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Trading What did you do after crashing?

Discussion in 'Shares' started by wdongli, 21st Feb, 2012.

  1. wdongli

    wdongli Well-Known Member

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    Market jumps and crashes times by times. Market can have its days and nights, and four seasons or more different but characteristic stages, where market players feel the differences based on the economic and psychological elements of the market.

    What have you felt since you started to be anxious for your money in the market?

    1. did you become anxious and have your remembered why you were so anxious?

    2. did you try being denial for what you were anxious on? Did you cheer for the bright light for resources before July 2008? Why did you do so?

    3. were you shocked when you saw the price dropped down as a stone from the cliff?

    In shocks have you remembered you delayed to sell for stopping-loss when your system ruthlessly told you so?

    Did you fear the sky was moving into the hell?

    4. were you become more desperate and you could feel your panic and hopeless?

    5. In panic have you remembered how painful you were? Did you feel all what you could do were sale without any clue about what it meant to us "burning money on the fire."

    6. Did you feel you just wanted to run away from the market? Did you know you were in capitulation mood as most of people in the market?

    7. Could you get your gut back to play in the market? Did you curse and sit on the sideline to hope the market collapsed completely? Did you feel you would feel better if the market would be down further?

    8. Have your remembered when you were in despondency and did tell yourselves no way in the market?

    Never asked and thought so? It is a mistake to waste your experiences that you lost your shirts or too much. Don't talk to me like that! You have been in my ignoring list. I don't care about the lessons. I do google to let me feel I could run my system cleverly! It is a matter to make money for someone else! Done! We could hear it there or here but we still could not see any winners from this ruins!

    9. It was hopeless! You were in depression and all you could do were to google for darkness in the crying and tearing of the market warriors.

    10. Did you feel the hopes was returning or feel the sky would be gone soon?

    11. What do you feel now?
     
    Last edited by a moderator: 21st Feb, 2012
  2. wdongli

    wdongli Well-Known Member

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    Asset management fundamentals?

    Have you read any words about it? No? Have you got a lot of profit when all in the market feel excited and hot? How much is a lot of profit? If you just could get $1 per month, $10 is a lot of profit to you, isn't it?

    Is the paper profit a asset to you? It is even you just don't care about! How many market players really care about the paper profit? All of us care about. However many could manage it properly? Few!

    How many different type of assets do your have? Which assets are critical to the sustained performance? Just have the asset as labor for salary? It is not too bad. How much is it and could you save some of the outcomes from your labor value for the life fortune? Do you feel safe to sell your labor only? Could you get sanctification from this sale?

    How many assets do you have? Could you spread yourselves into different asset types. Which assets are critical for a sustainable financial performances for your life and future?

    Have you failed in one or more critical asset management?

    ***
    How does it fail?

    You fail yourself or others fail you or the environment fails you since you could not see what you should see? US, EU, China, and Australia are part of your market environments or everything for your failure or successes? How could you avoid failures if you could not win?

    ***
    How can it fail?

    I failed since April 2012 since my head was too hot and I put my thought and plan onto the head of Mr. Market. It annoyed Mr Market very much and I had to pay the cost. It was not because Mr. Market, US, China, and Australia were not fair to me. They gave me the chances but I let them pass by this time!

    ***
    What is the likelihood of failure?

    After great recovery from GFC crash, the likelihood of market failure was increased day by day. The EU became more vulnerable. I failed to see the risk spread from it. I didn't know enough China, EU, US, and Australia, have been tied together by some strings we could see or not.

    ***
    What does it cost to repair the damage?

    Could you afford the damage? I could not if I wanted to keep to be a full-time market student. It is not about assets but what cash in and out. You could not just turn yourself to the asset when you have any troubles to get enough cash in for living. Asset selling like houses have to be made you don't have any other options or the profit is so huge and you really worry any crash.

    The cost to repair the damage for my mistakes were too high. I have to turn myself from a profit taker to a cash income earner to avoid sale on fire. Why didn't sell on the fire? It was suicide in market always!

    ***
    What are the consequences of failure?

    Should I buy or sell based on the scenario analysis of the consequences? Seriously saying I started to ask this questions just when I started to play in the stock market but I did fail to ask the same question when the market was hot. My head tended to be much hotter than the market. I did feel I was a little bit super.

