Trading Just around the corner

"Don't put me in the corner!" If you do so I would fight rather than die under your beaten! A lot of market warriors would say something similar but why do you allow others put you in the corner to beaten?

Why don't find your corner with enough necessities and books before everyone runs away to escape from the fate that Mr Market would put them on the slaughter tables? Why do you allow yourselves to run away to allow you are in the corner with the bare hands only?

So if you have your corners with enough and necessary supplies you could feel what your loves are just around the corner and sing happily the song:

Just Around The Corner

I thought I saw you in my head
How’d you sleep away again?
Where’d you go?
Where’d you go?
I came so close so many times,
Even almost lost my mind, trying to find you, trying to find you.

***
How could this city feels so lonely?
It’s hard to believe when people tell me
Don’t give up when it all comes down
Only things that you lost are found
Just around the corner, just around the corner

...
If I knew where you are somehow, I’d be running there right now
No matter how far, no matter how far
This would be easier if only
I could believe what people tell me
Don’t give up when it all comes down
Only things that you lost are found
Just around the corner, just around the corner

...
I swear the stars look like they`re crying
Waiting for Love can feel like dying wow
Don’t give up when it all comes down
Only things that you lost are found
Just around the corner, just around the corner

***
When you don’t think you can take no more
You might find what you’re searching for
Just around the corner
It’s just around the corner, yeah.
Just around the corner
It’s just around the corner, yeah.
Just around the corner
It’s just around the corner

***
Do you know what you would like to find? Who said trading is just about stop-loss and system? You have to know how to survive with your own corners in the winter and not to be euphoric in summer and run away far from your corners in case...

Now do you get the sense about the corners and "Just around the corner?"

If you do, you could have option to sing another song about the corners:

***
Robin - Just Around the Corner

Things aren't quite as they seem inside my domain

*
You can't know about everything
only pleasure and pain.
You wonder why I come here with head to my hands

Where else can I be cured and the king of your mansion?
A thorn in your side
a child to protect that claims he's free.

*
Just around the corner
half a mile to heaven

Strong enough to hold you
starved for some affection.
Darling
come quickly
come ease my mind

*
For my prayers have not been answered in a long time.

I've already made my bed
like it or not

As long as there's no regrets I'll be here
when the ride stops.
These comforts to me and these crosses to bare
with which we live.

*
Just around the corner
half a mile to heaven

Strong enough to hold you
starved for some affection.
Baby
I can't drag you into this mess!

I'm the thorn in your side and the child to protect.
Just around the corner
half a mile to heaven
. . .

***
I like the corners now, which I felt disgusted before, in the market. I do feel my one is not strong enough even I struggle to make it so before next bout of the war. Once the corner is strong enough with all of the necessities, I would like turn it into a supply base with great protection. It is not a easy task and do hope I could be matured in the market and could use some warriors' money to build the base in fair deal!

Could I do so? I am confident about it and do know it needs to be done bit by bit! It is a way with a lot of trials where you are conscious and emotional for self-awareness and environment awareness.

Wdongli's Blog

 

Don't expect chorus of the defeated warriors

When you could sing the song "just around the corner," no anyone would he happy in the market. They could not since they are in depression and have lost the gut, hope, desire for happiness, and then optimism.

But you do know the new generation of the market warriors would jump into the war place without matter how loud the cry from the depressed old warriors. The new warriors would spit on the faces of these losers. These losers are nothing but the cowards. Victory is so attractive.

Glossy appearance and the cake on the sky are so powerful no too many people could refuse to move in the way they directed. No too many lost warriors could stand up again. They have been beaten too hard to get any hope. They may find their own corners to survive but it is impossible for them to go around any more.

How many veteran warriors could sing now in the market? IT bust and GFC successfully have reckoned the crimes and sins of their souls! Market doesn't keep his captives since it doesn't need to do so! Most of losers as warriors would find their corners and jail themselves from the market.

Don't expect chorus of the defeated warriors! They are the lost generations in the market! I don't think they deserve the spitting since they have ever fought for independence before! But I don't want to be one of them even I have been defeated before.

I am in a revolt to the war authorization

I could not see the future very clearly but I have seen enough from the history. New generation of the warriors have been raised by the war authorization in market, which has been there for thousands of years. Old warriors lost and new warriors join the army!

It is a hope you could change your part to service the new generation of warriors. This is a revolt to the war authorization but is would not care about since it would threaten the authorization! So new war is prepared in the depression of the old warriors. Market would become crowd again. The hope, the optimism, the exciting, the thrilling in the victories, and euphoria among the new warriors are inevitable.

War's time line or scheme roughly

Based on the time scheme of the war in last 100 years, each of the Great war would happen for every 30 years more or less; the normal size war would be about 7 years with the leadership of DOW; something has being happened and the war timeline would be different. Before my 70s if we are not in the great war time, I could have chances to use the wars three times for my life not the war authorization.

If the IT bust and GFC was the great war, we have been in it for more than 10 years. It should put enough old warriors in the jails while the war authorization has got more and more generations of new warriors. Quite possible, the life is coming back to the market war place again in 5 years. It is quite long time, isn't it? Definitely to the new warriors since they are thirsty to win and they want the glory from the war. But I am not so desire for winning in war anymore. I do hope I could revolt personally and get a revolution for myself!

I could not save the jailed old warriors, I could not stop the formation of the new army, I could not stop the euphoria, I could do is just go around my corner to prepare my revolt, try to learn how to do the fair deal with the war authorization, and make my own revolution. If I could do so, the victory would be home-made which would be sure I am independent in my spirit, soul, action, behavior, finance, and enjoy the happiness for long term.

Who said the last laugh is the best?

You should laugh at last since you are not a warrior!

It is not because you are pushed by anyone else but you know you have to grow up in the market. You know it is a process just as a boy has to learn by education and self-learning through the experience the mistakes to form his personal trait and behavior, which make his mind and his life.

It is a process of self-burning, self-curing, self-learning, self-irrationality-identification, and self-completeness and self-perfection. It is not about just the corners. It is about how we restart our journey with the refreshed mind and better equipment to protect ourselves in this war place.

What's the next for the new chorus?

We are in trouble and logically we should start to know the risks and know the path of the market crash and the crowd sentiment in the crash from mania to depression!

Now it seems the time to get the hope, get the optimism, get to know how warriors are excited again, get to know thrilling, and see how the warriors move into another war, a hopeless war!

Could you go around the corner first? Could get a back door for the new chorus? Could you move your corner under a seat for the new chorus, which should be huge seat for the winners? Could you make yourself comfortable in this new corner and then you could read, think, dream, and go out for the sunny days while the new warriors have broken through the barriers for happiness? Could you keep to check the back door without barriers in any time? Could you be sure you are in the chorus before it goes to be euphoric? Could you keep you are energetic to run away first before the music just stops?

Too bad to be true, which would start the music in a new great chorus, is true as too good to be true, which would force the music to stop! It happens always. It should be exceptional next time! The problem is when you hold'em and unfold'em, isn't it? Gamblers' paradox only since you have the gimmicks to stop the losses or rocket launchers. You are too clever as genius but stupid about the life and war logic!

 

Australia is good and really good!

Losers jail, a example!

In the best time before GFC, a group of clever mates in Sharecafe, cheered for mateship, tried to make a team to win in the market by counting on the views which get the most support by the members of them, and bet on the view.

In the worst time of GFC, the mates in ShareCafe thought it was the only way to be survival that is moving into a farm to get full independence. That is a anti-evolution craziness appeared and never disappear in these souls.

