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Trading Perfect storm: GFC+EU Crisis

Discussion in 'Shares' started by wdongli, 30th Jun, 2012.

  1. wdongli

    wdongli Well-Known Member

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    When I read the books about 1929 Great Depression, I noticed a chart as shown below:

    [​IMG]

    To get a historical perspective, I just get another chart for GFC and EU crisis in the following:

    [​IMG]

    ***
    Just get some points from the charts. DOW and XAO responded to the crises similar but never exactly but these two charts did record how the crowd reacted to the events with extremely high consequences.

    1. The crashes were quick and decisive: In 1929, the crash took about 22 months; In 2008 it took about 16 months; Both short down to its level just at the beginning of the booming at least

    2. after both of the great crashes, the market did recover. In 1929, it took about 2 months or 24 months depending on how we defines the recover. In 2009 it took about 11 month so far.

    I prefer to take the views of 24 month recovery.

    3. Crashes and recovery seemed the knee jerk reaction of the crowd. They were driven by great fears. The crowd fears to lose all. The bottom of the crashes are the call for bargain hunters who have not damaged enough in the crash.

    4. Prices on all were depressed and recovery could not go any further. The dying seems worth more than alive but fundamental becomes really bad and dire. All wanted to get out of the stock market but damage has been done. Trapped in the hell and run in the tsunami are not very different.

    5. In 1934, recovery stopped and the market rippled until 1935, 5 months. The recovery continued then for another 13 months. In 2009, the recovery stopped and the market tried very hard to declare GFCII which was very true for Aussie traders and shorters but failed to make GFCII become true.

    The current ripples after this recovery has been there for about 31 months.

    6. War in Europe in 1940s woke up the world but anyone then could not see what would be ahead but the market found its feet and started its new booming trend.

    What's the function of the crises in Europe in 2010s? All lost some blood. Most of traders with the traits of bargaining have been trapped in the hell. All of shares in resource sector, the Aussie economies based on to avoid the recession, has lost most of they accumulated prices since 2005.

    No man in any stock market forum can show the hopes.

    ***
    Are we suffered enough? I feel it should be enough even all could be worse than what it is. It is the time we translate all of news to its bad side but it could not be true ever.

    I am an idiot, do you recognize it and all recognize it? If so, we are not too far from the rock bottom. It is a time plenty of idiots but no genius.

    Internet has being speed up everything.

    1. Could US or BRIC lead the world out of the GFC+EUC very soon and save the EU as in the world war II?

    2. German this time is not vicious war machine.

    3. British is wise and flexible as it was even damaged a lot.

    4. China and Russia are not in the war.

    5. Australia is far away from any war.

    Why the recovery stopped and rippled so long? The great Internet and advanced communication systems put the bad news into your screens just in second. The crowd is fed with the data they just could not digest.

    Do you think a YouTube could make the losers to be winners? It makes things worse in short-term and speed up the knee-jerk reactions.

    [​IMG]
     
    Last edited by a moderator: 30th Jun, 2012
  2. wdongli

    wdongli Well-Known Member

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    Winston Churchill's quotes

    Have you got some fortunes in GFC and EU crisis? Guess you are not!

    It is not problem and after you read some words from Churchill, you would know why if you still don't know yet. Don't feel shame if you don't know or don't understand enough.

    Next time hope we all know and do better.

    “Success is not final, failure is not fatal: it is the courage to continue that counts.”

    Life is a process chained together by successes, failures, and normal events.

    Courage, do you know its meaning? It is a time for traders to fail, which is not a problem but it would be terrible issue if you lose your gut. Do you understand the quote good enough?

    Most of traders and investors would lose their guts in this perfect storm of GFC+EU crisis.

    I am happy I never lose my courage to continue...

    ***
    “Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.”

    Courage is what it takes to do what you have to!

    Need to run under the sun? Find the days under the sun and do it.

    Need to get out of the party before the music stops? Alert by the sign for it to stop, and do it!

    Need to sit down and listen after failures? Crashed the irritating and boring and do it!

    Need to update your mental framework? Get the road map and do it!

    Courage is not just to google for what your like. We can afford and enjoy what we want don't need the courage. Make money in the stock market does need the courage.