    In the market who could be super? How many super men or women in the market and here just cry or cheer as the members of the crowd and hold nothing at last except their own salaries or pensions from somewhere week by week.

    ***
    Never thought them before or even thought but never asked the questions above? You are not alone. Me too! Most of market players are not matured out of their fields in the societies! Ages are valuable for wisdom but also block most of assets from your hand if you haven't hold them in hands before.

    We never tried all for our assets, the stocks, as we did for our degrees, fist jobs, marriages, or fist home houses. Why did I stay in the ruins since the April 2012 and have to build my last defensive line? I failed to ask the right answers even I knew a lot of things in the stock market.
     
    Last edited by a moderator: 22nd Feb, 2012
  3. wdongli

    wdongli Well-Known Member

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    Root causes for profit or loss?

    Too many thought the causes for their losses are external but thought the cause for their successes are their cleverness or shrewdness.

    You and your systems(mentally or physically) could be lucky or bad lucky. You and your system were in the wrong place at wrong time.

    You need to think about how to get a sustainable performance in the market.

    ***
    Have you known any about "Root Cause Analysis?"

    If we often get an unwanted situation which consumes resources, let you feel painful, and tends to happen in a repeated fashion then you really need to do something. It might be beneficial to figure out what is really causing this situation to occur and remove it so the situation does not occur again.

    This is generally referred to as Root Cause Analysis. It is to find the real cause of the problem and deal with it rather than simply continuing to deal with the symptoms.

    How many experienced market players just cried about the consequences and google the symptoms of the systems when they don't have any ideas about what the market is.

    ***
    This raises several questions:

    How does one determine which situations are candidates for root cause analysis?

    How does one figure out what the root cause is?

    Does the removal of the cause entail less resource expenditure than it takes to continue to deal with the symptom?

    Is it economical or morally(to the society as a whole) to remove the root cause for your failure?

    ***
    In the market, it is extremely hard to find the root causes externally. It is huge open control systems and a tiny noise somewhere could cause crowd run crazily.

    Crowd doesn't run always but in chaotic situation, it does and you simply could not do the root causes analysis before it happens since your don't have enough resources.

    However if we have some knowledge about root causes, we may be equipped better than most market players. Have you heard "new era" and "world economies decoupled from the Advanced economies?" Did you cool or hot when you heard them?

    Have you found the causes for GFC before it happened rather than later? Have you sold out even you could not find the root causes for the possible failure before GFC? Did you miss the V-shape recovery? Why?

    ***
    Do you have the capability to question, raise the right question, get the root causes of the your failure and success, or never question but google? Blind reading could not make anyone wise but stupid followers.
     
    Last edited by a moderator: 23rd Feb, 2012
  4. wdongli

    wdongli Well-Known Member

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    Safety mental framework!

    A business needs to develop a safety culture which requires that values and policies are converted to practices and behaviors. The policy of "safe operation is our mission" must be backed with the authority, resources, and tools necessary to achieve the policy.

    A market player need to develop a safety mental framework, which requires that value and rules are converted to cautious market playing and proper behaviors. The rule "fail safe" is the line you have to hold. It has to be backed with the resolution, resources, tools to achieve this goal.

    A market player must understand and believe that safe market playing is a core operating principle in the market. Periodic check your actual practices and behaviors should be used to verify that safety practices and
    procedures are being followed.

    You should learn to reward yourself when you could follow the safety requirements in the market and never tolerate unsafe operation in the market.
     
  5. wdongli

    wdongli Well-Known Member

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    Is it important and critical?

    In the market, feeling is important and critical.

    1. Some just feel not good if they read the words which don't support their primary instincts.
    2. Some just are open and train themselves for chances with affordable risks.

    We could say it is personal tastes but if we are care about consequences more than our own feeling, which tastes should be fostered intentionally, should be obvious.

    All of us need some intelligence. In this sense, it is clear what we need to do. Seriously I would like to take Warren Buffett and his tutor, B. Graham, or George Soros as my tutors rather than to let myself become comrades of the people who just look after their feeling and seal themselves in their box.

    It is shamed to be the partner who are the market babies if you seriously want to learn, grow up in the market, and make your future in the market.

    ***
    The average retail market players, who seal themselves in their personal tastes by following the primary instincts, would fail, which have been proven by the results in last decade.