Most of them disappeared in the market and survival ones just could cry everyday now. The mate, who are optimism but do know the importance of the guard, tried all to cheer them up with the hope they don't stay in the jail for the remaining market life, but failed, and have to move forward and leave them there to cry!

They are in depression about market!

They are in serious depression disorder caused by their inherent bipolar disorder now. Any bad thing is the sign to cry for the sky. They could not understand the power of warriors coming and gone. They could not recover the completely broken guts.

The mateship gone there and replaced by the personal provoking without any irrationality. They find a great way to let them stay in the jail!

Now they just could talk generally why the sky is in great trouble! Whose problems? They said it was because Warren Buffetts, Adam Smith, Obama, China, US, Greece, even the War of Art, and anything they could find for the sky tipping off. I regularly come back and have a quick glance to see the damage to the souls of the warriors by the ruins.

They are lucky in the dream land

Fortunately they lost the war but don't need to be the refuges and then they could curse this or that politicians for the wrong policies. The dream land gets rid of any desire to survive in the market.

What are their life policies? They don't know and don't have the guts to know! To save their souls they have to be sent to North Korea but it is too cruel for our modern society. Do let them cry and go for your way and pay more tax in the market.

Not too bad after you are in jail made by market, you could come back to your workshops or offices. Australia is good and really good for the defeated warriors!

Do wonder!

Do wonder in this good land, why do you just worry the sky would fall down even you are a defeated warriors. You still have the chances even you have to come back to your offices and workshops now! I have quit from my offices and I could not say I would never come back them again but the sky is still quite strong at least when we could play in the market!

I would change myself to get the profitable deal if I could! Optimism with the guard could not guard any great success in any field but it is the necessary condition inside you! It will drive you to dance on tap for your market life and personal legend!

So ShareCafe is good and then if I completely lose my gut and fail to change I could cry there loudly! It is a hope or my last resort for a acceptable life? I don't know but life is good even in our complete failure in the market!

But it has to be said this crying for happiness is very powerful to jail you in the market. A lot of cried warriors are wise now: They cry for market and work hard in the workshop and offices more than before.

 

Fortunately one side and Riskily another side

Fortunately one side

Fortunately I acted very cautiously since 2004 to take the chances from the dirty-cheap fishes. It was not very exciting but increased my capital 50 - 150% before GFC.

It was great GFC did not burn any of my money but it slowly but definitely change my mood from

1. anxiety about the sky,

2. cheerfulness for the complete capitulation of the market crowd and the best ever fighting back of the policy makers,

3. taking the gut to get a lot of dirty-cheap fishes in the door steps of hell,

4. getting the desire to run after rising SunVery greedy, and

5. locking the profit at the peak of V-shape recovery before the music turned to be consolidation.

I was still quite cautious but after I locked a few 5 and 10 baggers in August and saw my new buying in last October, jumped as I hope, I turned to be greedy, ignorant, and arrogant, which happened when I believe I have got better mind about the market and myself. It is not true unfortunately!

Riskily another side

I was not cautious to move around my corner but I want to be a warrior for victory again! Riskily I didn't realize my change and my mood turned to be optimism without guard.

I let myself far away from my corner and refused to lock good enough profit, about $80,000. I hope the top line of consolidation top line could have been broken. I cheered honestly for XAO 5000 point. I used all to find the historical fact and future prediction for my irrationality!

The fact is no any one could predict what the market would do! Optimism only could be used to make you dance on tap for your mind updating and long term happiness but you could not use it for your quick and expected profit.

Never knew enough when I believe I knew enoughness!

It is a enough profit in half year to the capital size I hold and could say it is the best I should expect in half year. However greed blind my soul and I even could not think about the warning from my daughter. My greed swell to the level that I felt I could not be wrong. My job is to hold my winners for more than one year to pay less tax. I believe I could get my return easily for 100%. I feel I know the risks and I could twist the risks in my hand.

I twisted too hard when I didn't realize. From my words in my blog and posts you could not find that even in hindsight I could see the sign of them.

All of profit gone and my portfolio was in red. For a quite long time I refused to admit my irrationality unintentionally but the last rout of selling in June shocked me out of the trap! I have to admit my defeating and accept the fact. Otherwise I would put me into euphoria when the market turns to be. I could lose my shirt again!

I have to stop my irrationality and greed!

I have completely check my mind again as I did between 2001 - 2003. I have to avoid to be insane again! No one could save me but myself!

War doesn't care about your feeling but the consequences! It doesn't care whom you are too! But you have to be sensitive enough to know whom you are with what kind of mood or emotion always!

You could not afford the cost of over optimism and euphoria!

We could afford the damages of the storm if we are rational, but we could not afford the cost raised from our stupidity!

I could not afford to be a warrior again if I don't want to go back to my offices where I could do my job but no too much dreams could be left. I don't want!

who want to lose the money or burn the money in the market? I have to know myself and crowd in psychology very deeply! So that I could set up a lot of mirrors in my study room for my mood, emotion, greed and all of bad sides of me, the progress of the mind updating, the bench marks for my stupidity in the market, and then a right plan to lock the profit under the flag "no loss, no harm, and fail-safe."

Never and ever allow anything to put you in the queue shown below:



It would be the time you would be abused every day in the market even not socially in Australia!

 

What is your faith in market?

If we do anything important, we need some faith on it. But what is the faith really. Could it be one to accept or generated from our feeling, knowledge, experience, and pickup from the views of some else randomly? Here the words are not about any religious faiths but more general.

Faith is trust, hope and belief for goodness

The dictionary said faith is trust, hope and belief in the goodness, trustworthiness or reliability of a person, concept or entity.

Generally speaking, it is offered as a means by which the truth of the proposition, "things will turn out well in the end," can be enjoyed in the present and secured in the future.

Informal usage of the word faith can be quite broad, and the word is often used as a mere substitute for trust or belief. For example, all of market players believe they could get profit from their market players.

But logically faith is simply a positive assumption

Yes we need the faith for our life but what if we have some false faith? We want to make profit in the market but do you have the faith on the market? Why do you have this faith? Is our faith just the natural extension of our greed and fear? We want some money and some quick money so we just have the faith that we could click the keyboard to make a lot of money as that in IT crazy time.

So it seems we could say if your faith are accepted from others, the faith is opposed to reason by our own. It could be true faith or false faith. Do we need to have reasons for our faith? I agree that some question in the pure domain of faith concerns questions which cannot be settled by evidence. So some assumption is necessary. Any assumption means the probability we are wrong.

This is exemplified by attitudes about the future, which (by definition) has not yet occurred. Logical reasoning may proceed from any set of assumptions, positive or negative. In this view, faith is simply a positive assumption.

In our market playing or fighting, most of significant failure seem linked to some biases. Do you know we could take the biases as the faith and we hold our false faith into the valley of deaths?

Faith in the market war

So should we be alerted by the probability of the false assumption? In our social life the false faith may not damage us significantly. For example we just dislike Labor, one more or less vote for Labor could not change where Australia would go. But in a war or in the situation like the war, your false faith could be fatal.

It is not easy to find whether your faith is false or true. We tend to do all for enforcing our faith until we could not have the faith on our own faith. You have faith on stop-loss, you would find all to prove it is only way for profit. You have the faith on passive value investment(but missing some important things in your faith such as margin of safety), you would like blue chips, buy at peak, and blindly believe you could buy and hold for winning.