    Do you know all really about the courage?

    ***
    “Courage is going from failure to failure without losing enthusiasm.”

    Do you have the enthusiasm to going through your failure in 2011/2012? I do and I have made myself much wiser than in 2004. This time I still hold some real profit which much bigger than the losses of my funds even I still lost unaffordable big paper profit! I am lucky enough!

    Could I get another chance as FMS, PRR, IAU, SSN, and so on gave to me? This time I would lock the profit and pay off the debt so that in next crash I could live based on my bond-type asset and service the warriors in full of my capability.

    Yes, at next peak I hope I could run around my corner and it should be very strong for my safety and preparation to service the warriors again.

    ***
    “Never give in, never give in, never; never; never; never - in nothing, great or small, large or petty - never give in except to convictions of honor and good sense”

    Have you given up to get what you want which you believe are honor and making sense? I did something which just no sense but I never go to harm anyone intentionally. I hate to give up since in a life we can have a lot but few are really what we want. Money is not important but it is about everything for your honor and sensible life. I didn't accept it until I came to Australia and have to settle down.

    Don't give up to get the money, which is resource for good or bad people. We all know that but few could get gut to go for it and never, never give in until it could make you do something you think is significant.

    ***
    “There are a terrible lot of lies going about the world, and the worst of it is that half of them are true.”

    Money comes from yourself awareness and environment awareness in stock market at least. The awareness needs you to get the truth. Fortune comes from the truth and decision of yourselves.

    It is not always true that what we though about the world and market. It is fine and should be problem. However if you want to use falseness to make money, you would fail.

    We are always holding part of truth and falseness. Do you know that and fully understand it? Yes? So don't say "stop losses" are everything just as "money is everything!" It depends!

    ***
    “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

    Naturally a trader or investor must be a optimist since just as everything about life no hope no future. However a optimist is not a guy who just put him euphorically into the stock market without calculating the probability of opportunists and the risks which would result in cost. You have to stop cost run, which would destroy anything in the stock market.

    You must not be a pessimist under any conditions. There are always some good things around, which sits there without matter how bad you feel. You could win if you could find the good things. You could not win just sit there to cry or play the YouTube for your bad feeling. You have to stop yourself destruction in spirit.

    We see the difficulty is to protect us and get what we want safely, effectively, and efficiently. We have the gap to know the truth. We just need to find the range of the gap and win out with the calculated probability and great risk management to govern our gaps.

    *
    I liked reading and wanted to be educated in Univ even when the Univ in China had been closed for a decade. I was optimism for it and read a lot even when I was in a remote village from my home town as an educated youth.

    *
    Life is fair and would reward the prepared hands even we don't know what the reward would be. We would win out and get into the range or stand out as one of 20% of the population in our field.

    *
    Preparedness for your goal and love to do your work.

    ***
    “Attitude is a little thing that makes a big difference.”

    What's you attitude to the world, the stock market and yourself? With it you can play yourself in your best. We all have some gifts and hide somewhere in our brain. We need to find them, get understanding of the conditions to use them for what we want.

    We could not get the limitation by our gens, experiences, and environment, but we could get the acceptable result to keep our attitude to be positive and objective. Good attitude makes your change for the change environment. Once you get a good behavior you could surprise yourselves.

    I never thought I could write posts in English a decade ago. I want to get my English as my mother language. It is the tool to fill the gaps of my imaged and real world.

    ***
    “You have enemies? Good. That means you've stood up for something, sometime in your life.”

    Who is your enemies in the stock market? It is yourself.

    Good now you should work to figure out how to stand up to beat your enemy down.

    It is not easy to stand up in the stock market, which is partly old or new to you at your 50s or older.

    You need a good attitude and remember "never too old to learn!"

    If you really want to do, you will find the way to approach your goal even no one is sure you could get it. So set the reasonable goal first and then extend it to the future.

    ***
    Life is good since it could be in your hand.
     
    Last edited by a moderator: 1st Jul, 2012
  3. wdongli

    wdongli Well-Known Member

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    All feel no good? That is good!

