Discussion in 'Shares' started by Tropo, 22nd May, 2011.
DOW v XJO ...
Monthly DOW v XJO
Aussie market players still worry about where EU and China go. Aussie market players have decoupled from any good things but bad imagination now!
No bloods in Aussie economies in GFC and even in this existing contrition war, but we just replay what happened in US first, EU later, and now what they imaged blood shedding in China and Australia in very near future.
It is always true what you want badly usually is what you get!
In a tiny market and the break down of the myth of decoupling of world economy from Western World, all fail to know where Aussie market will go. After we were painful to cry in ruins for nearly a year, we need all go up first and then dare to follow! It usually means too late to do!
It is not bad for Australia economies as a whole but very bad for the warriors who struggled in the contrition war for months if not years. Tiny economies act as my dirty-cheap fishes. They crash down to ground quickly at first and move up very slowly and often happen after new cakes could be seen in the air.
Bad would be replaced by some good at last. Do you have your defensive line for your holding. The cold time usually is not in the deep Winter but at its very beginning or the spring in Siberia.
Happy to see Aussies are in struggle and US lead the ways to recover. EU, China, and BRICS need the time to get out of the ruins by the shocking from US. Happy I chose a strategic position: building my last defensive line. If you are safe you could wait for the Summer comes in.
Really hope new cakes could be in the sky very soon, believe it will be there, but don't have the vision to know when they could be hung in the sky! What should I do if the new cakes would be in the sky again? I would lock the profit and wait for the next crash!
It would repeat always even we don't know when it does so. So that someones said it would happen every a few years!
Do you know what it is here? No? You are stupid and hopeless as a market dog even you could be very smart and skillful for your salary or enjoy to put your pensions into the market as a lot of Chinese put their money into Casino!
When do you hold, run away, or rush into a table for a high probability you could win rather than lose?
Never and ever buy when you should sell and never and ever sell when you should buy! How could you define the time to buy and sell? A challenge few could deal with wisely enough! Without matter you like or not to gamble you have to get this task done right as the song, "the gamblers" said.
Market crowd would be surprised to know something when it is too late for them. The poor always fail and is surprised in the market too and become poorer! A man who could not get enough profit but losses, would not get rich from his job usually too!
The DOW is trending up based upon increased positive sentiment in the US about the US economy improving. Unfortunately for Australian investors it seems that the All Ords is marking time will be doing that for sometime due to growing concern about the state of the Chinese economy, fears of interest rates rises and fears of a local recession.
US led the world for decades. Australia worries its leadership for years.
It has accepted the theory that the global economies have been decoupled from the advanced economies but GFC made it worries what if China tips off too.
Australia is a small economy and it could not set its course let alone the world. It cautiously has moved forward with a very cautious RBA and highly advanced and cautious financial system. That is not bad news to Australia as a whole but let the Aussie market players in the ruins feel very painful.
They hope the price could rise every month if not every day. However it is impossible. Do you know this impossibility?
Following DOW? No one are sure where China goes. China seems unable to decouple itself from bad things in this world. How about EU? It was in trouble now!
So Aussie market losers have no choices except assuming the GFCII would be in course after they felt things were excellent again at the beginning last year. However EU and China let their disappointed first and then became depressed.
It acted much quicker and heavier for any bad news from anywhere such as that in August 2011, when it crashed itself to 3800 and handed back all of premium from resource booming.
Felt confused for a quite long time. Aussie has resources. Its economies sound very good. It should not wipe out all in the price for the premiums from the resource booming.
However from the long historical chart, it seemed evident Aussie has been very cautious for the external and internal insanities for long time.
It refused to follow IT booming. It jumped cheerfully for resource booming but crashed itself also so dramatically. It is its behavior characteristics and you have to know it very well.
Why so many Aussie market players lost the shirts, and jumped back at the peak of V-shape recovery and lost the shirts again.
Among a gut-less crowd in XAO, you have to be more cautious, don't allow your mind too hot or too cold, and learn to protect yourself more effectively.
What if no GFCII, it is still OK for XAO to wipe out its value since the meat is in its pan.
It would follow the historical average rate to recovery without matter what happen today. What about the individual market players? They should be consumed and they are the base for the collective steady movement for XAO.