Some faith could not be allowed to be challenged such as that on God. If you have faith on God, I could not challenge you since I could not show No God as you could not show me Having God. However if we take all of faith as that on God, we would suffer without reasoning.

What are your faith in the market?

To know it you should know whom you are and what market is first. If we don't know that, all of faiths we have are dangerous to be false one. Of course if we luck, but if we lucky, we don't need the faith.

Are you businessman in the market? Are you warriors for your feeling but no reasoning? Are you independent? Do you know fundamental or tech? Do you have the faith on you? Based on the experiences in offices or workshop?

People, who trained for working in offices and workshops, have traded in the market for a decade around. Most of them don't know the market and whom they are in the market. Why do they jump into the market? What faith motivates them to be warriors in the market? Any good reasons for their faith?

Seriously I have faith if I don't update my mind I would lose my shirt sometimes in the market. I have faith the mind updating is very painful too if we want to do business in the market. We do need the castle and moat to protect what we have and the resources to make the profit.

We do need to get right tools to get out of the castle to collect the service fees from the winning warriors. We need to stay in our castle when the herd drastically move all into the herd.

1. Most of us don't have faith in the market

They don't have the faith but they do want to get the quick money and easy money. They want to see whether they are lucky since they could not feel satisfied by their salaries from their hard work in office and workshop.

If we don't follow the rigid definition of the faith above but more broadly, they have faith for their lucks especially when the market is being making easy money and quick money for anyone in the market. So we could say they have the faith that they could get quick and easy money in the market.

Are there easy and quick money? Sometimes but most of times it should not be true. So we could have faith say, it is possible that we could get some quick and easy money at some special time periods. It is true faith since it is based on the fact.

Could we have the faith that in the market everyone could make easy money and quick money?

2. Some have faith but lose the shirts

Money is powerful. In the market few is not greedy when market is good and few is not fearful when market is bad. Some have faith, which however is not from reasoning but the price pattern.

They assume all of impacts on the price by the past and future information is shown in the price. So they could predict the price movement for profit. The fact is most of traders lose the money.

They must be right on something but something wrong which make them lose the shirt, which is my faith. That was why I wanted to know more than the price patterns after IT bust.

3. What my faith on market?

Market is a war place. All want to win and take the profit away.

Most of them in the market are too greedy and fearful when they should not. Most of market players don't understand what war is and don't care about the art of the war.

They are the warriors when they don't know and warriors are the resources which need to be consumed in the war. So most of warriors would be defeated and turn to be depressed.

Market is not a quick and easy money generators but it does make quick and easy money time by time. Without this kind of times, market would be destroyed by itself. It is the tricks to attack the new warriors. It usually happen after all of old warriors have been in depression and lose the gut!

4. What warriors faith?

They join the army when the market is excited. So they should be those in the market who have no faith on anything but want to win and making killings.

They are driven by the Cake in the sky which is setup in the bullish market. They have all of personality and behaviors of the members of herd. They don't have the capability to reason, organize, discipline, and analyze.

If we have to say about their faith, they have the faith on the Cake in the sky.

They don't know the risks but the Cake only!

Where is the true faith in the market from?

One thing we need to know we need faith, which would motivate us to stay in the market. We also need to know false faith could lead us to the cliffs and valley of death in the market without necessary protection. We must hold the true faith so that we could open the way to stay and get the profit in the market.

So where is the true faith come from? Does it come from some one else who are busy to give the tips? Does it come from your feeling? Does it come from the market price movement? Yes it can but the risk to get your faith being false is quite high. You could not afford to lose regularly for too long, couldn't you?

It should come from our experience, life logic and common senses, and the wisdom from the accumulated true knowledge about the market, life, economy, vicissitude, and war. These faith should be cliches but few people know the underlying meaning and application context and conditions.

These faith should be guarded by some very simple rules, principles, and guidelines! It is the place where we need to be organized, disciplined, self-reliant, and analytical. Do you know the words of the cliches but don't have the capability to use it creatively in the new environment?

Too many market players could twist the words very successfully but fail to get any profit in 5 years time. You twist anything which will twist you later. You twist the faith and then you would be led into the wrong place!

Why could you not be successful in the market? Something is linked to your faith, which is fatal!

 

Just mulling about faith or belief in the market

Faith could lead to many absurdities

We need faith but faith could not be true just because we believe it is true, and you could not feel irrational for some views of the relativist. Faith could lead to many absurdities. Therefore if relativism were true, every individual or culture would be infallible, and disagreement among them would be virtually impossible. Actually nearly all of warriors in the market just care about their own faith or ideas very much. No anyone could change others for others' profit in the market until they get what they deserve.

Faith-or, belief without evidence also forestalls any serious questions about meaning in life and your market playing. It's thought that, because faith is an alternative way of knowing (alternative to reason and commonsense, the modes known to be generally reliable), no one can question its conclusions on rational grounds. You either believe or you do not. Rational resistance is futile-and so are doubts about the worldview that faith endorses. But as with relativism, believing doesn't make it so.

A lucky guess, true belief or faith, knowledge

Knowledge is more than belief, even more than true belief. A lucky guess is true belief, but few would think that it constitutes an instance of knowledge.

Knowledge requires that there also be some indication, justification, good reasons, that a belief is true. Faith can give rise to grand doctrines, high cathedrals, lucky guesses, and warm feelings in hard times, but not knowledge.

To believe otherwise is to have a very odd conception of what knowledge is. Faith's notorious disengagement from justification, perhaps more than any other, helps explain the incredible multiplicity of religious belief.

If it feels good it must be true?

Then there's the comfort factor, which may be better than anything else at squelching important questions about meaning and hope.

In the anxious hours of night, in the awful moments before terrible news comes, a hoary myth gives you comfort and hope-and so you believe, or try to believe, clinging to the principle that New Age gurus make explicit: "If it feels good, it must be true." Thus the comfort factor can be more persuasive than a stack of reasons.

I do wonder how many warriors lost all with the false faith. When the market crashes, what make you feel good? When the market is euphoric, what upset you? Warriors need the faith. But independent life needs the knowledge to reason their faith.

All of depressed losers had the time they feel extremely good but as individuals they could not miss the fate to be in the jail they built up!

A poignant way to lose all with their faith

All of depressed warriors stick to their faith in a poignant way. The irrationality of guess-like faith has driven the market and themselves winding down, growing thinner and thinner. They could not fly in the market anymore but cry in the jail they built.

The market warriors' faith is "tired, grotesque, fatal, and irreplaceable." How could nyone not born into the market, ever take the knowledge seriously and give up the guess-like faith? Yet the market warriors cling to the glossy war rituals and draws on a tenuous faith to counter bouts of failure. This bout could happen to a warrior one or two times which is big enough to get rid of him from the market.

Is it worthwhile to risk so much hard-earned money for a guess-like faith on the quick and easy money? The depressed old warriors after defeated, have all of the reasons to cry, blame, curse, but unfortunately they don't curse and blame themselves and the guess-like faith.

They simply could not since they don't have enough knowledge and their experiences are about running after the cake in the sky and they could not tell others how to run after a rising Sun. It is sad and real sad part to them! Some would never know it is the faith on the cake that has destroyed his market life!

Why could not we be comfort for our life?

Everyone deserves a comfortable life but every pieces of resources have to be got by some effort and time. All of us have right to shout "Why not?" Why shouldn't we reach for comfort? All of us are equal, right? Do you know the comfort of a chimera in the market would give our market life some meaning and steel us against black thoughts of market and emptiness?

