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Fellowship of the Shares
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sandbox
Senior |
13-Jun-2007 15:09
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Hi elfin, Thanks for your explanation last night. It was really very helpful for me as I am trying to learn how to use the charts. Would you be able to help me as I try to use what you have shared to interprete UTAC? Here goes nothing... UTAC seems to be heading towards tight bollies with c/o heading down.. this trend seems to follow that of 28 may. Prices may therefore head up in the coming weeks. If the interpretation is wrong, then please don't laugh too hard... taking up the courage to put my head on the chopping board here.... Cheers. |
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elfinchilde
Elite |
13-Jun-2007 14:30
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lol. yes. esp since i'll be on hols too. :P |
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shijiez
Member |
13-Jun-2007 12:38
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lol..good call easton.."long zhong xiam ar!!! dua leng gong lai liao!!" |
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EastonBay
Master |
13-Jun-2007 12:27
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OH NO, singaporegal is going on a short holiday again... brace for another one day correction (whatever you call it, STI to close lower on Friday as compared to Thursday's close). SGH coming into play. |
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j3r0m3
Veteran |
13-Jun-2007 09:24
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Hi Elf, I also use only those free software and the busd from poems. But still dunno how to interpret it actually... Charting, i use chartnexus |
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elfinchilde
Elite |
13-Jun-2007 09:15
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rayphua, of course i'm sweet. *muacks* keke. but yea, agree with him. busd not so on-the-surface to read. sometimes, just because a stock reads sell down all the way, doesn't mean it's being sold down. if you see a/d line going up and all busd is sell down, might be passive accumulation going on (ie, buyers waiting for sellers to throw to their price). time of trade impt too. vols as well. quite a lot to learn to read and interprete. for a start, the blues are easier to learn. and belatedly, shijiez/jerome, you don't need to buy expensive software to start learning TA really. all i'm using is poems busd, and SJ charts. all free. seriously. what i would like tho, is market depth. keejang!! you reading this? :P hm. my ksw is doing very prettily. keke. |
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ed88ks
Senior |
13-Jun-2007 02:02
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Revolutionary new market for un-registered stocks
Main Street is a victim of post-traumatic stress disorder, numb. But Wall Street handles stress differently. Greed is a great aphrodisiac. Wall Street has invented an incredible new stress reliever to process the outrageous largess generated by their recent private equity deals, which are on track to top $1 trillion this year. We know that barely a third of registered securities are traded publicly by individuals, the rest by institutions.
Now Wall Street has invented a revolutionary new market strategy exclusively for the trillions of unregistered securities they're selfishly creating. For example, Goldman Sachs' new GS TruE (for Tradable Unregistered Equity). Unfortunately, this further disconnects Main Street from Wall Street as the inequality gap widens, further inflating the bubble as frustrated Americans shift from investing to spending.
History is repeating itself. Remember Robert Shiller's classic, "Irrational Exuberance"? Its release was perfectly timed, a warning, hitting the market at the last peak in March 2000. Today several new publications from industry leaders are flashing similar neon signs, "Big Pop Coming!" Here are four:
1. Derivatives bubble
"A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation." Risk manager and derivatives guru Richard Bookstaber played a role in the 1987 crash and the 1998 LTCM collapse. In his new book he says the "financial markets that we have constructed have become so complex. And the speed of transactions so fast that apparently isolated actions and even minor events can have catastrophic consequences ... the odds are pretty high we'll see other dislocations that match the type of turmoil we saw with the crash in 1987."
2. Greed bubble
"Capital Ideas Evolving" is Peter Bernstein's follow-up to his pre-dotcom 1992 classic, "Capital Ideas," and his 1998 "Against the Gods: The Remarkable Story of Risk." Bernstein is a Wall Street legend. He examines the path taken by behavioral finance, modern portfolio and the efficient market hypothesis from academia to the frantic hi-speed, hi-tech everyday world of Wall Street.
But Business Week says Bernstein worries that derivatives are playing too big and dangerous a role because "there are a lot of inexperienced players using them." He hears the few winners, like Barclays, Goldman and Yale, "who say how difficult it is to beat the market and that it's getting more difficult." Meanwhile, the irrational exuberance of all the inexperienced masses continues blowing the bubble while "playing" with $370 trillion in derivatives worldwide.
3. Global bubble
GMO, the global investment management firm, manages $145 billion. Chairman Jeremy Grantham writes of his six-week trip around the world in GMO's latest Quarterly Letter: "The first truly global bubble: From Indian antiquities to modern Chinese art; from land in Panama to Mayfair; from forestry, infrastructure, and the junkiest bonds to mundane blue chips; it's bubble time!"
He warns of a global mega-pop coming: "Everyone, everywhere is reinforcing one another. Wherever you travel you will hear it confirmed that 'they don't make any more land,' and that 'with these growth rates and low interest rates, equity markets must keep rising,' and 'private equity will continue to drive the markets.' To say the least, there has never ever been anything like the uniformity of this reinforcement."