How many losers have been wiped out in this market? Have you found your corners to wait for XAO moves upward toward its historical average line?
It is natural for the crowd to feel fearful after they have beaten by the market again and again. Most of these losers would see the train leaving without them. They could contribute or consumed but they could not take any profit for long enough time since they have not the mind to think.
Train would leave without them, which is their fate without matter how they thought they are experienced and skillful to stop-losses, since they are gutless and fearful losers.
How about myself? If I could not update my mental framework and know XAO good enough, I would be one of losers too. How about you? You will be the same. Why? We are human!
What's your intention in the market?
What's the possible deviation the consequence would be from your action and behavior in the market?
What's the causes for the possible deviation?
What's the consequence: hazards or operational difficulty for your life or family from your actions or behaviors?
What could be the safeguards for the hazards or difficulties?
What are the corrective actions you could take?
I think it could be more simply explained but the depreciation of the USD v AUD over the last 5 year period.
The XJO may be flat in AUD terms, but to a USD investor if they had bought in anytime in the last 3 years they'd be better off once the exchange was factored.
It is important to know what are the causes and effects. Did the exchange rate cause that XAO led the world for a assumed GFCII in August 2011 or something very fundamentally in Australia cause the appreciation, and then this exchange rate works on the economies?
Floating exchange rate is a effective facility or feedback to get economies move forward in balance, which has played a part for Australia not to see recession for quite long time. It also forces the fund move into the fields which could play them economically.
However it has negative effects to economies especially market players too. Exchange rate could be up or down and actually it is usually changed based on the prediction or assumption where economies will move to. It would stir the excessive fears or cheers at extreme time.
Ideally the exchange rate changes and XAO doesn't crash at least or better every market player could get the return at least not worse than the bank deposit rate if the system is perfect. All of forces in the market tend to be cheered or feared at the same time and make fear or cheer are excessive overflow in the market.
Were the Australia economies so bad and was exchange rate so high for Australia to worry its future day and night and had to led the assumed GFCII? Every simple things in market has complicated background, context and condition, and complicated action and reaction plus the unavoidable excessive exaggeration positively and negatively.
The crowd tends to use the cake in sky and the bloods in the ruins to guide their market practice. It could give the reasons true or false for what has been happened. In 2008, we had the cake in the sky, the decoupling and Aussie economies would not be affected by the stupid Western economies. In 2011-2012, we have bloody floating exchange to drag us in the ruins!
No brain and too simple explanation plus the blind belief of the cakes and bloods time by time are the root reasons why most of market players sold on the fire and bought at peak.
Don't try to make a member of crowd to be thoughtful, which would not work until he does want to change! The best medicine for the member of the crowd is that Mr Market takes his money away again and again until he feels shocked and have to make a tough decision: Change or leave or sit at the sideline to twist the words.
Me? I would make more human errors but I want to invert and out of my box in an crowded place slowly but resolutely.
You could not follow the people who have no brain to question, and never think anything enough but tend to believe they are best! I was a kind of these brainless people but I don't want to be so any more.
Don't be serious for my tough words to market players and feel upset. All of words are about myself too. It is my market views, the importance of crowd psychology and behavior in your mind, and the critical effects of the reaction or response from market players to their market records only.
We could ignore each other, but please don't ignore the malfunctions in your brains. Don't forget everything and all of the systems are tools and they at last have to answer a very simple question:
Could you make any money as a market player with some simple or complicated tools? If you could not make any money could you be sure never lose the unaffordable money without matter XAO does boom or bust? It is usually wiser if you choose simple tools and lower your expectation.
Fortune needs gut, luck, vision, skill, and complicated and integrated systems. Never lose the shirts need the self and environment awareness. You are fearful to play the fire and have no skills to protect you, right? You could choose not to play the fire, couldn't you?
TOO SIMPLE TO ANSWER EASILY AND CHEERFULLY!
Most of losers lose the money because they could not get the simple answers right! We tend to be insane and use one edge of the sword at wrong time and allow another edge to cut the money away at another time.
Safety and your jobs in market
We are all fearful when the situation is out of control, hazard happens, or the consequences is horrible financially in the market.
Fear is natural reaction for anyone who have lost the shirts or too much. However we should know that what you do after you are fearful differentiates the winners and losers in future. We all need to feel safe and be sure safe.