    1. They didn't, don't, and will not pick stocks well enough to overcome its costs of googling and trading them.
    2. They have spend at high price and get lower return. They could not invert their judgment for better returns.
    3. They have limited time and energy too. Why they upset by words they would struggle to fix their upset. I am very pleased I am not upset by their failed attempts to ignore since I believe they have not this disciplines.
    4. They could pick up one share and see the price up, who has not pick up a good one share just because of the lucks. However with a easy-upset mind and brain, they could not win for long term.
    5. What happen are the more frequently a sealed mind trades stocks, the more it tends to lose. After the pressure of the losing experiences they would cry more tearfully in the ruins and cheer for a tine profit.
    6. So you could regularly to hear these guys to cry or cheer in the highly volatile market, which bounce up and down more than average, are likely to stay volatile.
    7. We have to see a fact a retail market player who burst in a dinner table for their marvelous return, are unlikely to return what they have got to Mr. Market.

    ***
    Mind set defines the personalities. The personalities defines the behavior. The behavior defines what you could get from the market. In my view all of the people with a ignored list have problem to behave as Mr Market wants. They want to control others but they don't have the power to do so. They even could not control themselves.

    Do you feel less crying from these market babies? It is great for the hopes to be ignited. Human has very short memory and tries all to forget their bad lucks. When they do so, they are crazy again and again until they could not sustain the pressure of the loss.

    Don't allow the brainless to stop your updating the mental framework and learn to go your own way! If you are lucky, your intelligence and wisdom would make the chances for you. If you are successful, some of your comrades with the self-reliance would join you.

    ***
    How about the members of the crowd? Don't bother to think about them. They are the consumed commodities in the market.

    Could you feel any wisdom from their painful upset from the words? Could you see any logic to ignore this or that? I just read the art of war again. I just could not find any words to teach people how to ignore in the war.

    Most of these market players have much better spoken English than me but they just could not put the logic words and good enough explanation about their market actions.

    ***
    All what they tell you are how they feel not good since the words they dislike and how they feel fantastic they could hear the words from their comrades or what they like to hear.

    They are not crazy but normal. They are so normal since they are part of the crowd. I really don't expect they would read and could understand the logic and common senses in the market.

    If they feel good I should worry about myself in the market. The market doesn't accept any insanity without matter how crowd the insane people are.

    ***
    The market calls the people who could stand out from the crowd and reward them. I am happy I have passed the stages to feel comfortable if people are upset by my words. I came to the market to do my job not to enjoy as in the pub.

    By the way, CHM has move more than 50% higher than my buying price; FAR has moved over than $0.05; MMR has got good support; All of my portfolio has stabilized and recovered steadily.

    ***
    Last 150 years the capitalism and its market economies have produced 99% of assets which human has made. BRICS is a matter of history. If Western World takes 100 years or more to get so far, the emerging economies would go further with the fluctuation.

    Future is bright at least in my life. I would continue to build my last defensive line, update my mind with the by product, a daily improved English in social term, and grip the opportunities with a businesslike mind.

    Seriously I don't want to upset the dreams of the members of the crowd. I do hope they don't read my posts and hope they are happy in their social life.
     
    Last edited by a moderator: 4th Mar, 2012
  6. wdongli

    wdongli Well-Known Member

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    Chances in optimism and ruins?

    Most of market players are short sight. Their chances of selecting the top-performing stocks by seeing the patterns in the past are little. The market is full of black swans. If you don't know the black swans let alone not understand them you would put yourself in dangerous.

    In statistics, the patterns in the past would be repeated, is odds, no one could really predict when it would be repeated. It repeats but you are not in the patterns could be normal. Have you learned the Wave Theory? Theoretically it sounds good enough for anyone to get enough return but in reality of the past decade, its followers could make their life with the return from their capital.

    How many retail market players have got enough fortune by following their lovely patterns and stopping-losses? At least it doesn't happen to anyone in this forum or any forums I have known. I do know a lot of losers from the belief of the patterns and 'stopping losses." Seriously saying your chances are not zero but they’re pretty close to get your fortunes by using the patterns you could see.

