We do not. By definition, most people are wrong at the market`s turning points. When everybody tries to get on the same side of a bear market, the result is a huge sell off. We are not there yet. I would not be surprised to see the Dow re-test its Sepetember, 2001 lows before bouncing back.
"But reat assured, the boys controling the up and down switch will not let them make money. " I'd like to know if the majority of traders and investors REALLY have some substantiating evidence of this...or do just a certain few believe this? It sounds a bit paranoid to me...but i'm new at this. (keeping my job for now) That aside, I have enjoyed reading all your posts. I hope you don't run me off....I started out with the intent of being a trader and my initial buys ...well, I suppose I am now technically an investor. I still have my first purchases. Being wrong isn't ALWAYS a bad thing. I thought the prices would double and I would sell, take a breather, buy again. They did--I didn't. I still have them. I bought in the two dollar range of undervalued micro caps because my beginning capital was limited to 3 grand. I have all my eggs in one basket--so to speak--But I'm WATCHING that basket. My portfolio is now just under 18 grand and I'm still intent on "trading." But, I really do want to know...is there really someone so powerful as to run the market and keep us "newbies" from making money? Tee-hee
There is no secret society killing the public. The usual suspects are more than enough to do them in. Irrational decisions, poor preparation, in too late, in too long, too much leverage and ignorance, not enough capital or common sense, death by commission, death by fees, death by the spread. When the public plays the market, they are like amateurs sitting down with professionals at a poker game. Transaction costs are the ante. The players make the pot. When it's hackers and dabblers vs. seasoned pros, who do you expect to lose their shirt?
Stockrock, without going into the gory details of my crash and burn with leaps to ruin a weekend why not SELL the 900 or 1000 puts on the SPX. This creates a similar although somewhat riskier option on the play. The advantage is that the market could go nowhere and you still make money. If it goes down you buy at a lower price two years into the future. Of course the risk is that it keeps going down, but you could put a floor on that by buying a lower strike put. Run the numbers, but for my dollar I would much rather sell the lottery machines than buy the tickets.
well said dark horse. I really agree with that quote and it's at the core of my trading philosophy - self confidence. as far as the crowd always being wrong, I beleive it. Heres why: theres a winner and a loser for every trade. all the smart money belongs to a few wealthy people. all the dumb money belongs to the "crowd". The wealthy people make the market and take the crowds money. Every once in a while, theres a change of status.... ie one of the wealthy takes a blow. This is just my opinion tho, not really of any importance in trading or life.
One thing I will toss out that occurred to me over the past two years in some of my contrarian type plays is to have those plays produce income of some sort while I am waiting. On another thread a member talked about how he bought fixer up properties, rented them and let them appreciate. In the 90s while working I would buy cheap, average down, and wait. Worked pretty well then, but now?? It would seem that short of fading a gap most contrarian strategies are longer term in nature. My version of "rental properties" was to buy junk bond funds as they sold off over the past week. Maybe 1% of my entire portfolio. If they rally 10-20% maybe I will sell out, but if it takes 10 years I collect the "rents" each month. In this market/environment I like to know I get something while I wait. The point if I did have one is there are a lot of "contrarian" type plays that don't involve tech that pay dividends which are better than a money market while waiting for the market to turn. If we turn down anther 10% they will drop more than the dividend %, but so will something that doesn't pay a div. Night All
Yes, there really is!!! If you want to find out who it is, just find a gal named Dorothy that travels with a lion, a tinman and a scarecrow. They will lead you to this nefarious dude and his big up/down switch ps:could be a long trip....bring a portable cd player.....Pink Floyd seems to work for this one...been there, done it, the dude is a little twerpy, but that big switch....really an impressive set up. The ultimate trading machine. (I think it's a modified Bloomberg terminal turbocharged and runs on nitrous oxide fuel...does wheelies in 6 gears).
"When it's hackers and dabblers vs. seasoned pros, who do you expect to lose their shirt?" Okay Dark Horse, point taken. Well Taken. But I don't agree that just because someone is a "newbie" they are a dabbler or a hacker. I spent the first year in the market (4-6 hours per day and entire weekends) just watching and studying and analysing and "pretend" trading/investing--and when I felt confident that these experiences --along with the book knowledge I am learning in college--allowed me to apply some sound principles...only then did I begin. I hope you are talking about the people that think this is easy and don't put the required energy and effort into discovering the essential elements. They don't love what they are doing. They don't eat and breath and sleep this stuff. I'm not a seasoned pro but I will not lose my shirt because I am confident in my ability to protect my capital. I eat and breathe and sleep this stuff and I LOVE it. It still troubles me to see supposedly seasoned professionals imagining there is some force to be reckoned with in the markets--other than themselves.