Ok here are some screenshots of today's action on my live account positions taken a moment ago, not sim bs. Small caps Slightly larger caps And larger cap again.
These are stocks on my wish list, some I already hold and just want to add to, I await these on substantial pullbacks, months if needs be for these to come back to trend support, all are ASX. Sorted by % gain/loss for the day.
Right, so instead of trading you choose to invest and believe you can get a better return on your investment than a mutual fund. Ok, why not.
For this year financial thats just been, (ending 30th June) I'm lagging but that's a result of me making a dumb move of loading up too much on gold, however, thems how the cookie crumbles. Gold has been a very bad puppy last year or more. But this is kind of irrelevent question because next week I may be beating the index. The previous year I beat the index. I wouldn't want to buy a mutual fund or index ETF for example. I prefer to be involved in DIY trading/investing, just way more interesting, more to learn.
Yes, agree somewhere deep i think of that tooo its like flipping the script of everything you ever learnt Most of the time that you notice on a subconscious level that the sure bets do fail and the doubtful ones hit a big but your mind is fixated to believing its just probability
The market is very close to a meltdown, it may even happen this week or early next. Hang onto your hats, high volatility dead ahead. But knowing the Fed........they will save the markets?
Thought to drop into this thread, reasonably interesting.... Magellan’s Hamish Douglass on the fight of his career as markets turn against him By Anne Hyland December 4, 2021 Hamish Douglass fasts for 16 hours every day. His daily exercise routine is a cardio workout that also includes planking non-stop for 20 minutes. He planks because for half of his life he had a bad back, and keeping his core strong is the one thing that helps. Some years ago Douglass, had a laminectomy, a common major surgical procedure that removes part or all of the vertebral bone to ease the pressure on the spinal cord or nerve roots. Douglass, who admits that he looks older than his 53 years - he smiles and says that it’s the lack of hair - is the fittest and healthiest he’s been in a long time, which is important. Douglass, the chairman and chief investment officer of Magellan Financial Group, is in the toughest fight of his career....... Read full article
https://www.afr.com/markets/equity-...ost-finance-research-is-phony-20211206-p59f28 Opinion There’s one reason why most finance research is phony It’s been estimated half the market-beating strategies in leading journals are duds, but it’s only human to construct narratives around events that are random. Matthew Brooker Dec 6, 2021 Finance research is in a difficult moment, after one influential professor estimated that half the market-beating strategies published in leading journals are duds. The academics shouldn’t be too hard on themselves. It’s only human to see patterns and construct narratives around events that are essentially random – as journalists, among others, know only too well. The doubts swirling around academic finance mirror a broader “replication crisis” in scientific research that dates back to the mid-2000s. If a study’s findings are valid, other researchers should be able to duplicate them. In fields including psychology and medicine, it turns out that many papers don’t pass the test. The same scrutiny applied to financial research has been no less forgiving. “Our field is not ‘special’ compared to other fields and does not warrant a free pass,” Campbell Harvey, a professor at Duke University and former editor of the top-tier Journal of Finance, wrote in a paper this August titled “Be Skeptical of Asset Management Research”. He concludes that half the empirical research findings in finance – numbering more than 400 supposedly market-beating factors – are false. Harvey, who is also an adviser to asset-management companies including Research Affiliates, pins the blame on the distorting power of incentives. Authors need to publish to be promoted, tenured and paid more. That encourages them to tweak their choices around data and methodology to produce eye-catching findings that pass the test of statistical significance – a practice known as “p-hacking” in the jargon of statisticians. A result that is statistically significant isn’t necessarily meaningful or reliable. The p-value, with a common threshold for significance being 0.05, merely describes the probability of a result happening by chance. The more you test and tweak your variables, the greater the likelihood you will eventually produce a finding that looks convincing but is actually just a fluke. In a 2015 article, FiveThirtyEight carried an interactive graphic that vividly demonstrated the absurdity of the p-hacking business. The chart examines the question of whether the US economy performs better when Republicans or Democrats are in power, using data going back to 1948. The joke is that readers can produce a statistically significant result (to a p-value of 0.05, enough for inclusion in an academic journal) showing that either hypothesis is correct, depending on which variables they select. Academics can game the system, then, and indeed many of the practices that fall under the rubric of p-hacking qualify as research misconduct, according to Harvey. There may be a more benign explanation in at least some cases, though. It’s possible, and in fact quite likely, that finance researchers believe in their theories and advance them in good faith; they’re just misled by their fallible human brains. There are strong evolutionary reasons for this We are hard-wired to see patterns, build stories and find causal relationships in our environment. There are strong evolutionary reasons for this. It’s a complex world out there, and humans are deluged with haphazard and indiscriminate information. Recognising patterns from incomplete data is a way of simplifying our habitat, making it manageable – and sometimes staying alive. Imagine a gazelle in the savanna. It hears a rustling in the grass, and flees. It’s only the wind. Inaccurate pattern recognition has caused it to mistake the sound for a cheetah. Still, this gazelle is going to survive longer than one that hasn’t learned to run when the grass rustles. The downside of seeing a pattern that isn’t there is drastically less than the consequence of not seeing a pattern that is there. Harvey himself is hardly indifferent to the evolutionary argument (the gazelle example comes from one of his keynote speeches). He uses it as an example of why finance research turns up so many factors that don’t work: We have an evolutionary disposition towards errors that are false positive (Type I in the statistics jargon), rather than false