    2011-12 has been a year many traders and investors would rather forget. I will not and never.

    Superannuation and property, have been buffeted by a nasty combination of global weakness and wrenching change in the domestic economy. The XAO is on track to fall by 20 per cent. Capital city house prices have slumped an average 4.5 per cent.

    With so much bad news, it's easy to get despondent. Consumers have not been this pessimistic about their finances over the coming year since the early 1990s recession. Wary traders and investors have quit share markets and rushed to financial havens, they can image.

    No one wants to say "stop losses are all!"

    ***
    However there are some good signs:

    ''Consumers are saying one thing and doing another.''

    It is not just mining jobs that are being created. In the year to May, the biggest job gains actually came in professional services, which created 77,600 positions, somebody said. That's implying that it's still a pretty decent economy.''

    And these reasons for confidence, however, have been swamped by the persistently worrying news from overseas.

    ***
    Households have been pulling their heads in. They are still spending, but are no longer willing to always bid up house prices. Growth in housing credit has slowed to a record low of 5.1 per cent a year, compared with 20 per cent in 2003.

    We're seeing what's going on in Europe and thinking, 'maybe carrying all that debt is not such a good idea, maybe we should start paring back a bit. We are not completely stupid.

    The effects of this greater caution have become clearer in the past year. Entire industries that profited from debt-fuelled consumption are under pressure, with margins being squeezed from retail to banking.

    ***
    Before GFC we worry China took all of our resources now we have also become increasingly concerned about a slowdown in China.

    We fear of a slowdown have spread beyond China to all the so-called BRICs - Brazil, Russia, India and China.
    What we've seen is a significant slowdown not only in China but, more importantly, economies such as India and Brazil". Basically they cannot sustain high growth rates with a developed world that's growing at sub-par levels.''

    This realisation of a weaker growth environment has sparked a rush for high-quality, well-financed companies - while speculative mining stocks are out of favour. Single-project companies that are at the beginning of spending large amounts of capital are extremely vulnerable.

    ***
    It's clear that commodity prices have probably peaked for the past cycle.

    The price of iron ore may seem far removed from households, but the fall in prices means the economy is no longer receiving a free boost to national income. This translates to weaker growth in wages and profits.

    All up, two sure-fire wealth creators of recent years - a buoyant property market and rising commodities prices - have come off the boil in the past year.

    ***
    Is it any wonder people are feeling gloomy? No but feel they worry too much. Since they worry too much I have to think more wisely and intelligently!

    All feel no good is good news if you are wise or work to be wise. German accepted the EU restructure road map which covers the need in short-term and economies union not just common currency. It is good even it could not solve all of problems in days.

    What have the market worried? The sky based on the current global financial system. The sky is safe and then life must come back to normal. Are you sure the sky is the safe? Not completely but it is a matter you have to believe:

    1. No wars in EU to kill the people in millions
    2. GFC and EU crisis have the same root causes.
    3. The exuberance of spending and leverage needs the dire to correct and the correction always is over done.
    4. Don't run in bare since the sun could stay under the horizon for some universal time but you could not close your eye to cry...

    ***
    Don't Hmmm...in the early morning but get your things ready and then you could run under the sun.

    Life is good since we have the hopes, isn't it?

    By the way very enjoy to see the shorters run to cover, optimism run in high speed even for short time, and more losers as shorters. They deserve the losses as the long deserve the losses in crash!

    Shorters, especially in XAO, be careful! Your days are countable! The shark of JP Mongers, was said, doesn't just lost $2billions but $9billions!
     
    Last edited by a moderator: 30th Jun, 2012
  4. wdongli

    wdongli Well-Known Member

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    More about reflexivity

    Reflexivity of the stock market is a process which happen everyday. It has been discovered by people again and again or accepted it for their own success.

    It is the root cause which leads to the self-fulfilling prophecies and the bandwagon effect. Keynes compared financial markets to a beauty contest where the participants had to guess who would be the most popular choice.

    To know more about reflexivity, we have to know its twin is fallibility. It starts from fallibility and then to reflexivity. We need to focused on a problem area:

    1. It is about the role of misconceptions and misunderstandings in shaping the course of events that mainstream economics tried to ignore.
    2. Only if we focus on the problems we can interpretation of reality more realistic than the prevailing paradigm.