Give up to touch affordable risks or play the risks and let them affordable or repeat our insanity to lose the shirts again and again. Who could get good enough life in the seamless fears in his life?
We need the last defensive line or protection layers which exist concurrently with the normal or extreme market time. Do you know safety can be defined as “freedom from unacceptable risk” or "never lose unaffordable capital?"
You need the risks and need the affordability for the risks since you could not get any return from an risk-free life. This definition is important to anyone who plays in the market. It is because it highlights the fact that all market practices or processes involve risk. Absolute safety, where risk is completely eliminated, can never be achieved; risk can only be reduced to an acceptable level.
Therefore all risks should be dealt with on the ALARP basis, i.e. the target is to ensure that risk is reduced to As Low As Reasonably Practicable. You must learn not to be fearful in risks and have the skills and mental framework to make all of risks in your hands affordable.
Safety Methods employed to protect against or mitigate harm/damage to your capital, family, and your future. Reduce risk include:
• Changing the process or redesign your mental framework and the ways of your portfolio management. You have to be sure you are safe for each buying and selling.
That means each of them must be affordable and the portfolio as a whole must be safe under any conditions and context.
What're the conditions and contexts which would make the emergency for your capital? What could stop you to sell on the fire? No one wants to sell on fire but sometimes you have no any other better choices since you have to do so for survival.
• Increasing integrity of your mental framework and the market environment.
All of us have our own views about the market and what we should do in the market. However what you do would set the tone about what your capital would do for you.
Good mind make small money become fortune. Bad mind and behavior destroy the capital. A mountain could be wiped at some times and position if some natural forces are strong enough.
There are always gaps between our imaginary and real world. Could you identify this gap and use some protective layers to fill it and let you always safe. If you are safe in the storm and crashes you don't need to be fearful.
• Improving the Basic Process System for buying with enough margin of safety or intelligence system to identify the hazard so that you could sell before the market crash or at least protect or mitigate the consequences of hazard.
Basic process means procedure to put disciplines on your market playing. A disciplined mind would behave to be safe in the worst case.
Intelligence system could be simple or complicated but the goal is the same that is you could be analytical, wisely make judgment, know the different scenarios, and then you could choose to make the risks affordable.
• Developing detailed operational procedures for safety
It is a job. Job needs the knowledge and skills. You have to be goal driving rather than feeling controlled. We all start from a place with very little knowledge what the market is and how we could get good enough profit.
We have to add some good things into our mind which could be the raw materials to build a redundant safety instrumented system. These instruments could be physical or mental ones, which could trigger the risk sense and help you to check the affordability.
Stop losses could be a way to stop unaffordable risks or losses but it could also make you jump over the fences for nothing. When the profit become big and you would be painful to lose you need to stop the profit.
• Increasing the frequency of testing of critical system components in your mental framework, such as your understanding of the life logic and common senses.
What is critical for your responses when the hazard happens? You could not learn what you should do when they happen. You have to be the prepared hands. Opportunities and safety always come to the prepared hands.
When we are fearful, we have to know something is wrong. Yes, all of us hope the market could run in a predictable way but it is impossible. We just could get to know what possible scenarios would happen in best. We need the testing on ourselves for the safety and protection for ourselves.
• Using a safety emergency plan to stop the unacceptable losses before you become fearful.
• Setting up the mitigating process to deal with hazard situation.
All of the above are concepts only and need to be integrated with out market practice. It needs a lot of works which you may or may not be able to do.
However based on these concepts if we like we could make each buying with a protective layer and then we could not lose our shirts from any single judgment, decision, and action in the market.
It is a long learning procedure. It needs optimism and hopes. It needs the guts and seamless efforts to beat down our primary instincts.
We are not ready at least if we post here for the fear and cheer caused by the changed market environments.
Be sure you know the market is wild fields and full of insane people. Don't thought you could be cheered by too many people even you are very good in the market. It is because good market players need independent minds and views and they could not be accepted by the crowd always, otherwise they become part of the crowd.
Most of us just could see the cake, money, and bloods ahead of them. Why do you google but have no time to read any books about strategical thinking, the crowd, the safety and risks, and others for some right concepts?
We are more attracted by the glory appearance especially it comes from a remote hands who have been called as experts.
Separate names with a comma.