However do you know the equality just means you have the right to join the market playing or war but the consequences could not be the same to everyone. In the view of consequences the world is not fair and equal. How could you be born in Australia and someone else must be in North Korea in a hopeless families?

False faith could not derive comfort!

How you could derive comfort from a belief you know to be false? It is impossible.

Just guess you do believe, without good reason, that some proposition is true, and you're soothed by that belief. In fact, you're willing to live your whole life guided in part by this inspiring proposition.

What's wrong with that? Well, nothing if you don't mind diminishing one of the things that helps make you a person worthwhile in the life or market. A person is someone with full moral rights and the capacity to make free, rational choices. That is, persons can know things and choose which of them is really important in life. But when persons undermine this power by believing without good reason, they diminish an essential property of personhood.

They may be more comfortable, but are somehow smaller. In the market the consequences could be much worse that is you are jailed in depression once you dare to think about it.

You could be happy for short time with the false faith but not true

Imagine that you're hooked to a machine that supplies you with ready-made sensory experiences. You think and feel that you're writing a novel, making a friend, and doing a thousand other pleasant things. But you're actually just floating in a tank while the machine does its work. You are happy, blissful, believing that you are directing your own life and choosing freely all the time. So you stay hooked up for life.

Does anyone really think that such a life would not be diminished? That it would be meaningful? Being in the tank is not utopia. It's hell. Being happy is not enough. Fantasy is not enough. Being hermetically sealed from woe is not enough. Being a person and living a meaningful life means making real choices.

Could you rise up and give up the false faith, the biases?

While in the tank you can't make any real choices because you're disengaged from reality. You're not an authentic person; you're a replica of a person. If somehow you came to realize the full implications of your situation, I think that you would rise out of the tank, unplug the electrodes, and walk off to meet the real world, and encounter its real pain, real darkness, and real meaning. And never look back.

Fantasy can be a wonderful thing, except when it's mistaken for reality. Fortunately the market is real if you want but very hard and really hard since you have to change your personal trait and behavior. You could be painful to change which is impossible for most of us!

Could we be comfortable to look for the reality and get the faith with the reason passionately and enjoy the journey which would change us slowly but positively?

 

All should be real and meaningful in reality

Look for meaning in the real market

Can we do better at finding meaning of our action in the real market?

Yes, but not by looking to the narrative of Self-Faith. You have to live on the empirical grounds in the market, even it seems not to be very sustaining at all, at least not long-term. All of your faith on market must be got based on the bloods and fire, the reality of the market and war. It is obvious in the market the blood is the cash and then the fire is the probability to lose your cash.

However you must reject to set your faith on even stronger grounds. It would reduce our minds to moral egoism, which flies in the face of our considered moral judgments. Philosophers shot this horse a long time ago. In the market we have to accept the wisdom which has been accumulated and distilled in the real world for thousands of years.

In the market all of guess-like faith just fail. No one can find indication that it is anything but an attractive detour to the hell as the depressed warriors for generations has shown. The notorious failure of all arguments for this narrative of quick and easy money renders this hope of financial independence hopeless.

You fail in a fair competitive environment means your failure in life, your incapability to deal with the challenge, your long term happiness, and you lost your goal!

More than just an irritant to people in the market

Worse, the problem of evil, guess-only faith is more than just an irritant to the people in the market, but it would make all of warriors apologize for their behavior guided by their faith. This is terrible news for those who think that the only way to have a meaningful life in the market is to fight in the war desperately.

Market activities are part of our life. You should not become purely culinary of the war authorization in the market. You should not serve as food to consume by the war. If you are defeated and jailed in depression, would you rejoice that your faith finally being fulfilled since you have been excited, thrilled, and euphoric in your market life even the cost is in the jail of depression for years?

Obviously, simply doing what your guess-like faith wants won't guarantee that your life will be meaningful. On the other hand, there is no plausible reason why self-conscious, rational, free persons like us cannot create their own meaning in the market and life.

We want to see the wonders and become part of wonders!

In the market, we want to be competitive for fairness, justice, and universal rights we deserve, which has been the most powerful sustaining force in the lives of our greatest heroes.

But these ideals are only some of many that have always sustained creatures in need of hope. There is also the search for knowledge, which has enthralled and energized the likes of Aristotle and Darwin and Curie and Einstein and Russell. It has made W. Buffett, George Solos, and a lot of great market players, which never was seen before.

There are plenty of wonders in the universe and market that will knock your socks off without having to invent them. Some people say that their soul's thirst cannot be slaked by anything as arid as science and market playing. I believe them. And I believe those who say that chasing the Holy Grail of knowledge in life and market quenches their thirst just fine.

We like to see the wonders and become part of the wonders... in the field we choose, now it is market to me!

No news about faith and consequences for anyone in the market and life

In short, there is no news here. The real dreams have not changed. Most of us would still give our lives and our fortunes in pursuit of some hallowed cause of justice, rights, knowledge, love, or beauty.

So let's ask the impertinent questions, and if they lead to further questions about how to judge the answers, so be it. It would be wonderfully shocking to know we are debating the epistemological worth of faith, relativism, knowledge, wisdom, science, art, and market. Such debates could easily ascend into serious explorations of the real and the true. That is needed desperately for the people who don't want to be the warriors in the market.

If this unlikely event were to happen, we should be sure that at least we know the guess-like faith would fail the warriors again and again as the market history has shown.

 

The faith: Hopes from ruins after a boom crash

If we believe our faith should be formed based on the reality, evidence, knowledge, and reasoning, we need to know the history of the market and get the faith that hopes are from ruins after market crash!

Investors left numb but hopes rose silently



The breathtakingly volatile weeks between Nov 2008 - March 2009 left investors numb. A close study of the Great Crash and GFC, and the years that followed, offers some unnerving context, and some reasons for optimism after the market warriors capitulate and put them into the depression jail.

Can you spare a dime?

July 9, 1932 was a day Wall Street would never wish to relive. The Dow Jones Industrial Average closed at 41.63, down 91% from its level exactly three years earlier.

Total trading volume that day was a meager 235,000 shares.

"Brother, Can You Spare a Dime," was one of the top songs of the year. Investors everywhere winced with the pain of recognition.

The psychology of fear was the mood of US

The nation was in the grip of "the psychology of fear." Industrial production was down 52% in three years; corporate profits had fallen 49%. "Many businesses are better off than ever," was wisecracked, "take red ink, for instance: Who doesn't use it?"

Banks had become so illiquid, and depositors so terrified of losing their money, that check-writing ground to a halt. Most transactions that did occur were carried out in cash. Those homeowners who could still keep their mortgages current came to the lender directly to service their debts with payments of cold hard cash.

Worth more dead than alive

Just eight days before the Dow hit rock-bottom, Benjamin Graham, who many years later would become Warren Buffett's personal mentor, published "Should Rich but Losing Corporations Be Liquidated?"

It was the last of a series of three incendiary articles in Forbes magazine in which Graham documented in stark detail the fact that many of America's great corporations were now worth more dead than alive.

Sold lest than value of cash or cash equivalent

More than one out of every 12 companies on the New York Stock Exchange, Graham calculated, were selling for less than the value of the cash and marketable securities on their balance sheets.

"Banks no longer lend directly to big corporations," but operating companies were still flush with cash -- many of them so flush that a wealthy investor could theoretically take over, empty out the cash registers and the bank accounts, and own the remaining business for free.