negative (Type II). Nassim Nicholas Taleb wrote a whole book about the phenomenon. In Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets, he tartly criticised the tendency of financial journalists to offer causal explanations for market moves that were in essence simply noise. While statistically robust, Taleb’s critique lacks a practical appreciation of the evolutionary imperatives facing real-time financial news reporters, who might not have jobs for long if all they can write is that the market made an insignificant move for no reason. Human beings tell stories because, among other reasons, they are an effective way to simplify the world and share knowledge within our ultra-social species. Any narrative constructed under time pressure is inevitably an approximation using the best knowledge now available, and can be expected to be refined as more becomes known. But if the first drafters of history deserve some slack, then surely academic researchers who are subject to far greater rigor have no such excuse? Why you should be celebrating the news Not really. There may be a crisis in the quality of academic finance research (Harvey’s contention is disputed by some) but this is not demonstrated unequivocally by the fact that many findings fail to hold up. Science doesn’t proceed by establishing unchallengeable truths and certainties, but by repeatedly overturning itself. Any hypothesis is provisional, accepted as correct only until a better one comes along with superior explanatory and predictive power. As the physicist Richard Feynman said: “We are trying to prove ourselves wrong as quickly as possible, because only in that way can we find progress.” In that light, the revelation that so many finance research findings are phony should be cause for celebration. We’re now, as a result, smarter about markets than we were before they were disproved. Consumers of studies on how to beat the market have a powerful interest in advancing this process. If a strategy doesn’t work, they’re going to lose money. As incentives go, that’s a big one. Meanwhile, Harvey’s advice on asset management research is probably sound. Be sceptical. Matthew Brooker is a columnist and editor with Bloomberg Opinion. He previously was a columnist, editor and bureau chief for Bloomberg News. Before joining Bloomberg, he worked for the South China Morning Post. He is a CFA charterholder. Bloomberg Opinion
https://www.smh.com.au/business/mar...s-is-that-everyone-loses-20211208-p59fp0.html Opinion The ugly truth about market bubbles is that everyone loses By Kevin Muir December 9, 2021 I was chatting a few days ago with one of the smartest hedge fund managers I know. We were talking about the recent carnage in unprofitable tech “dream” stocks, and he reminded me of a time many have forgotten. “From 1995 to 2000, I watched some of the shrewdest managers get annihilated shorting the dot-com bubble,” he said. “By the end, they all went out of business. I then watched the next five years destroy all the long managers who had ridden the euphoria to the upside, until most of the aggressive ones were also sent packing.” The bears are inevitably too early, and by the time the market rolls over, the vast majority have given up. The bulls, who have been conditioned to buy every dip, stay at the party much too late.Credit:Richard Drew\AP In hindsight, bubbles always seem obvious and easy to trade. As someone who has experienced more of these than I care to remember, I assure you they are not. Take the mid-2000s real estate episode. With movies such as the Big Short, and glowing newspaper articles about hedge fund managers who made fortunes profiting from the real estate collapse, it seems like opportunity was everywhere. What we forget is that these trades were successful because so few believed they could happen. I can’t tell you the number of times a young trader tells me, “I wish I had been around back then, ’cause I would have made a killing!” What they don’t understand is that, in the moment, bubbles are extremely difficult to identify. They are even tougher to trade. I’ll never forget trying to take advantage of the real estate mania in 2005. I thought the sector was wildly overpriced. That February, when it appeared the homebuilders had topped and started to roll over, I shorted a basket of homebuilder stocks. The trade worked until April. Then, much to the surprise of the bears, homebuilder shares ripped higher by 35 per cent in the space of two months, and I got shaken out of my short positions. The ugly truth about bubbles is that both the bears and the bulls end up losing. The bears are inevitably too early, and by the time the market rolls over, the vast majority have given up. The bulls, who have been conditioned to buy every dip, stay at the party much too late. Bubbles used to be rare and encompass entire asset classes. But markets have evolved. Even back almost a decade ago it wasn’t hard to see how the proliferation of hedge funds had decreased the amount of available “alpha,” creating an environment prone to a series of rolling mini-bubbles. As sophisticated investors deployed capital into themes or sectors, the price action encouraged momentum-chasers. This affirmed the belief that the fundamental investors were on to something, causing more buying and resulting in a positive feedback loop. Then COVID-19 hit and mini-bubbles became perversely extreme. At the March 2020 crisis bottom, the Goldman Sachs Non-Profitable Technology Index had fallen 40 per cent, attracting short sellers. Then, over the summer, the basket of shares rallied 38 per cent and financial airwaves were filled with gurus like Chamath Palihapitiya and Cathie Wood espousing the virtues of these new technology marvels. And, just like previous bubbles, even the sceptics eventually feared shorting due to the violent rallies. Some 11 months later, this group of stocks had risen an astonishing 478 per cent. And yet, here we are. The index has declined 41 per cent from the 2021 high. Surely, there are individual “rock star” investors who made money, but as a group, both the bulls and bears have been beaten up. Most of the vocal bears have stopped forecasting a decline, while the majority of bulls remain long even though many are now underwater on their trades. I don’t know the direction of this sector over the short-run, but experience tells me it is a painful bear market with face-ripping rallies that lure bulls back in and forces bears to cover their bets before it resumes its relentless march lower. Years from now, with the benefit of hindsight, it will seem obvious these stocks were wildly overvalued. The few investors smart enough to get out at the top, or lean into the short side on the way down, will be celebrated. It will all seem so easy. Yet, in the midst of the actual event, it is anything but. Bloomberg