    ***
    There’s good news too.

    1. Understanding why it’s so hard to find a good stock or pattern in future not in the past will help you become a more intelligent.
    2. while past performance is a poor predictor of future returns, there are other factors that you can use to increase your odds of finding a good betting.
    3. If you could not be active for your intelligence, you could use cost-average to build your future finance even you have to be very disciplined and follow it in your life rather than a year.
    4. Fortune does come from risk taking but it has to be affordable. You have to be balanced between bond-type or stock-type market activities.
    5. You need to think about how to get an economical way to diversify your holdings.
    6. You have not be insane when the crowd is cheerful or when you are very desperate or cheerful.

    ***
    Are you fearful? Are you greedy? What is about the chances? What is the time you buy, hold, sell and run away? It needs the soft things which are hide in your brains. Do you have these soft things? If not how could you get them?

    Don't confuse your losing experiences with the winning experiences from someone else. Don't believe you are genius in the market. To be warned if you see too many chances which could make you fortune in years if not days.
     
    Last edited by a moderator: 6th Mar, 2012
  7. wdongli

    wdongli Well-Known Member

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    Swamp between first and last

    Have you questioned why so many IT darling traders gone? I bet few would so stupid to question too much.

    Questions are stupid is what the people, who just want to get what they feel good and desperately want to ignore what they don't want to see and listen, believe. I do believe you have to question and try to learn to question at the points.

    There are basic differences in world and market views, the people's relationship in the market, and independence and crowd.

    ***
    Not very long time, in Ozestock, a discussion about social mateship in market and market forum happened and stopped very badly with cuts on everyone involved.

    Looking back, the guys who wanted the independent minds but welcomed to share different views, were not matured enough. They wanted to be cool about market but they failed to talk damages of primary instincts to the owners without any impulse of emotion.

    It could be understood since they jumped into market for quick money or got what they could not get from their offices too. However they were learning to open minds and they continue to play in the market.

    ***
    The guys who held the mateship as flag for their market playing, desperately cursed, blamed, and worked on this lines or that pattern, but never to make them be disciplined, analytical, and self-reliant.

    They claimed they could easily get millions dollars with stop losses but they could not hold their flag in Ozestock anymore. Why? Loser would lose the right to say anything. Could you see anyone burst their great shirt losses cheerfully in a diner party?

    However after too many bloods flew under the mateship flag, they run away and disappeared in the market and the forum. In the war no losers could keep losing and hold their position!

    ***
    The better a market player performs, the more obstacles he faces psychologically. His head could be hot. Hot heads would make more human errors. Typically the hot heads would buy at peak and refuse to sell before crash. The crash would make him be true loser.

    When a stock picker seems to have the Midas touch, everyone wants to follow him. This is great feeling and could make him crazy and insane to the changed environment. However lucks never could be last too long if no margin of safety support your holding.

    ***
    Have you heard "Asset elephantiasis" before? When a sector earns high returns, new false cake would raise into the sky for crowd. In the lead of the cake, money would often pouring in hundreds of millions of dollars in a matter of weeks or months even not seconds. The funds who have got positions in this sector would be excited and have options for their own benefits.

    However we have to say all of options are bad to the individual market player.
    1. funds can keep the money safe for a rainy day, but then the low returns on cash will crimp the fund’s results if stocks keep going up.
    2. funds can put the new money into the stocks he already owns—which have probably gone up since they first bought them and will become dangerously overvalued if funds pumps in millions of dollars more.
    3. funds can buy new stocks they didn’t like well enough to own already—but they will have to research them from scratch and keep an eye on far more companies than they are used to following.

    ***
    Just assume that
    1. a $100-million Nimble Fund bought in Minnow Corp with 2% of its assets (or $2 million). Minnow has total market value of $500 million. Nimble has bought up less 0.5% of Minnow.
    2. if hot performance swells the Nimble to $10 billion, then an investment of 2% of its assets would total $200 million. It would be nearly half the entire value of Minnow. It is a level of ownership that isn’t even permissible under law.
    3. If Nimble still wants to own small stocks, it will have to spread his money over vastly more companies and probably end up spreading its attention too thin.

    ***
    The logic is true to individual market player too. Paradox is always a matter in the market. It is hard to be balanced in all of the time. It is fundamental reasons few could win long enough time.
     
    Last edited by a moderator: 5th Mar, 2012
  8. wdongli

    wdongli Well-Known Member

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    Take the affordable risks holding the safest cash incomes

    A winner in the market has to deal with the risks and returns properly to get the goals of his playing. Simply saying it needs two actions:

    1. take the affordable risks for better returns than average. This capital could be gone but should have quite high probability to bring in the returns.