    ***
    For example, it was said "global economies" would decouple from advanced economies, which had a basic problem that is if advanced economies fail what the global economies would be? No advanced economies no global economies.

    This assertion of the decoupling has logic faults and it would introduce more and more problem even the crowd was frenetically believing it until the music suddenly stopped.

    There are huge advantage if you can see the cognitive gap, monitor the reaction of the crowd to see the psychological pattern change of the crowd, get out once the peak become the counter-force of the trend.

    ***
    There is a model of a boom-bust process or bubble, formed by Soros. It is endogenous to financial markets, not the result of external shocks:

    1. Financial bubbles are not a purely psychological phenomenon.

    They have two components: a trend that prevails in reality, which is fundamental issues and a misinterpretation of that trend, which is the perception of the crowd about the fundamental.

    2. A bubble can develop only when the feedback is initially positive in the sense that both the trend and its biased interpretation are mutually reinforced.


    China's urbanization and its huge demand for the resource has been the reality. "Decoupling theories" push the reality further out of the reality into fantasy. Once the trend in the course it seems it has to go far and too far from reality.

    *
    3. Eventually the gap between the trend and its biased interpretation grows so wide that it becomes unsustainable.

    "Decoupling theories" push the fantasy run but not enough to destroy Australia economies due to the US house and crises, which successfully stopped the fantasy.

    So that since GFC, the Aussie crowd has been caught as hostage of external force.

    No full extension of the resource bubble in Australia and GFC dire are the root reasons why we have good economies but extremely bad stock market.

    Now we know we could not be decoupled from this world and then we go further and feel doomed by any bad news from the remote EU or China.

    ***
    Fantasy could not go forever which tend to stop by some sudden but shocked events fundamentally.

    1. After a twilight period both the bias and the trend are reversed and reinforce each other in the opposite direction.

    2. Bubbles are usually asymmetric in shape: booms develop slowly but the bust tends to be sudden and devastating.

    Why is it so? When we feel less risky, we tend to use the leverage for more and the leverage can be so cheap in the booming time and forget we need to lock the harvest for rainy days.

    ***
    However the crash is due to the use of leverage: price declines precipitate the forced liquidation of leveraged positions. All are burnt on the fire, leverage is being broken, and then all run in the crash. Get out for safe even the safety is gone already.

    Intelligent speculation needs the understanding the dire consequences from the crash and the long run to get there. You have to be patient to see the sign of the trend and get out before the music stopping.

    Could you do that? Few can do and that is why most of value investors want to forget it. Don't speculate and don't understand the speculation are different. Do you know it?

    ***
    When you cry "stop losses is everything" you are wrong.

    No one could be survival if they stay in the eye of tsunami when it sweeps around globally or locally.

    1. As a trader you need to get out which is extremely important for speculation.

    2. As a investor, you have to get out since the crash could destroy the value which need years to recover.

    Could you be genius in the eye of tsunami? You can but only after the tsunami kill enough genius and bums.

    ***
    We should know well-formed financial bubbles always follow this pattern but the magnitude and duration of each phase is unpredictable.

    Moreover the process can be aborted at any stage so that well-formed financial bubbles occur rather infrequently. Have you learned something such as wave theories? Patterns do repeat but we just don't know when and how they repeat.

    “There are a terrible lot of lies going about the world, and the worst of it is that half of them are true.” How could we protect from the lies but hold the truth for our profit in the stock market.

    ***
    Macro-economies are huge hybrid control system.

    At any moment of time there are myriads of feedback loops at work, some of which are positive, others negative. They interact with each other, producing the irregular price patterns that prevail most of the time; but on the rare occasions that bubbles develop to their full potential they tend to overshadow all other influences.

    Do be alerted by some events which could change our perception collectively. They are the turning point for your profit or death.

    Do you know what means of the turning points?
     
    Last edited by a moderator: 1st Jul, 2012
  5. wdongli

    wdongli Well-Known Member

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    ARU: Rare earth and China's monopoly

    We need rare earth but the spreading of rare earth is not fair or equal.