4. Speculative bubbles
"One Down, Many Yet to Fall" headlines the midyear report in economist Gary Shilling's Insight Newsletter. America's headed into a perfect storm: "An unusual confluence of five forces in recent years created a virtual world of financial speculation that departed spectacularly from the real economic world, the 'grand disconnect' we've called it." The five forces of "runaway speculation" are:
Shilling still sees subprimes triggering the meltdown. But like Bernstein, Bookstaber and Grantham, he also feels the speculative excesses of the private equity deals may beat subprimes to the punch: "Just as the U.S. housing bubble is bursting, speculation elsewhere will come to a violent end, if history is any guide. Some astute pioneers, including Richard Bookstaber, who designed various derivative-laden strategies over the years, now fear that financial derivatives and hedge funds - focal points of today's huge leverage - will trigger financial meltdown."
The bottom line
If you're a bullish optimist, stick to Gross's quixotic upbeat vision in "Pop!" Look years into the future; past the widespread devastation of another extended bear market and recession into the promises of a "New Age" of innovations, prosperity, a roaring bull.
But if you're more of a realistic, conservative bear, heed Grantham's warning: "The bursting of the bubble will be across all countries and all assets, with the probable exception of high-grade bonds. Risk premiums in particular will widen. Since no similar global event has occurred before, the stresses to the system are likely to be unexpected. All of this is likely to depress confidence and lower economic activity."
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blackjac
Member |
13-Jun-2007 00:11
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Ok. Thanks for the effort and all that literature!! |
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rayphua
Member |
13-Jun-2007 00:02
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Just a little to add to Elfin's explanation: Buy Up and Sell Downs - It can be tricky, and the obvious may not be that obvious; too much support at the buys is not necessarily a good thing. My sis is hard at work : ) Ain't she sweet. |
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elfinchilde
Elite |
12-Jun-2007 23:18
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singaporegal. *hugs* sigh. elf v stressed with work and all. :( not going kl, trip got scuttled thanks to bird flu. but anw, still going to take off. figured out, one day shopping, one day alcoholing, one day sunbathing at sentosa, final day slack, sounds like a perfect vacation. ahh. keke. hm. seeing a lot of new members. the rayphua effect? keke. blackjac: just a brief list of acronyms for the newbies: note, explanations given are generally only. note that note all indicators are accurate for all stocks. a/d = accumulation/distribution. it's a tech chart that measures buying and selling pressure. a/d up => more ppl are accumulating the stock. c/o = chaikin oscillator. like a/d, it's a lead indicator. ie, both a/d and c/o move before the share price moves. c/o leads a/d as well. which is why a 'perfect buy' signal is when c/o is up, a/d just turning/not yet, price range bound and bollies tight. bollies = bollinger bands. i call them bollies 'cos it makes them sound cute. haha. (yeayea ok, bimbo moment. :P) BB = big boys. the ones who move the market, who cause the tech patterns you see. which us hay bees try to track. choohian had an extremely good definition, see if you can find it. keke. take note BBs come in different classes too. their patterns of movement are different. you'd see it on the busd differently. like right now, if you look at charts, consistently what you'll find is local BBs. foreign funds are only in very few of local stocks now. busd = buy up sell down data. which is one of the most basic but best tools for seeing what's really going on. MACD = moving average convergence divergence. a lag indicator. better for newbies and solid stable stocks. same as MA crossover (MAx) in a way. it'll cross a buy signal when the short crosses the long, and sell when the long crosses the short. lag indicator so movement more definitive, but since it moves after share price moves, if what you want is a breakout, you'll likely miss it on the MACD/MAx. hm. what else is there? oh. 'Analyst: recommended: BUY.' = better consider twice. haha. and rogue! good puppy! *patpat* keke. k all, nites! :) |
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ed88ks
Senior |
12-Jun-2007 23:15
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Steve's note: With his Quantum Fund returning more than 3,000% in the 1970s, George Soros is considered one the greatest speculators to ever live. For his insight on how to ride a profitable trend for years, read on? An Interview with George Soros How would you describe your particular style of investing?