    2. take the average return or reasonable higher return than average from the capital for cash flow requirements of the business. This capital and returns must be very or extremely safe.

    ***
    Any actions which will break down any one of these two goals would fail to get the fortune by bad lucks or bad management of portfolio or bad operational procedures.

    Most of retail market players don't understand how to get these goals including traders and so-called investors passive or active ones. Some understand market very well but fail just because they are not lucky enough.

    Never heard anyone could get fortune by using stop-losses with a few lines or patterns. Never heard any passive investors could make fortune through dollar cost average even they could save a little bit more for retirement.

    ***
    Some companies incubate their funds. They run the funds privately and sell them publicly after huge returns from their affordable capital for good risks.

    By keeping the funds tiny, the funds are used for risky strategies that work
    best with small sums of money. It is something like buying truly tiny stocks or rapid-fire trading of initial public offerings.

    ***
    No one could be sure these funds could get successful but If this strategy succeeds, the fund can lure public by publicizing its private returns. Retail market players should know before they are very successful they just could not get the money from the public.

    To raise the return, the fees could be waived even the fee would have to slap back later after enough public money has been got. Almost without exception, the returns of incubated and fee-waived funds have faded into mediocrity after outside investors poured millions of dollars into them. Why?

    It is obvious that a steady funds have to get average return from their main capital for all of expenses. The investors to the funds usually are the passive ones. They don't have the time and passion to know good enough about the market.

    ***
    Most of traders trade for quick money and forget the fact that any big money needs the time to accumulate, the tolerance of human errors, the right judgment at right time and place for right risks, and the accumulation could fail due to tiny calculation or prediction errors.

    Most of retail market players are very smart but they don't have the mind to see big picture, sink themselves into the bottom, and get discount positions. They follow the sentiment too much and then they fall down more than they move up. That is a fundamental reasons they have to stop losses constantly.

    Seriously saying the trading capital should be venture type. But most of retail market players hate to take long enough views and have no gut to take the risks of their venture capital. Constant using "stop losses" reflect the weak gut. The daily price movement can be very big, which could cause losses or profit. In long run all of actions based on daily feeling would be zero-sum.

    ***
    When the traders with little risk capital but quickly change what they have, they like the people who could not do basic check but rush to or run away from one train to another in the station without knowing what next train would do.

    They tend to see the train leaves away without them or stay in the trains on the station or upset on the station without trains.

    Sometimes they are lucky to be on the trains to leave away from stations but they tend to jump down very quickly since the winding change courses let them fearful let alone the sounds from fractions or vibration.

    Most of traders are weak hand with unrealistic concepts and self-reliance about the market and their playing. They need sentimental support from their comrades in the same crowd group.

    ***
    Strategically or philosophically most of traders are stupid even they could be very skillful to find something which are very attractive and potential. They tend to kill the potential at the early stage. They tend to put them on the cliff and decide where they go.

    If you trust your judgment, you have to get the gut to hold your position and never change your course without concerning about the bad consequences and their impact on your life even you could do better letting the risk affordable.

    Right, decisive, and long enough but too too long, are the three element for fortune. However failure could get from anything else such as:
    1. You could be wrong without matter how good you are.
    2. You could be indecisive. The bloods make you fearful. The cake in sky make you over optimistic.
    3. You might be unable to hold your position with any reasons since your baby's brain in the market.
    4. You might hold your position too long since you could not sense the change of the sentiment.

    ***
     
    Last edited by a moderator: 5th Mar, 2012
  9. wdongli

    wdongli Well-Known Member

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    Take the affordable risks holding the safest cash incomes

    Some would win out. Most would lose their venture capital. When you hear any words with too much emotions from anyone, you should confirm that this guy would lose all and gone if he doesn't change. He could be very charming or skillful but he is not a businessman in the wild field or the war.

    It is my experiences anyone who cheers in a group thinking without analysis would fail. Could you see these guys, who tell each other to build ignored list for feeling or taste difference, would fail? I failed when I was this kind of guys. All around ERG as this kind of guys were gone.

    Are you exceptional? I don't believe I could be one. You should not be exceptional too. Winners, who could control their destination and set the course, would be lonely in the wild field and war. In the market winners could not have the power to get followers; losers have primary instincts to get together.