Always sell at unduly low prices after a boom collapses

Graham summarized it this way: "...stocks always sell at unduly low prices after a boom collapses. "In times like these frightened people give the United States of ours away.'

Or stated differently, it happens because those with enterprise haven't the money, and those with money haven't the enterprise, to buy stocks when they are cheap."

What have XAO worried about since August 2009?

After the epic bashing that stocks have taken GFC and a lot of bad events around the world, market players in XAO can be forgiven for wondering whether they fell asleep only to emerge in the waking nightmare of July 1932 or November 2008, all over again. The only question worth asking seems to be: How low can it go? How much could you afford the lower low?

Make no mistake about it; the worst-case scenario could indeed take us back to 1932 territory or the worst price in GFC crash. But the likelihood of that scenario is very much in doubt.

Graham P/E and how to use

Robert Shiller, professor of finance at Yale University tracks what he calls the "Graham P/E," a measure of market valuation he adapted from an observation Graham made many years ago.

The Graham P/E divides the price of major U.S. stocks by their net earnings averaged over the past 10 years, adjusted for inflation. Tthe long-term average in Prof. Shiller's database, which goes back to 1881, is 16.3 times earnings. It shows the historical norms.

When moving away from the norms, it tends to overshoot

But when the stock market moves away from historical norms, it tends to overshoot. The modern low on the Graham P/E was 6.6 in July and August of 1982, and it has sunk below 10 for several long stretches since World War II -- most recently, from 1977 through 1984.

Could the market really overshoot that far on the downside? "That's a serious possibility, because it's done it before," says Prof. Shiller. "It strikes me that it might go down a lot more" from current levels.

In order to trade at a Graham P/E as bad as the 1982 low, the S&P 500 would have to fall to roughly 400, more than a 50% slide from where it is today. A similar drop in the Dow would hit bottom somewhere around 4000.

Not actually predicting any such thing but...

Prof. Shiller is not actually predicting any such thing, of course. "We're dealing with fundamental and profound uncertainties," he says. "We can't quantify anything. I really don't want to make predictions, so this is nothing but an intuition."

But Prof. Shiller is hardly a crank. In his book "Irrational Exuberance," published at the very crest of the Internet bubble in early 2000, he forecast the crash of Nasdaq. The second edition of the book, in 2005, insisted (at a time when few other pundits took such a view) that residential real estate was wildly overvalued.


GFC put the market conditions in abyss of the Great Depression

Strikingly, the conditions in March 2009, bear quite a close resemblance to what Graham described in the abyss of the Great Depression. Regardless of how much further it might (or might not) drop, the stock market then abounds with so many bargains it's hard to avoid stepping on them.

Out of 9,194 stocks tracked by Standard & Poor's Compustat research service, 3,518 are now trading at less than eight times their earnings over the past year -- or at levels less than half the long-term average valuation of the stock market as a whole. Nearly one in 10, or 876 stocks, trade below the value of their per-share holdings of cash -- an even greater proportion than Graham found in 1932.

In all probability it is wrong as it always has been wrong

Those numbers testify to the wholesale destruction of the stock market's faith in the future. And, as Graham wrote in 1932, "In all probability [the stock market] is wrong, as it always has been wrong in its major judgments of the future."

In fact, the market is wrong again in its obsession over whether this decline would turn into a cataclysmic collapse. Eugene White, an economics professor at Rutgers University who is an expert on the crash of 1929 and its aftermath, thought that the only real similarity between the climate in March 2009 and the Great Depression is that, once again, "the market is moving on fear, not facts."

Policy makers acted differently

As bumbling as its response so far may seem, the government's actions in 2008 are "way different" from the hands-off mentality of the Hoover administration and the rigid detachment of the Federal Reserve in 1929 through 1932. "Policymakers are making much wiser decisions," says Prof. White, "and we are moving in the right direction."

Market warriors were in a state of shock in GFC

Investors seem, above all, to be in a state of shock, bludgeoned into paralysis by the market's astonishing volatility. "We have 101 clients and almost as many consultants representing them, and we've had virtually no calls, only a handful." Most of the financial planners' phones are not ringing, and very few of their clients have even asked for reassurance.

The entire market, it seems, is in the grip of what psychologists call "the disposition effect," or an inability to confront financial losses. The natural way to palliate the pain of losing money is by refusing to recognize exactly how badly your portfolio has been damaged. A few weeks ago, investors were gasping; now, en masse, they seem to have gone numb.

A formal feeling comes

The market's frame of mind in the end of 2008 and early time of 2009 seemed reminiscent of a passage from Emily Dickinson's poem "After Great Pain a Formal Feeling Comes":

This is the Hour of Lead --
Remembered, if outlived,
As Freezing persons recollect the Snow --
First -- Chill -- then Stupor -- then the letting go.

This collective stupor may very likely be the last stage before many investors finally let go -- the phase of market psychology that veteran traders call "capitulation."

Stupor prevents rash action, keeping many long-term investors from bailing out near the bottom. When, however, it breaks and many investors finally do let go, the market will finally be ready to rise again.

Prevail if you dared to put money into the capitulation market.

No one can spot capitulation before it sets in. But it shows it did happen between Nov 2008 - March 2009. Investors who have, as Graham put it, either the enterprise or the money to invest then, somewhere near the bottom, are to prevail over those who wait for the bottom and miss it.

Fortunately I put all I could in this capitulation but I didn't get the mood change of the market which resulted in the consolidation and made a series of mistakes this financial year.

Hopes rise silently but you still could no fathom how long the herd could make their mood back to normal! Any way most of warriors have lost their gut and others who would like to move into the market are more cautious and prudence or perhaps over-prudent which is true at least in Australia Market.

The most serious mistakes I made was I used up my cash reserve which put me in a very awkward situation I could not hold my holding without worries. A lesson I should never forget! Actually if I followed the rules of time averaging buying and the time scheme I set in 2006, locked the profit for enoughness based on a reasonable profit expectation, and didn't take tax saving as a goal, this financial year should be quite nice year.

It is not market, dirty-cheap fish, or swans, make the profit or losses but our premises or ideas make them. Self-awareness and environment-awareness make the hopes from the dire market!

 

Why hope makes me headache?

I have had headaches on how to explain the market emotion after depression for profit in last a few days. I never thought about it before since I didn't play the market game for long enough just after the depression happened.

IT bust shocked me in dumb and after my sentiment smoothed the optimism had come back to the market. GFC just gave me the chances to use the logic "buying when the Wall Street full of bloods," which worked very well but now the bloods dried up, hope came back but sometimes high and sometimes low. My mind is not ready for market to act in this way.

I am in anxiety for a while

It could be understandable why the hope is weak and strong since most of warriors old and new could not ignore there are still a lot of warriors are crying. The hope should have a long way to go for relief and optimism. No too many people talk about what we should do in this stage where bull and bear both are not too strong but no one could take the charge for the market direction!

Seriously saying I am in anxiety. I used up all of cash reserves and any time when I saw the bear stronger a little bit I started to worry. I know I should not but I just could not help to stop! Sell to get the reserve back or hold to see the bull stronger? Each has its own catches.

Naturally I am still a warrior to whom the greed and fear are instinct even the logic and common sense stopped me to buy even at the peaks of the correction channel but the failure to sell at peak and use the back up forces put me in paradox.

No one talked about problems similar to what I made

I could not blame and curse anyone forced to do so. I knew I had made mistakes. But how to reduce the damage by my mistakes wisely not emotionally. It has perplexed and frustrated me, and make a lot of headaches to me.

