opportunities to people who heard it first (which would always be people like Buffett). Real-time quotes did not exist. There were not computerized algorithms running microtransactions to squeeze profits off of any shred of illiquidity available.
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Aug 15, 2013 16:15
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I've been in a lot of cash ever since I got tripped on my NFLX stop. F down 3% on ...Walmart's miss? Backing up the F-150.
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Aug 15, 2013 16:29
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pr0k posted:I've been in a lot of cash ever since I got tripped on my NFLX stop. F down 3% on ...Walmart's miss? Backing up the F-150. Apparently CSCO makes F-150 components. I miss my non-computerized Corolla
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Aug 15, 2013 16:35
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Has anyone heard of TrimTabs Float Shrink ETF? It's a fairly new ETF that began in late 2011 and it's an actively managed fund that invests in 100 companies that are using their free cash to buyback shares. To be in the fund they have had to buy back shares in the last 120 days using free cash and not borrowed funds. This to me sounds like a pretty good idea focused on taking advantage of the simple supply vs. demand function that exists in the stock market. Just wondering if anyone had any thoughts on this one before I initiate a position.
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Aug 15, 2013 16:43
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Acquilae posted:Today is one of those all-red days(except AMZN) where I'm going to avoid looking at stocks for a week. This is one of the days I love for my short $SPY position, long $SLV and $GLD 
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Aug 15, 2013 17:38
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pr0k posted:I've been in a lot of cash ever since I got tripped on my NFLX stop. F down 3% on ...Walmart's miss? Backing up the F-150. Sup Ford buyin' buddy. 
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Aug 15, 2013 18:12
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Sanky Panky posted:This is one of the days I love for my short $SPY position, long $SLV and $GLD
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Aug 15, 2013 18:15
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I checked out of gold at $1600 after second-guessing my exit at $1800. I still turned a good profit, but gently caress if I'm getting back into that dog's breakfast. Too much fuckery with price discovery in that arena, in my opinion.
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Aug 15, 2013 18:16
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What the hell is going on today? Portfolio only down 0.6% right now. 
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Aug 15, 2013 18:31
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Josh Lyman posted:What the hell is going on today? All of the economic indicators released were good, so everyone figures tapering is coming in September.
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Aug 15, 2013 18:36
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Josh Lyman posted:What the hell is going on today? There is a lot of distribution going on below the surface. Some of it is tapering worries but the market has been weak for some time. Market breath is calling for a pullback.
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Aug 15, 2013 18:40
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Wrote SLW calls against my position yesterday. Up 8% today. Is china what's dragging the metals up?
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Aug 15, 2013 19:14
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pr0k posted:I've been in a lot of cash ever since I got tripped on my NFLX stop. F down 3% on ...Walmart's miss? Backing up the F-150. Tesla is still up though. Apparently not making money is the new investing fad for automotive companies. Ford also has a Beta of 2.12, so their drop is not what I would call unreasonable. (though I still don't like it )What is really perplexing me:  Where is all the money going?  Commodities were a little up today, but it doesn't mitigate a selloff in... everything. People are panic selling and putting money back into cash. While interest rates may indicate a rise in long term rates, short term is still at rock bottom without the Fed's help. The question you need to ask yourself is how long are people going sit on no yield and for how long interest rates are going to rise. If long term rates slowly go up over the next year, the safest bet for any yield is still going to be domestic equities. quote:All of the economic indicators released were good, so everyone figures tapering is coming in September. Cheesemaster200 fucked around with this message at 23:51 on Aug 15, 2013 |
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Aug 15, 2013 23:38
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Cheesemaster200 posted:
Selling into strength. Not every day can (or should) be an up day.
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Aug 16, 2013 00:06
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Cheesemaster200 posted:Because that is a reason to get out of large cap equities who have been hoarding cash for five years in an uncertain economy....? Wait, you mean the market can be irrational? 
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Aug 16, 2013 00:11
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