    In 1992 Deng Xiaoping declared "There is oil in the Middle East. There is rare earth in China". Like or not the monopoly is the source of fortune. He understood early on the commercial and strategic importance rare earths would have in the future. Today they're found in everything, from iPods to missiles.

    It's hugely significant. It's hugely important from a strategic perspective because of the increasing use of rare earth. Most modern day applications, whether we're talking about communications, electronic, military uses, pretty much all involve a heavy component of rare earths.

    So it sounds fundamentally the move of China and others could introduce some self-fulfilled fantasy in future, sooner or later. Yes it is not sure road but I am happy to get ARU when all want to throw it out of the window.

    ***
    The advanced world are asking the World Trade Organization to litigate on China's restrictive trade practises.

    The World Trade Organization have been asked to take tougher action against China's restrictive trade practises.

    It is also anxious about Chinese control of rare earths because it gives them power over what military hardware can be built in America and Europe.

    In April consultation failed to bring a resolution.

    ***
    There are great conflicted interests around rare earth. Chian want to get more as a emerging very fundamental capitalism. It tries to find all arguments, big or small, for its rationality to get higher price of rare earth. Good news is it uses the WTO as its frame for the price.

    China is manipulating prices to the disadvantage of manufacturers outside of China and in doing so in contravention of WTO guidelines. China said that they are merely trying to preserve their domestic base in the face of years of environmentally negative and, you know, very, very environmentally destructive mining processes that produced the material at below full cost.

    However WTO ruling is unlikely to change anything. It's symbolic having a positive WTO outcome or decision would be symbolic for users. But at the end of the day, all the protests in the world over the last five to ten years have failed to change China's position.

    ***
    What would really happen to the price of Aussie rare earth hopeful?

    Quite promising.

    1. there is a great perception supported by fundamental
    2. no one in stock market seriously think about it in GFC and EU crisis so far
    3. no solution in near future and I just hope it shoots up 5-10 times greedily and if it could shoot up more while I don't realize it, I would get bonus.
    4. Rare earth hopefuls have been sold as rubbish for very long time.
    5. crowd could sense the importance of rare earth again
    6. RE reached its peak in June 2011, worsen EU crisis crashed its price more than 50%
    7. ARU has lost any price accumulated since 2005.
    8. self-destruction triggered by worsen EU crisis and global economies has got into the stage which would be steered only by crowd sentiment.

    http://www.bloomberg.com/quote/SHRACEOX:IND/chart/

    So where will it go? Up or flatten? I bet on the up but make the risks to be flatten affordable!
     
    Last edited by a moderator: 2nd Jul, 2012
  6. wdongli

    wdongli Well-Known Member

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    When bubbles happen?

    Any control system can operate steadily and effectively when its input and feedback to it control hubs, are in a range around its stable line. The Out of the range, the system would be in unstable state and could completely be destroyed.

    The financial markets are a complicated control system. It may just as soon produce bubbles as tend toward equilibrium. Since bubbles disrupt financial markets, history has been punctuated by financial crises.

    Each crisis provoked a regulatory response. That is how central banking and financial regulations have evolved, in step with the markets themselves.

    ***
    Bubbles occur only intermittently but the interplay between markets and regulators is ongoing.

    1. both market participants and regulators act on the basis of imperfect knowledge
    2. the interplay between them is reflexive.
    3. reflexivity and fallibility are not confined to the financial markets;
    4. they also characterize other spheres of social life, particularly politics.

    Indeed, in light of the ongoing interaction between markets and regulators it is quite misleading to study financial markets in isolation. Behind the invisible hand of the market lies the visible hand of politics.

    We, as intelligent speculator or investors, ought to study events in their time bound context: economical and business fundamental, crowd sentiment, and our own risk affordability.

    ***
    As an intelligent speculator or investor, you should emphasize the role of misunderstandings and misconceptions in shaping the course of history.

    We should know

    1. we have limited knowledge so for sake of safety, we need to treat bubbles as largely unpredictable.
    2. The direction and its eventual reversal are predictable as we could predict what would happen a house on fire completely.
    3. We could not predict the magnitude and duration of the various phases.