So, I hope I could think the hope and relief deeply by reading some great ideas from the wise people. The problem is all of wise people seeming don't have or have overcome the troubles I have been in. It is understandable since all of them tell me "no loss, no harm, and fail safe." It is logical deduction that they know they should not put all of backup force into the war place in case they are just not lucky or get the case worse than normal unluck.

Any decision if wrong would make things worse in war

In any war place, if you make a wrong decision, the consequence would make things worse until you have to pay out what you should pay. I feel the selling in May and June was too much for XAO. Actually the market has put all of bad things into its price and XAO as a whole is under price. The key is how long it would be underpriced!

I really don't know, I really need the cash reserve, I have to sell to lock the profit or losses in August, which is my judgment to get the possible best result.

What are the judgment based on?

1. XAO should recover some losses if no tipping off of China, US, and EU. I take the tipping off of the global market again as GFC just as the sky falls down. If so I would accept the fate. It is possible but unlikely!

2. The soft landing in China, contained deficit crises in EU, and seasonal correction of US, should not make XAO worse than that in June.

3. Dirty-cheap fishes shooting up mainly is caused by its internal explosive event and no one could predict. They are about black swans. I need to give them more time as I could since they are still higher than or at the lowest price or a little bit lower than the price I paid.

4. One and half months is long time for this volatile and uncertain market. Greed and fear would make overshooting with the market sentiment swing.

Could I implement my decision?

Without matter what the consequence for my decision, I have to act logically and rationally and try all to avoid mistakes such as holding too long and have to sell on fire in worst market condition or holding too short driven by the fear and put me on the station to see the train leaves away without me when I still could afford the tickets!

Sound you get the lessons but do you have the discipline and organization to implement your decision before the middle of August? Someone would say so since I keep to break my promising and bent my judgment and decision with my overwhelming feelings. I will and swear this time!

Hope could be the load on us!

I have put time about hopes. Before I just feel all good about hopes. Who could say hope is not necessary for a life? Anything could not be held for too much. If anything is too much, it will become our load.

Damned! This time hopes and tax deduction become the load and nearly crash me unto the ground! It is not new to me but I just don't care about how to use this logic and common sense.

How stupid am I? Very much! How great am I? Very much! At last I put this logic into mind again or refresh it in my mind. I feel great since I feel I could have less chances to make the same mistakes again. Is it not great?

 

What hopes and its effects to warriors?

Questions if we hope too much

We know in the market depression, there are hopes. But what is the hope and do we have the hope?

If we don't have the hope, what could generate hopes to the market crowd? If we have the hope, do we hope too much and lose the necessary prudence and protection on ourselves?

It is not a simple market sentiment question but how about your capability to sustain the crushing of the hopes. The hope could be crashed quite likely when no enough good things to get big enough people feel hope.

Not all of black swans are good. Some exceptional bad events could hit us ruthlessly. Should we organize and use our resources, the cash reserve, for bad black swans?

You play the dirty-cheap fishes with the hope of the good black swan, right? When you have the hope, you should not refuse to take the risk for chances but you should not put all of your force into the valley of death and wait for the luck to reckon what you have done!

It is insane!

Ok, your hope but how long optimism back?

Assuming our hope is reasonable and we could trust our hope, do we know we really could not tell how long the wall of depression would drag the market down to the lowest points or lower in the bottom or correction channel?

If we could not tel how long for the market to overcome the depression by increased hopes, how dare you could use tax benefit as the reasons for you to refuse locking the enough profit?; how dare you could use your hope as the trigger to use all of your backup forces?

What make you make this kind of stupid and insane decision? You should know it is the logic for survival, that is, "never and ever to allow your army all into the valley of death. Who could dare to challenge this logic?

It is because I didn't take the market as a war place

I have to admit that I never think about market as a war place even I read some books about the art of war for winning in the market playing. It is a root problem and fact I didn't know market enough. Since I could not know the environment, I could not know self since we live or play or fight in a environment!

Do we know we have to keep enough cash reserves in hand. Do we really know cash is the blood? Do we know the market just has the hope only? It is not in relief let alone optimism. It is high likely that you hold the discount but chances to sell at its value price!

We need question us wisely and deeply to sort out our mind

What is the longest time when you should hold your position roughly? When most of market players are still hopeless the market do provide the chances but you have to organize the risks about your affordability and strategy for the winning. Hope itself could not make profit for you and quite possible blind your eyes!

Could we sense the score of hopes, which market as a whole has? Could we don't lose the chances and also don't use all of bloods for the last fighting? You have to make the necessary diversification and time average in proper quantities. Market playing need the quantities of the necessary factors for qualified market fighting and playing.

We have to keep our blood flow under any conditions! You have to keep cash reserve not too much or too little before the market gets relief and the optimism.
The relief and optimism in market is the necessary conditions for resources used for your life and the new warriors, who would need them desperately.

Patience is virtue but you could not get it after you lose all of your bloods in the war

Why do you question so many and so complicated?

We ask so many questions since we know if we don't have the hope we could not stay in the market and if we have the false or delusive hopes or hope too much, we could move into valleys of death without protection.

1. In the war you have to protect yourself

2. In the war you have to win out

3. You have to win since winning would provide maximum protection for you.

4. You have to protect you and then you have the chances to win out!

The time to hold a position with the hope only would result in anxiety, frustration, and put the seed into soil for your failure. You have to know yourself. You have to know the sentiment of warriors as a whole. You have to know the environment you would put your resource in.

Don't lose hope but don't use hope as the base for your decision! You use it to motivate you to dance on tap to know what you know and what you don't know!

 

Why should I know hope deeply enough?

Hope means desire, anticipation, and efforts for the consequences we really want to get in the horizon of future. It is the start point for any booming in the market. Since it has element of desire and all of the market warriors would get the same desire, anticipation, and enjoyment to put their efforts for the same desire and anticipation.

The uncertainty means some good or bad things would happen along the way for optimism which would stimulate the market as a whole to move up forward. Hope is not dream and then everyone in the volatile market have to fine tune their hope to fit the hope into the reality, effort, and probability to get what he hopes.

Hope only could become stronger and stronger while the hope is confirmed based on how people perceive the probability and of course hope would be defeated in the expectation of the probability.

Fortunately or unfortunately we all have thing not known or known. So hope means some certain, some not certain. It is quite true in the ruins and depression. You feel you have not hope but something just so good and you could not refuse the bud of hopes appear.

The uncertainties in and after depression, would beaten the hope with bad events. The process from the hope to relief and optimism is a difficult and challenged. So we could see the consolidation since we have the hope and a lot of us have paid the effort and resource for their hope.

At some point, the inertia accumulated in the bearish down road of the market sentiment would deflated. The thing to human is always if it is too bad better and struggled to be better. Once the depression is deflated enough, hope would take the charge. In this sense hope means we have tomorrow but don't forget the night could be cold and bad. In the night, could you hold what you need for the night?

So logically and philosophically we should say

All the interests of the reason, speculative as well as practical, combine
in the three following questions:

1. What can I know?
2. What ought I do?
3. What may I hope?

We have problems since we don't know or don't know enough. If you don't want to lose your hope you have to know what you don't know first and don't give biases into what you feel your know. Do you know what you should do for your future with what you know and fix the biases of the assumed known, and put efforts to turn unknown to known which is necessary for your hope to be true?

What you know is not to show you are clever and wise but get the consequences you want that is why we have the hopes and the hopes make life very good and attractive.

