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HLJHLJ
I 100% agree with u bt there are ppl we try to save them bt they just cannot listen.
Share mkt is an up and down thing.Wat the trader is doing is that they are trying to time the market.And of course they fail.
Thus u find alot of these traders losing $$$ and trying to buy books and attend seminars to help them win.It oni benefit the book salesmen,writers and publishers.
The successful things in life are just simple things that do not need TA skill or FA skill etc........ etc...etc..
Livermore ( Date: 15-Sep-2008 12:45) Posted:
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HLJHLJ ( Date: 15-Sep-2008 10:15) Posted:
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If you try a strategy and it is a wrong one, one needs to analyse what went wrong and change accordingly. Consistent application of a wrong strategy will lead to consistent losses.
Eh. I meant chosen strat that works for you. for those who've been around, their strats are tried and proven already, and more often than not, losses result because one deviates from the strat.
There is also a need to keep longsighted. HLJ pointed out rightly: paper loss may not always be paper loss. it all depends on how well you've researched your FA counter*. The fact remains that 95% of all traders lose. For retailers without much technical skills and sources of news, frankly, i advocate going longterm (longterm trading, or FA holding).
Overtrading dilutes profit.
*having said that: there's also a need to realise that very few counters here can be considered to be solid FA counters. Even with this fall, few of the blues are at or below their NAV. ie strictly speaking, by FA terms, they are still expensive. Oh, and china and CPO plays are NOT value counters. They are growth stocks.
cheers!
Yes indeed paper loss is real. However, with proper financial,risk management, porfolio selection and allocation, then paper loss is just on paper only. If we stick to good ones, with long term perspective in mind, it will bounce back again to become paper gain again.
In this perpective, paper loss/gain are just on paper only until we have realised it by selling.
Somehow, many of us couldn't take paper loss because of high commitment. Most of us tend to commit about 80% of what we have to investment, property. That's why, we feel that paper loss is real loss because we must realise it soon to raise money.
However, if you look at a scenario of put smaller percentage for investment, then who cares what paper loss because we don't need the money!
Just my thought only.
The flip side of 'paper loss' is real gain for all those who have bought but dumped quickly at the very high prices.
For example:-
sold SGX on the downtrend rebound @15.7,
sold Rotary on the downtrend rebound @1.33... and many others, only a few short months back.
Many, many stocks are now only at fraction of the price a few months back...
This is undeniably due to the 'hot frogs effect'... 
Livermore - I fully agree with you about the delusional concept of paper loss. Paper loss is real loss since you would not have incured that loss if you did not buy that piece of paper in the first place.
If you have bought Creative at $45 or Chartered Semicon at $15++ can you realistically call your $40 and $15 respective losses as paper losses only. As though if you hold it long enough - the paper losses will disappear and you will get back your your full $45 and $15.
Well whatever that makes one happy .... to each his own. If clinging on to the concept of paper loss makes them happy.
Livermore ( Date: 14-Sep-2008 21:30) Posted:
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Hi SF,
Yes, it is good to discuss though it may seem like we are arguingJ. I wrote a reply earlier and all lost. *Sigh*. Let me try to remember what I wrote. As Elf mentioned some are good traders and some are not. Ultimately it still goes back to money management.
One year ago, I knew one of my colleague was trading heavily. He was into penny counters like Baker Tech (forgot the spelling). I told him to be careful. From my experience, sometimes when you trade too much without proper money management or risk profile, your losses increase very fast. My colleague was trading like 100 lots of these penny counters. In the end, he lost about $50k after so much trading. Thus to a certain extent, you are right about too much trading of too many stocks without proper money management can lead to quick losses. But some other people can trade a few counters and still do very well.
SF, some of the high beta stocks have reported good results last year and this year, and better than your traditional blue chips like SIA. But what has happened? They still got “whacked down”.
What is the point of getting dividend if you have a huge paper loss? Do you want to get a $500 dividend and incur a $5k paper loss?
Elf, your point about “consistent application of the chosen strategy”
. If you try a strategy and it is a wrong one, one needs to analyse what went wrong and change accordingly. Consistent application of a wrong strategy will lead to consistent losses.
If you watch Money Mind, you would remember that a few months back, fund managers were giving advise to pick up counters for long term. Sometimes you pick up but if it is a wrong decision, it might be a better option to cut loss and protect your capital. This point can be highly debatable among many. But a few months ago until now, some stocks have fallen a lot.
