An interesting review, thanks! You say that the financial
fundamentals are horrible. Yet stock valuations are driven by
present fundamentals, which are improving from very bad to worse...
That's the factor that bears refuse to take into account. We had a
market top in October 2007, well into the subprime crisis for those
who knew the truth about the economy. Yet the fundamentals (P/E
ratios, earnings, etc.) were terrific back then. I was much more
naive back then, yet those were my most successful months on the
market of just playing the trend. Yeah, it's stupidly simple.
I am reading "Reminiscences of a stock operator" now. Jesse
Livermore described his mistake of plunging too early on the bear
side -- anticipating a crash -- as having a telescope view on
reality. I am relieved that he too made that mistake. He makes a
very convincing point of not fighting a trend by avoiding the
costliest 1/8th in a trend: the first and the last. That's for a
trader!The last one is no brainer, but the first one is very hard
to resist.
His other point is to take a vacation after a big win: that is,
not to trade the market all the time, only when the conditions are
right. I am thinking of your 4-mile hike idea for the weekend now.
You live up to his wisdom :-))
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An interesting review, thanks! You
Chart of Charts
Posted by junkie on 20th of Dec 2009 at 12:27 am
An interesting review, thanks! You say that the financial fundamentals are horrible. Yet stock valuations are driven by present fundamentals, which are improving from very bad to worse... That's the factor that bears refuse to take into account. We had a market top in October 2007, well into the subprime crisis for those who knew the truth about the economy. Yet the fundamentals (P/E ratios, earnings, etc.) were terrific back then. I was much more naive back then, yet those were my most successful months on the market of just playing the trend. Yeah, it's stupidly simple.
Rejoice in an ability to
Posted by steveo on 20th of Dec 2009 at 01:59 pm
Rejoice in an ability to be a complete idiot at time, and follow the herd, even though you know there is a precipice ahead!
I am reading "Reminiscences of
Posted by junkie on 20th of Dec 2009 at 02:12 pm
I am reading "Reminiscences of a stock operator" now. Jesse Livermore described his mistake of plunging too early on the bear side -- anticipating a crash -- as having a telescope view on reality. I am relieved that he too made that mistake. He makes a very convincing point of not fighting a trend by avoiding the costliest 1/8th in a trend: the first and the last. That's for a trader!The last one is no brainer, but the first one is very hard to resist.
His other point is to take a vacation after a big win: that is, not to trade the market all the time, only when the conditions are right. I am thinking of your 4-mile hike idea for the weekend now. You live up to his wisdom :-))