In hindsight, my mistakes in this financial year were caused my unknown. What I didn't and don't know? The hopes and its deep meaning to life and consequences due to our human nature. You don't know SELF and the you will don't know others in the ever changed war place, which could be hell in ruins or a grand place for the great victory of bull! What I really know? A little bit about the dirty-cheap fishes and its habit and behavior in worst time. It was not worst time so I got lost!

 

Hope: extremely important in the market

Hope since it is about what you can know, ought to do, and what you choose with some confidence for your future. It is a light in the darkness of the uncertainty of future.

If you don't know what you could know you could not get the gut to know; if you could not get the gut to know, you would never know and should not know what you ought to do; You don't have the goal and then you would be fearful and cheerful too easy to lose your goal.

Why so many traders just act by following the price chart? They want to get the easy hope and easy knowing. They limit their mind in losses and profit but could not figure out the true reasons or causes of the hope and why they should buy and sell. They follow the consequences to hope and despair.

There are something need to be decided in philosophy, human nature, and fundamental. Let's face these basic questions to each of human being and extend the understanding into our market playing.

1. What can I know?
2. What ought I do?
3. What may I hope?

Arguably, the combination of this set of questions comprises the fundamental anthropological question of what is man. What may I hope? is to consider to be both practical and theoretical, with primacy given to the practical. A second formulation of the question of hope could be given
as, ‘If I do what I ought to do, what may I then hope?’

Each formulation embodies a distinct emphasis. Asking ‘What may I hope?’ directs attention
to the objective of hope, that is, that for which one may hope.

Alternatively, asking ‘If I do what I ought to do, what may I then hope?’ primarily directs attention to the relation between the future end(s) and past act(s). This second formulation explicitly refers to notions of possibility and desert, and it raises the issue of what one is entitled to hope for.

Underlying this second formulation is we try to put us in the coordination of happiness and
virtue. Seriously saying hope is implicated in the employment of reason, so hope is deemed relevant to orienting thinking and guiding action.

How many market players have the hope with the necessary reasons if not sufficient ones? What the hope as light for your tomorrow, the day after a year, the after a decade, or at your 30s, 50s, or 70s. Is your hope strong and reasonable? Could you have the power or motivation to move yourself toward the destination which would lead you to?

Do you have the desire and the capability to be sure the probability for your hope is 100%? How? We need the right answers to these three life questions!

Day traders have hope but their horizon is too short and then they hope always in risk and they are so easy to be despaired. They are warriors in the market and they are those have to be consumed by the war! It is their fate. They are wrong fundamentally to get life winning in the market!

Be sure you have hope, be sure your hope with your efforts to protect your hope, be sure you fine tune your hope since the more you know the more probability for you to answer these three question properly and correctly.

Hope in this sense decide whom you are and where you go!

 

Relationship between hoping and imagining

Hope and image

In most of time for most market warriors they take the cake in sky as what they hope to get, which makes them excited, thrilled, and euphoric when the market have hope long enough.

At this market point, the hope is very weak but depression still hold their captives tightly, we need to clarify the relationship between hoping and imagining.

Being able to imagine is one of the necessary conditions for being able to hope. However, imagining the cake in the sky does not imply you should hope that cake, even though hoping implies imagining.

The fact that all manner of entities and eventualities can be imagined does not thereby indicate
that all of these imaginings are candidates as objectives of hope. "Could one imagine a stone’s having consciousness? And if anyone can do so – why should that not merely prove that such image-mongery is of no interest to us?"

So, even if it is the case that someone could imagine a certain state of affairs, this of itself would not provide good reason for taking the imagining seriously, nor for regarding it also as a hope, especially as a sound hope.

No any one in the market should be so stupid and don't know the difference but what if you could not tell the cask is in the sky?

***
Hope and reality

If we look back in history, then objectives which could only be imagined at one time subsequently became possible, therefore objectives of hope, and eventually became real, as did the power of (assisted) flight for human beings.

A question could be asked as to whether the power of flight became real because it was hoped for, or, did the power of flight become an appropriate objective of hope once a glimmer of its possibility arose in material terms?

The question of the relationship between hope and reality is neither as simple nor precise as might be imagined from thinking of hope in a popular psychological manner. Rather, addressing this question requires thinking about the relationships between different kinds of possibility ranging from logical and conceptual possibility to real possibility (i.e. according to human endeavour).

Do we hope for real profit in the market? Do we know the relationship of the possible profit from logic and conceptual possibility to reality? Do you know you need to work on your hope for the objectives in your hope?

***
Different hope based on the agent

Do you know generally you could have three different types of hopes:

if I can, I do (try), which is agent-orchestrated hope
or if we can, we do (try), which is mutual-orchestrated hope
but if I cannot, you may, which is other-orchestrated hope
and if you cannot, the world may, which is world-orchestrated hope.

Do you know what type of hope you have?

1. As warriors their hope is world-orchestrated hope and they could not put any control and put effort to realize their hope. Some just put their hope on the tips, but could you trust tippers would work for you objective?

2. We can and then you have to answer who should be your partner? W. Buffett or your wife who is much more greedy than you. I know what I want and I do and try, but do you really know yourself and be self-aware.

3. Something you could not do by yourself and then if you grow up so big could you work others for the same hope and how to work together for the same hope?

Unfortunately most of market players have the hope without good reasons. How could you get the winning probability of our hope higher than 75% and than we could use diversification and time average to filter the loss out?

 

Hold our hope even market takes more time for relief!

We have to hold our own hope!

As retail market players, most of us need the time to accumulate the capital bigger enough first. Before that we have to say it is my own hope, I would like to put my time and effort to achieve the objective of my hope, I can and I will do.

I hope I could make my personal legend in the market at my 70s. I would like to put my effort into my hope so that I have to:

1. Buy each share with the winning probability bigger than 75% and if good black swan hit anyone of them it could make killing.
2. Diversify the portfolio to filter the losses out from the portfolio. The losses are caused by our mistakes, unluck more than those in normal time.
3. Time average of the buying to smooth the volatility of the price and buy more if price lower, which would reduce our cost
4. Keep good enough cash reserve to buy more of discount if the price turns lower enough without break down the diversification and time average guideline
5. Rebalance the portfolio in market good time. It is not to stop loss but take the product in harvest!

I can make my hope to be reality

I know I can do and I could let concept objective to be the reality. However it needs the knowledge to identify what time and what price would have this 75% winning probability. It needs to know the value, the impact of the market sentiment to the price, and economical fundamental.

How to know the value? We can use the present value of future cash flow based on the financial statement, the management quality, the overshoot of boom crash, and so on. But I need to extend my knowledge otherwise they are what I don't know. I could not make money in any thing I don't know with good enough confidence.

I will focus on to learn herd or market sentiment cycle. I need to know the market and the participants of the market. They are the fundamental of my market playing even too many market players think to know them and play in the market is speculation. It is bias that value investing don't care about sentiment. The discount only could be achieved while market is turbulence and uncertain! Value analysis is great to get a value reference which could be achieve very conservatively. I need great margin of safety for each of fishes and swans of my portfolio.

Diversification and time average of buying plus cash reserve and rebalance, actually is about portfolio management for our own market playing strategy. It is part of operational efforts to make us organized, disciplined, self-reliant, and analytical. If we could use portfolio as the base to manage the risks we would run our game in a system way. We need to extend ourselves for big enough achievement someday later.