Paper loss is a loss. It is as black and white. But some may not see it that way. It is a dangerous mindset. Things get ugly when the paper losses grow bigger and bigger.
All the best!
It is true that there is no one method of trading or investment.
To each his own.
Bt i think having a good discussion is one way one can learn from each other.
Livermore,those who truely invest will pick those counters that have sustained dividends payout,unlike china counters.Thus,they too get upset when they see the px of their counters fall bt at least they have dividends which is better than FD rate anyway.
Chances of those who trade will pick high beta counters and thus now they are holding on to them and have no returns of any kind.
with regards to the livermore/stupidfool debate:
trading or investing, there's no one wrong way, one right way. lots of traders have made it; lots have failed. lots of investors have made it, lots have failed.
what is needed is the consistent application of the chosen strategy.
Evidence in the end is borne out by the portfolio. Hard dollars and cents. the rest is merely rhetorical debate.
A real winner with his/her own strat will not feel the need to "defend" his/her method in public, or to argue about it. Quite simply: if it works, it works. Far better then to just lay it out for others to see, and let them tweak as suitable, adapt as necessary to their OWN styles.
I hold only one belief: no one method is superior to the next. It all depends on the person, the personality, and the right application of the method.
As a wise friend once taught me, "Just because the ground isn't good for one kind of flower, doesn't mean it's bad for all flowers."
Cheers!
hm. for the record, Jim Rogers is actually not highly regarded in the trading markets. He made notable bad decisions including the decision to hold on and further buy china, to buy the USD (when it tanked versus the Euro) and to long commods (when it was at the peak).
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o/w: headsup. rumor or not, forewarned is forearmed:
A PDF version of this report with graphs is available for free at the Forex Datasource Blog: http://www.forexdatasource.com/Blog/fxblog.aspx
EURO Report
Current Environment
The hasty nationalization of Fannie Mae and Freddy Mac last weekend was initially well received, but investor fear is back and threatens to unravel USD gains of recent weeks. There are short term factors lending support to the euro, such as crude oil price rises (Hurricane Ike and surprise OPEC production cuts). Then there are more serious fears the market is considering. The rapid rise of US unemployment on Sep 5 along with weak US retail sales last week raise fears that a consumer recession is underway, something that could have longer and deeper implications than recent recessions caused by monetary policy tightening.
This time around the Fed and the US Treasury have apparently exhausted measures to solve multiple crises. A deep recession could lead to many banks and companies failing. Besides Lehman, the market is already starting to assume that Merrill Lynch and insurance giant AIG will be next. There are, however, not many strong companies able and willing to purchase these firms.
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cheers!
Hi SF,
Those investing but see their counters falling are not upset? When paper loss gets bigger and bigger, they are still not upset because they are looking at long term?
stupidfool ( Date: 14-Sep-2008 16:26) Posted:
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When a person trade in shares,his objective is to buy low and sell high or vice versa.
Is it possible to sustain in the long run?The answer is of course not.
Thus many ppl trading in shares are caught and many traders are very unhappy ppl rite now.
And they start to get more upset everyday when they see their counters falling everyday.
So the way to go is INVEST in shares rather than TRADE in shares.
Livermore ( Date: 14-Sep-2008 15:47) Posted:
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Look after yourselves for not buying stocks in relief rally after the Lehman Brothers rescue plan. This likely to be another bear trap.
http://investsgx.blogspot.com/2008/09/game-plan.html
The market is still very weak now.
Hi SF,
What do you mean by this? "Thus trading in shares or trying to buy low and sell out b4 the crash is not the way to go." Do you mean even if you know crash is coming, still hold onto to stocks for long term?
Frankly there is nothing wrong with China stocks. Just one bad apple like China Aviation Oil and the stain seems to have stayed with the rest of China stocks.
stupidfool ( Date: 14-Sep-2008 15:40) Posted:
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Spoke to friends or friends of friends and sad to hear many lost $$$ while doing trading in shares.
Also,some still holding on to high beta counters(china shares) and hope for it to recover.They have no choice bt hold on cos they lost too much if they sell.And these are the counters they do not want to hold for long term in the first place.
Thus trading in shares or trying to buy low and sell out b4 the crash is not the way to go.
Told them to invest in counters that are for long term investment and not to buy those high beta counters.