My peculiarity is that I don't have a particular style of investing or, more exactly, I try to change my style to fit the conditions. If you look at the history of the Fund, it has changed its character many times. For the first ten years, it used practically no macro instruments. Afterwards, macro investing became the dominant theme. But more recently, we started investing in industrial assets. I would put it this way: I do not play according to a given set of rules; I look for changes in the rules of the game. You have said that intuition is important in your investment success, so let's discuss intuition. What do you mean when you say you use intuition as an investment tool? I work with hypotheses. I form a thesis about the anticipated sequence of events and then I compare the actual course of events with my thesis; that gives me a criterion by which I can evaluate my hypothesis. This involves a certain element of intuition. But I'm sure the role of intuition is so great, because I also have a theoretical framework. In my investing, I tend to select situations that fit into framework. I look for conditions of disequilibrium. They send out certain signals that activate me. So my decisions are really made using a combination of theory and instinct. If you like, you may call it intuition. Ordinarily, people think of money managers as having a combination of imagination and analytical ability. If you broke down all the skills into just those two categories, which one would be your particular strength ? imagination or analytical ability? I think my analytical abilities are rather deficient, but I do have a very strong critical faculty. I am not a professional security analyst. I would rather call myself an insecurity analyst. That's a provocative statement. What do you mean by that? I recognize that I may be wrong. This makes me insecure. My sense of insecurity keeps me alert, always ready to correct my errors. I do this on two levels. On the abstract level, I have turned the belief in my own fallibility into the cornerstone of an elaborate philosophy. On a personal level, I am a very critical person who looks for defects in myself as well as in others. But, being so critical, I am also quite forgiving. I couldn't recognize my mistakes if I couldn't forgive myself. To others, being wrong is a source of shame; to me, recognizing my mistakes is a source of pride. Once we realize that imperfect understanding is the human condition, there is no shame in being wrong, only in failing to correct our mistakes. You have said about yourself that you recognize your mistakes more quickly than others. That sounds like a necessary trait in investing. What do you look for to see if you are wrong? As I told you before, I work with investment hypotheses. I watch whether the actual course of events corresponds to my expectations. If not, I realize that I am on the wrong track. But sometimes things get off the track for a short time and then get back on the track. How do you know which is the case? That's what takes talent. When there is a discrepancy between my expectations and the actual course of events, it doesn't mean that I dump my stock. I re-examine the thesis and try to establish what has gone wrong. I may adjust my thesis or I may find that there is some extraneous influence that has come into the picture. I may end up actually adding to my position rather than dumping it. But I certainly don't stay still and I don't ignore the discrepancy. I start a critical examination. And generally, I'm quite leery of changing my thesis to suit the changed circumstances, although I don't rule it out completely. You have talked about the "joy of going against the herd." What signs do you look for to determine whether it is time to buck the trend? Being so critical, I am often considered a contrarian. But I am very cautious about going against the herd; I am liable to be trampled on. According to my theory of initially self-reinforcing, but eventually self-defeating trends, the trend is your friend most of the way; trend followers only get hurt at inflection points, where the trend changes. Most of the time I am a trend follower, but all the time I am aware that I am a member of a herd and I am on the lookout for inflection points. The prevailing wisdom is that markets are always right. I take the opposition position. I assume that markets are always wrong. Even if my assumption is occasionally wrong, I use it as a working hypothesis. It does not follow that one should always go against the prevailing trend. On the contrary, most of the time the trend prevails; only occasionally are the errors corrected. It is only on those occasions that one should go against the trend. This line of reasoning leads me to look for the flaw in every investment thesis. My sense of insecurity is satisfied when I know what the flaw is. It doesn't make me discard the thesis. Rather, I can play it with greater confidence because I know what is wrong with it while the market does not. I am ahead of the curve. I watch out for telltale signs that a trend may be exhausted. Then I disengage from the herd and look for a different investment thesis. Or, if I think the trend has been carried to excess, I may probe going against it. Most of the time we are punished if we go against the trend. Only at an inflection point are we rewarded. |
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blackjac
Member |
12-Jun-2007 22:48
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Elf May I know what is c/o; a/d? Thanks |
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singaporegal
Supreme |
12-Jun-2007 22:01
Yells: "Female TA nut" |
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Oh yeah... I haven't seen Uncle geojam posting for some time too. |
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singaporegal
Supreme |
12-Jun-2007 21:59
Yells: "Female TA nut" |
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I've been really busy this week with work.... trying to finish up everything before my short holiday this weekend. Hey elfie... when are you going to KL again? |
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shijiez
Member |
12-Jun-2007 21:43
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hmm...books wise.i do read alot...but i feel sometimes reading is not enough..its also alot on being able to practise wat u read...and put it to use so u noe how to apply it...thats the prob i'm facing..not too sure bout jerome ....i wanna get started to be able to analyse as well.but hard to find a starting pt..anyone will to shedme some light or offer a direction?? lol ..like join a certain course or buy a certain software etc. my fren recommended me bullfish course..which i'm gonna join juz to catch on the TA part...hopefully i'll be able to discuss some things with u guys soon..=) |
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iPunter
Supreme |
12-Jun-2007 18:09
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j3r0m3... Stock market education is not just a matter of reading posts in a forum, though much beneficial goodness in the form of philosophic wisdom can be found there. The first step is to learn all about the true nature of the stock market, particularly where it relates to the human psychology of stock speculation. Stock market education is best started with books... Treat each book as a different person (author)... Acquire as many books as you can afford... build a solid knowledge base... and you will never want to ask other people again... Here is my Amazon link to:- Some Stock Market Books |
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rogue_trader
Master |
12-Jun-2007 17:59
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alamak, my master elfin had "trained" me to be a killing machine.. jerome, lai... gif me bite u 1 time.. gotta run liao, sian again.. |
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rogue_trader
Master |
12-Jun-2007 17:56
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think my working days looked very bleaked from tomolo onwards... sigh |
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j3r0m3
Veteran |
12-Jun-2007 17:56
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must create multiple streams of income ma... anyway, pay me in the form of education la... I dun take cash from fellowship... So elf, dun set the puppy on me... |
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iPunter
Supreme |
12-Jun-2007 17:53
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j3r9m3... :) |
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