Asset allocation should fit our practical needs and hopes

Asset allocation can be very complicated issue but we could start with simple, practical, and effective way to get our "no loss" objective for our portfolio. To achieve no loss for our portfolio, we have to understand that asset allocation is very important to manage our portfolio's market cap volatility which would decide if we could get the objective, "no loss!" This is a strategic issue and most of retail market players never think about or not enough.

The reason asset allocation is important is we could not know what will happen to one share tomorrow. We need to be sure our winning probability or no loss objective never are damaged since one fish or swan die exceptionally. The lower the probability of our single fish or swan revive, the more important and necessary to get higher diversification in our portfolio.

However as retail market players we could not copy the what big boys do. Most of them play in the market with the top-down approach since they could move big size of capital and cover the sectors in different market cycle for annual profit. We, as small players, have to learn how to use our capital when the market as a whole has the signs of hope and relief from the distress but herd still doesn't believe the turning points are moving in.

We need balance for our hopes

We need the hot stock but we don't want to hold those which are hot now. We want to hold the hot fish or swan in months or year ahead in the bullish sectors for years. We don't want to stay in the cold iceberg for years which we could not afford. We want to get the killings but we don't want our portfolio in the risks to loss or we have to sell on fire.

We should know asset allocation is to managing risk without losing the chances. We need to buy each fish with the mind what if it becomes worse. We need to hold the fishes as a group with the confidence, 100%, that we would never in loss. We need the cash reserve as the most important part in our portfolio. We need to buy when the market is worst and we still have enough cash to keep the room for our fishes to move freely in our backyard. We need to be sure we never sell on fire. We need to know we sell is because we have the profit to lock which is too big to lose!

Too many sell on the fire in GFC. What could you get if you burn your house down? It is crime to lose your shirts anytime since you fail to take the responsibility to accumulate the asset for your family and its independence! If we make big losses for our portfolio, we could not evict the cause of the loss out of our doors by simply burning the money. We should prevent losses. We should take losses as risks rather than the price down heavily in the market crash. The market crash makes the cost down for your portfolio if you are good enough!

No loss no worries

If no losses we should not worry as the big boys do. We don't need to let anyone else feel our performance is excellent and stable. We don't need the glossy appearance. We just want to get the profit accumulated every year! We meed the asset allocation and time average since we don't want to get our portfolio in red even in the worst time.

Some big boy said something like "in September 2008 after the US investment bank Lehman Brothers collapsed, the world's sharemarkets were sold off heavily. It did not matter how good a share investor you were, your portfolio was hammered - even the great Warren Buffett's portfolio had billions wiped off it."
Why do you buy at peak or hold on when the profit is good enough

It sounds reasonable but we are small and we have advantage over the big boys too. Do you think Buffett could sell Berkshire Hathaway at the peak before GFC. He could not but we could sell the shares of any company if it is overvalued and we know the value!

That is why we have to know whether the market is excited, thrilled, and euphoric. That is why we have to sell for enoughness. We have to buy lower than the price we sell! We have to buy when anyone else is cold and we have to sell when anyone else is hot.

It is dangerous if we take volatility as risk rather than the losses. Volatility is our friend of small market player!

Diversification could not protect your mistakes and miscalculation

However it is true diversification give some protection. The fund managers don't want to talk about the protection is limited. If we could get 100% right in the market we don't need to diversification. If we could get 100% right in timing of the turning points, we don't need the time average.

They said "the key benefit of spreading investments across different asset classes is better protection from the downside risk of being exposed to only one asset class." The question is why don't we sell before the downside happen?

If we buy at peak before any crash, nothing could save us! We buy at the turning point when the market turn from bust or bearish time to boom or bull time. Sometimes we could be hurt by the falling knife but if we have diversification we can filter the losses out! I could not see it was good time for any one to buy any asset at the peak before GFC.

If all crashed down what could save you?

Don't set and forget

Yes it is true portfolio management is not a strategy such as 'set and forget' strategy.

As markets move around, the process of staying in the course with a long-term strategic asset allocation plan need discipline and the ability to rebalance regularly. Sometimes markets move around dramatically, and over time portfolios may drift away from their allocations and need rebalancing in order to lock the happy profit and compensate the losses from the dread fishes which unfortunately make the 25% losing odds to be reality.

You need to lock the profit when it is enough. You need to reward yourselves by seeing the cash in hand increased and spending some for your life style.
The following questions are good ones even we could answer wrongly

What are your goals and time frame?
How well do you sleep at night (how much losses could you afford)?
Is one mistake or one falling knife would result in too much losses of your portfolio?

You can reduce your investment risk through diversification and time average. That means if one fish turns to be falling knife, you don't be hurt necessary, and winners would cure your pain automatically. We need to think fail-safe!

 

Consolidation turns to be a war of attrition

War continues and seems never stop

GFC was a war to crash all of warriors in the market in which no one could avoid defeating and pains. The V-shape recovery was first fighting back of bull, which gave the hopes but could not overcome the depression in the market. The consolidation since October 2009 were the war of attrition between bull and bear.

Hope and despair in the War of attrition

In the market war of attrition bear and bull would consume the resource from anyone who dares to challenge them. Any profit is short life and the trap for the necessary resource attrition to support the war. You could see the hope but you could not expect the attrition could be end very soon.

1. You should have hope but you should know you need the necessary cash to hold your position until this war of attrition is at the end.

2. You have to be the toughest bargain hunters to minimize the cost. Otherwise you could see worse and much worse consequence, which out of your expectation. It is the most basic quality that the war of attrition ask for the winners.

3. You have to hold big enough cash reserves since no margin of safety or value could be the guarantee for your winning. You could not get any profit if the time of the attrition war much longer than you hope and you use up your cash reserve. The sale for survival would mean sale on fire.

4. In sale on fire, all of value and margin of safety would burnt down.

It is very tough and you must be tougher with best cash reserve. In this war of attrition, there are a lot of small market sentiment cycles for bargain hunters. If you could get enough profit to compensate the attrite resource, sell and rebalance your portfolio for the unavoided next boom.

In this stage, you need to hold your position without attrition, otherwise you should try to end the fight to save the resource and find a way for new cash income. No attrition of your capital would be the ticket for you to ride next boom in full and you could have the chances to be rewarded!

I don't know war of attrition so far

Don't realize it until this afternoon. The time of the consolidation is much longer than my expectation. I don't know the war of attrition and its risks, chances, and then I have made a series mistakes. Actually I dealt with the market war place with in this war stage with my desire more than a hope with good probability calculation. I failed to make the hope in guard.

Before next boom, the market sentiment would go through depression, hope, relief, optimism stage first. I oversimplified the market sentiment stage and ignore the interaction of different market sentiment in the war of attribution.

In depression the hope would be lighted but very dim. When the hope become stronger, there were still uncertainties and despair around. The uncertainty would add the fuel to despair and the despair would destroy the hope while hope resists the despair. The selling in new despair is unavoidable if bad news just come in.

Very frustrated

One year hard work for nothing in the market but reckon my own mistakes only is terrible lesson! Do feel quite frustrated sine I still could not sort out my mind for all about the war of attrition, context, effect, and the right response. I will reckon my mistakes, get a stop mark for my mistakes in August, and try all to get the lessons.

I will put more time about hopes in the market, which is necessary for a dirty-cheap fisher or distress share player. Hope usually comes with despair and despair comes from the bad consequences. How to avoid putting ourselves in despair and get the hope in guard when most of market players are despair?

Don't allow the war of attrition to assume your hard-earned capital or the profit which you got in the crash and V-Shape recovery!

How?