Articles filed under 'Advice'
My father-in-law is nearing retirement and looking to get into some real estate plays to diversify his investments. I’ve already referred him to The Millionaire Maker: Act, Think, and Make Money the Way the Wealthy Do and Start Late, Finish Rich: A No-Fail Plan for Achieving Financial Freedom at Any Age (Finish Rich Book Series), both great books on general wealth-building.
I was hoping someone out there might point us towards some good online resources though, especially ones dealing with real estate investing in particular. Thanks for the help. If we get some good info, I’ll do a round up later.
Wednesday, Oct. 10, 2007
by Jason
I shorted down a burning ring of fire
I went down down down
And the flames went higher
Fingers crossed.
He should moderate his language, open the possibility of a rate cut, and send the markets higher.
I hope he keeps his mouth closed, talks about inflation and the US dollar, and keeps rates right where they are.
Wishful thinking? Perhaps. However, I just have a vibe that he isn’t the soft touch that people think he is. My impression is that he just might suprise a few people.
Time’s up Bernanke! - are you made of steel or of butter?
Good luck,
Phil
PS In what is becoming a theme, here is another idiot piece by Ben Stein, and here is another piece about bankruptcy and an instant 7000 people out of a job. Of course, you need to make up your own minds.
This post is for entertainment purposes only. No part of this post should be construed to constitute investment advice. The author is not an investment professional and assumes no responsibility for any investment activities you undertake. Prior to undertaking any financial decisions, you should contact an investment professional.
Monday, Aug. 6, 2007
by Phil
So the other day, the big sell off started. And it’s arguable that it’s just beginning. Spurred on by Phil’s post, I considered selling out of everything.
It made sense: I thought everything was going down, so I should sell.
But it also didn’t make sense. One thing I’ve pointed out before is my struggles with trading/investing using so many different strategies. It’s easy to mix them up. That’s why when I make an entry, I need to know what my exit is… and stick to it.
The clearest no-no, which I avoided…
Hey everyone,
We are seeing a nice bounce in the markets this morning. The S&P500 is at 1485 as I write this(!!!). If you look at the 5 day chart, you will see this could take us back to part way through the crash we saw last week. The market is saved!
To me, this feels like a dead cat bounce - one formed by a pump in liquidity and a jump in premarket futures.
Well, I was right (see Wednesday’s post). That at least feels good. However, I thought the market would make a decent recovery. I had raised my limit price to $51.20 (from $50.20) yesterday, realising the recovery was probably not going to be as strong as I wished.
However, when I logged on tonight (it’s after midnight in Australia), SDS had already moved up to $53, and as I watched it shot towards $54. I got out the calculator, changed the volume and bought in just as it crossed $54. As I hit refresh now, it is in the mid $54s, heading back down.
Yes, I’m still an InvestorGeek! It might seem like only Jason and Christian are blogging lately, but I don’t mind being the guest that drops in once in a while. I’m sure many of you have watched or heard of the new Mark Burnett-produced game show called “Are You Smarter Than A 5th Grader“. If not, you can read a quick description here.
I was inspired after reading Canadian blogger, Tony Hung’s short diatribe on who’s really smarter - the kids or the adults? Tony, if you don’t know, is an editor at the prominent new media site, BlogHerald. I’ve had the privilege to meet him, and trust me, he’s one smart dude! But I digressed since the question remains, who ARE the smart ones? What does it mean to be smart? Is it just about random trivia or knowledge? After all, adults were able to create a show like that to make money! Aha…. now that money comes into play, that’s my lame segway to discussing financial smarts! (more…)
Saturday, Mar. 3, 2007
by Vince
I wrote an earlier comment about Microsoft and the Daily Show and how Bill Gates seems to have changed. David commented and I read his story about what he believes will happen regarding Vista.
Many people think it is about Google and Apple. I completely disagree! Google will be Google, but this is as good as it is going to get for Google, likewise for Apple, and for many other software companies. Though I do think Microsoft will surge in this market, which of course may seem counter-intuitive.