    ***
    I would like to taking fallibility as the starting point.

    I want to get the profit but I don't want to take the risk to burn my house down. I want to know how bad I could be. I want to risk what I could afford only. I want to service the warriors when they have no any options in the ruins.

    The updating of our mental frame work is to make my conceptual framework more realistic. You have to discard the idea that laws or models of universal validity can predict the future.

    You are not a god and then you could not get the model for future. Be changed for better behavior in the changed stock market!
     
    Last edited by a moderator: 2nd Jul, 2012
  7. wdongli

    wdongli Well-Known Member

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    Interpretation of stock market

    Modern society is based on the science. So we tends to put all of the things under the shadow of science but no all are run in the field of science but art, human behavior, psychology, and so on.

    In stock market, you have to recognize this reflexivity and Imperfect Knowledge Economics, and our fallibility. We should recognize the fallibility of market participants, regulators, and economists.

    A truly dynamic situation cannot be understood by studying some equilibrium. Change is a process. A great change need some great drives for a process to change.

    ***
    EU crisis is particularly instructive to know the above points. It demonstrates the role of misconceptions and a lack of understanding in shaping the course of history, otherwise it would not be formed on the base of single currency only.

    Few would have liked to find the fallibility of EU before GFC. No trouble no fix. But after EU affects your life you have to know the fallibility and see whether it could be fixed by the policy makers.

    We have to say the nature of EU crisis is very complicated. In hindsight, the authorities didn’t understand the nature of the euro crisis.

    ***
    Policy makers had thought it as a fiscal problem for long time. However it is more than a banking problem and a problem of competitiveness.

    With wrong perception of the root causes of the problem, we tent to apply the wrong remedy:

    1. we cannot reduce the debt burden by shrinking the economy
    2. we have to grow the economy and spend under the means and much more than the means to get the way out of it.
    3. The crisis will still grow if there will be a failure to understand the dynamics of social change.
    4. Any measures that could have worked at one point in time were no longer sufficient by the time they were applied.

    Social matter needs common good as the goal with the help of managed process of the changes. Life and trading or investment need good goal with the help of managed process too.

    In the stock market you need to find your own fallibility and fix it in a changed process internally and externally.

    ***
    By the way I bought 39100 of MOL shares at $0.125.

    [​IMG]

    IO is not Tulip in Dutch after 1637. Supply would be increased to satisfy the demand but IO is IO which is needed by someone. China is trying to land softly.

    [​IMG]

    MOL have worked for its IO and resource since 2004 for nothing? I am happy I didn't buy and hold it for so long. It should have some remaining value and I bet on it for the sunny days.

    All of small resources are sold much less than what could be got at their dying. What if MOL just don't die in this dire time? What if MOL die? I have read all of its announcements since GFC. I feel it has much more value than the current price.

    I feel very good when I see the price, $5 per share of MOL in 2007. I feel much better when I see the price, $0.24 after GFC crash.

    $5000 is nothing for a life but what if MOL could be alive after China is not the source of Aussie worries?

    ***
    I really want to buy 5,000,000 of CKK but unfortunately I just could get 80,000 of its shares. It is unfair.

    All know we should buy when the Wall Street is full of blood but few dare to do. Yes most of traders and investors have lost too much to get their guts in their bodies! It is the time to service them and I thought the risks are affordable.

    I would not expect MOL would come back to $7 but if it comes back to $1.25 or CKK comes back to $0.05 when I am sleepy, it would not surprise me. Who knows where the rollers-coasters would roll them to?

    It is always some big things has not tip off but the traders or investors have been traded in.
     
    Last edited by a moderator: 2nd Jul, 2012
  8. wdongli

    wdongli Well-Known Member

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    What the crowd feel now?

    All of us know crowd psychology is very important force to decide the course of the stock market.

    In self-destruction or self-fulfilling phase, simply some significant events would trigger the change of the crowd mood. These changes cause the market crash and as though everything would be in the sky or hell. In hindsight all of us know they are not true but when all feel they are in the sky or hell, no one believe they are not true.