People are always interested in the next 10 bagger. I think the next 10 bagger will not be a You-Tube, MySpace or Google type company. The next 10 bagger is going to be a company that has a hardware and software play. For example, look at the Wii. It is taking the market by storm because it is new, refreshing and a hardware / software play. When I saw the Wii for the first time I thought, yupe this thing is going sky high!
When I saw the Apple iPhone I did not see a Wii. When I see Google I see rehashed ideas. For example I love news.google.com, but that idea is getting old. When I see Microsoft I see a utility company, but a company that will be here for decades to come.
I am watching the markets and thinking is this the pullback? Two days don’t make a trend, but I was looking at the DJI and noticed something interesting. For the past month approx 12,670 has been a sort of resistance point. The market has taken 7 runs to 12,670 and only once did it get over to 12,674 before sliding back.
Looking at the charts for the past bull run it usually takes about a month to move past resistance points. The market has moved sideways for better part of January and part of December, thus I wonder. If we get past the resistance point by the end of next week all should be ok. BUT, if we can’t get to 12,700 I think we might be in for quite a bit pullback…
Hmm, maybe we all should lock into a bit of profit?
Friday, Jan. 26, 2007
by Christian
I am studying financial engineering and there has been one topic that has been bothering me; Probability.
Here is a question I found at the quant forum.
If a family has two children and there is a boy in the family, what is the probability that there is a girl?
What’s the answer? 2/3.
Or how about coin flipping?
What’s the probability of getting 5 heads in a row before getting 2 tails in a row? fairness is assumed.
What’s the answer? 3/34.
I don’t agree with the answers. Ok, let me reiterate this clearly I don’t agree with the mathematics that came up with the answer. To me calculating the odds using this type of probability is nothing more than a mental game.
Here are some interesting facts. With respect to the children did you know that there is a bias towards having more males born than female? And with respect to the coin flipping did you know that there is a bias towards the coin landing on the same face that it started? If you read the article there is 5% more males than females and 1% bias towards a coin flip.
I even argue if you could perform the coin flipping experiment in a vaccum under controlled circumstances then the 50/50 probability theory would fall flat on its face. What you should notice is that often when problems involving coin tosses are created they say the coin toss is fair. In other words you are jigging the conditions to get the response you want. Very few times in reality have I been able to say “fair conditions.”
I am a bigger fan of the scientific method and statistical probability. The math differences between theoretical probability and statistical probability is quite a bit. With statistical probability your main concern is about figuring out whether or not your experiments are consistent and whether or not they have a bias in them.
I especially like the following comment from the scientific method HTML page:
Statistics: How much of a difference is really a difference? If you flipped a coin 100 times, it should turn up heads half the time and tails the other half. However, it seldom actually turns out this way. If a person claimed to have psychokinesis (the ability of the mind to directly effect matter) and attempts to use the power of their mind to control the toss of a coin to make it turn up heads, would you conclude that they really could control the coin toss if they tossed it 100 times and it came up heads 51 times and tails only 49? What if it turned up heads 60 times and tails 40 times? What if it turned up heads 90 times and tails only 10? All of these outcomes could occur by chance. To determine what that chance is, scientist use statistics.
If something can occur one time in 55 million, it probably will. This is the probability that a person will win the Power Ball. Over time, one ticket in 55 million will win the Power Ball. If a scientist is conducting an experiment and the results can turn out a certain way one time in 55 million, it just might occur. Repeating the experiment will show if the results you obtained were just lucky results. Statistics will also show this.
For the past several months I have been writing my own trading software and I very quickly realized what works and did not work. I found it out by trial and error, but much of what I learned by stumbling around is written in the book Evidence-Based Technical Analysis.
The book helped me express my thoughts in my software in a structured manner. I knew that probability and the classical mathematics were not working. And I knew that I had to use statistics, but I kept bumping into a wall when I tried to put everything together. Reading this book with the following other books will help you get an overview of the maths; Options, Futures, and Other Derivatives, and Inside Volatility Arbitrage.
I recommend Evidence-Based Technical Analysis for anybody who is writing software that helps you trade.
Friday, Jan. 26, 2007
by Christian