    I have stared at the psychology of market cycle for a while. GFC caused the crash. EU crisis crashed the recovery. China slowing down is crashing the hopes.

    [​IMG]

    ***
    Have you asked where the crowd mood is in the psychology of market cycle? Have you ever measured your risks based on the place of the crowd mood?

    Euphoria? No one feels so since we have gone through the stages psychologically from complacency, anxiety, denial, and panic long time ago. Have the crowd been in capitulation? Of course it has done so long time ago too.

    We had felt anger and very anger about the shorter and we hoped the regulators could stop the shorters since we were burnt on the fire. Do you feel anger now?

    ***
    99% of traders or investors who dared to fight or run in the crashes have run away and swore that they would never come back.

    We had been anger for too long and it had consumed too much our energy and now the crowd just wanted to forget since they are so depressed and they have lost the money for their retirement and then their guts too.

    However life needs hopes and hell is not the place where human could stay for too long if the sky is intact. So since the V-shape recovery, we could see the impacts of the hopes on the crowd.

    ***
    Human is not designed to deal with the shocks. Not all of us would get traumas at the same time in the bust. Any big surges would stir the ripples. A surge is not big enough to beat all down.

    However the ripples could put all of traders or investors into the hopeless or depression one after another. Human could not control this process. They could not hope but their hopes burst into pieces in the ripples. Timing is not important but everything. The longer you stay in the valley of death the more depressed you are!

    What hopes have been left for the crowd now? A lot but who care about? No crying now anymore. All are the silence and darkness:

    1. US has trouble
    2. EU just has a plan
    3. China is slowing down
    4. Aussies are waiting for the days that resources would be rubbish!

    ***
    I do feel there are enough blood in the market. Something have to happen since the sky seems not in risk. Only one problem is when the crowd would get the belief about the market back.

    In this stage of crowd mood, you have to know you could not control anything but yourself, your money, and your mind. You have to get enough cash in hand in case the thing could be worse. It was terrible to see $5 becoming $0.10 but it would let you thrilled to die if $0.10 become $0.05.

    However it is a best time to get future winners in high probability. I feel very sorry about myself. I had the chances to have quite significant profit before the ripples hit the market in 2011 but I failed to know the cruelty of the ripples.

    ***
    In the ripples two things would decide your future: cash for the maximum possible time of the ripples and the shares which have been hold at the fire-sale price. It is the time if you would not die you would be reborn.

    What do you feel XAO dropped down 6 point as the DOW did last night? Aussie traders and investors have lost any basic judgment about their own economies. They follow the droppings. Who failed would be followed by Aussies!

    Have to say collectively Aussies are great but XAO is the slaughter tables of their brave souls in the stock market. It is a quite special feature and you should not forget!

    ***
    By the way happy to know Aussie house price increased in May. The house buyers are more sensitive to the fundamental. It is a great sign.
     
  9. wdongli

    wdongli Well-Known Member

    Joined:
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    Posts:
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    Location:
    Perth
    RBA: rate held

    The interest rate is a tool for central banks to fine tune the course of the economies and then the market. RBA has cut by 0.75 percentage points in last two months. Today it kept the rate no change.

    Two things need to be noticed in Australia:
    1. inflation was expected to be in line with its target
    2. growth was estimated to be close to historical trends.

    So why does XAO out of its historical trend?

    ***
    It was said recent economic data suggested the pace of domestic growth was somewhat stronger than anticipated earlier, but noted risks related to the evolving European debt crisis.

    US seems at the door step of another recession, some ones said. But XAO seems have priced itself at the position for the sky to fall down.

    It is not really matter but dropping down if the crowd feels the risks. XAO have initially responded positively to signs of further progress towards longer-term sustainability in European financial affairs, but Europe will remain a potential source of adverse shocks for some time.

    Anyway it seems the crowd feel a more subdued international outlook than was the case a few months ago.

    ***
    Aussies have got some stimulus for the economies:

    1. carbon tax compensation payments going to households in recent weeks
    2. lower oil prices and tax cuts in the new financial year

    It seems no rate change will likely provide a floor under the Australian dollar with the high probability to loose the rates globally from the Fed, BoE and ECB, and stabilizing Chinese growth.

    It is really irritating and disgusting to know we could not get good Aussie economies at lower Aussie dollars.

    So Aussie traders and investors seemingly would lose and lose more without hopes. The crowd in Australia stock market is hopeless and useless.
     
    Last edited by a moderator: 4th Jul, 2012
  10. wdongli

    wdongli Well-Known Member

    Joined:
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    Posts:
    1,292
    Location:
    Perth
    XAO back to 4200

    Are you excited by XAO comes back to 4200? Definitely not if you have lost 90% of your trading or investment capital since GFC.

    However Aussie market seems beat the shorters good enough. All of troubles from US and EU have been in consideration except China slowing down.

    In my view, China should slow down and actually it was what market really want that China land softly. It may need another 1 or 2 months.

    ***
    Could the Sun over us for half year or one year? It depends on the crowd mood. After they have run in the ruins since Oct 2009, they deserve the Sun.

    Hopefully they are lucky enough and I am wise enough to service them. Feel very regret for my mistakes in 2011. Otherwise I could do more for the warriors.

    Be kind but not be stupid without checking the seasons to the warriors. No one can save them in the eye of tsunami. You just could let them feel better after the sell all and get the traumas!

    ***
    Just dream the days all of genius and bums could make some money!

    1. GFC has hit all in its eyes down
    2. EU has let shorters shoot XAO into GFCII mood for more than a year
    3. Carbon Tax has played its effects on all
    4. China has slowed down softly and seemingly hard to believe it would take a hard land as US and EU.
    5. Japan's earthquake has made its tolls.
    6. Decoupling theory has lost its audience for years.

    ***
    What if China surprises the market again? It has got some very basic elements of the fundamental capitalism but has not thrown away all of the weapons to fight collectively from the fundamental communism.

    What'are in the bear's backyard to show? I don't know but I do feel it has less and less destructive weapons to hit all down again in one or two years. What about next recession? EU has been in the brinks. It is not surprised to see US puts its toes in a light recession.

    Yes we could not say risk free ahead but for what I have collected in last few weeks, it is much safe than Dec 2007 if not March 2011.
     
    Last edited by a moderator: 4th Jul, 2012
  11. wdongli

    wdongli Well-Known Member

    Joined:
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    Posts:
    1,292
    Location:
    Perth
    Draw yourself from the past...

    Watched "Start Gate, Atlantis" and encountered some wise words:

    Draw yourself from the past and don't let the past draw you down!

    Could we draw ourselves out of the valley of death in the past and don't let the failed past draw you in the valley of death forever?

    We do need to get the lessons from the past and only the lessons from the past. If you have lost your guts you would lose the wisdom forever.

    Hmmm... How could you do so, some wises would question you? Could you get the right answers for them and yourselves?

    Don't forget you need to be ready to enjoy the Sun even more tsunamis would hit more warriors into the hell!

    ***
    I was a bargain hunter but sometimes I just didn't know what was the bargain.

    All of bargains have the fundamental reasons to be bargains but definitely dead buts in the stock market would be the bargain. We only can bargain for the value which is discounted by the crowd mood, no more no less. Under any conditions it is wrong you bargain $0.01 at $1 price.

    I sold MPJ at $0.10 today. I would have not sold it before since they are still dirty cheap absolutely but it has nothing I could expect for a killing. So why do I hold it for destroying my capital?

    ***
    When we buy the dead nuts we would turn to be dead nuts. I will sell the dead nuts along the way while I try to buy the discount to value toughly!

    We bargain for the price much lower than the value we have calculated again and again. It is good news for me I could break down the psychological barriers to sell MPJ.

    I do hope I would be wise and bet on the price much lower than the value and no more and no less. Before that I need to admit I have done a lot of dead nut deals.

    ***
    Nothing is steady in the stock market.

    Bargains at one price at one time at one stage of the crowd psychology could be true but the same price could mean the hell after the time, place, and yourself change!

    Most of traders or investors are stupid enough as I did. I was an bargain hunter but I just bought dead cats even they have no any chances to rebounce.

    Stop, you are stupid!
     
    Last edited by a moderator: 4th Jul, 2012