    ***
    Therefore it is wrong to mix the market playing with your social life. I never try to let any of my best friends or my family to cheer for what I do in my market playing.

    You could not be lonely to write for your independent views. Some would read and give you the feeling about involvements. You just need to get the feeling you can go better than you could in the past. You are hungry to realize your personal life in your limitation.

    Time would change things better with your efforts.

    ***
    I just thought if in the last decade I could hold 3 houses with a very stupid brains in business and market, get a few times to hold $200,000, $300,000, or $400,000 paper profit for the periods of months or years in last decade, I should have chances to hold the similar paper profit again.

    However now I know it is matter no one can be sure. If a chance jump to you, you have to take it otherwise you would get more chances to lose your future. I should learn enough to lock the paper profit with my efforts to update my minds.

    Could you? I don't really know and don't want to predict but I just need to be mature in mind and behave as the wild field required. I don't think anyone could predict what will happen but success comes to the prepared hands who is disciplined, analytical, and self-reliant.

    ***
    Do you buy the words from others without self-thinking? No! Do you google for news and popular views? No! Do you ignore others? No! Do you emotional? Yes but I learn how to use it to update my mind and passionate on what I want to do.

    Are you too old to change in revolutionary way? Yes! I want to be evolved for my life goal. Are you painful after you lose any big enough profit and capital? Yes! Very much! Are you cheerful if you win any pennies? No!

    ***
    Are you cheerful if you win a big money? Yes! I tend to be hot and market always cold me down. Are you upset so many mates here want to put your into ignored list? No but very happy! Why? It tells me I am different from them in the market. They could not cool them down with the words and then they could not cool in the market. I would be separated from them by Mr. market.

    I don't want anyone is my enemy in the market but I don't mind they hate me since my words. They are the test stone for my mind updating. You are very provoking in ideas and don't you worry you would lose the support from them? Yes but never personal provoking. It is their own problems if they feel upset.

    ***
    Winners in the war should not cry since the consumed warriors could not understand the right strategy, the right plan, the right behavior, the right strategic intention, even winners want to grow up with anyone who wants to grow up. If the babies cry and want to be in the hell in the market, no one could save them.

    They are matured in social term; they love themselves as anyone else; They accept the words from those they feel have the authorization; they upset any logic and wise words since they just could not see the value; they challenge authorization but with the wrong logic and reasons; Why don't they ignore the words which result in their shirt-losing?

    ***
    They love to trade even full of losing and stopping-loss-experiences; they could accept all from Livermore but ignore the fatal mistakes he had made. They couldn't understand basic logic and self-interest in the market; How many traders hoped W. Buffett would be out of date forever?

    The reality is Buffett still works at 80s in his loving money making business; all of traders in IT booming and crashing time had to choose "run away from the market" or forced to update their mind and change their behavior. Me? One of the guy was forced to update my mind before I completely lost my senses.

    ***
    Could they understand what I am trying to do or what I am writing about? The upsetting minds only have the room to blame, curse, cry, or cheer based on the crowd sentiment. If some words for logic and common senses could force you painful very much what would wait for you?

    Could they understand the art of war? Does the art just have the support/resistant lines, a few of patterns every bums and genius could see, or a lonely operator to click the buttons for a very advanced system or a people who thought about different inputs, feedback, and outputs in constant paradox? So if you play the art without the basic art trainings, what would happen?

    ***
    Do most of the traders understand how to be disciplined, analytical, and self-reliant? They could talk as though they could be so but if you read the words directly from their minds not the words googled got or let them feel logic and wise, could you feel they are primary in minds?

    I am still very primary in this market! I am my own worst enemy in the market. Primary instinct is what I really target! So if the words irritate you too much, it is not my primary intention. I hope all of us could be wise and logic for the profit!

    I fully understand anyone would put me into ignored list. Market is a place you would be ignored by the crowd or Mr Market in his winning list. You choose your future by yourself.
     
    Last edited by a moderator: 6th Mar, 2012
  10. wdongli

    wdongli Well-Known Member

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    Different views of the future

    Everyone has his views about the market, world, and life, right or wrong. What's your view? It is very important when you choose your options and tend to set your tone in future.

    You have to believe on your views if you want to get fortune in the market. If you suspect your views or don't have your own views but follow others' views, you have to work very hard for your own views.

    ***
    I have my own views. I am optimistic for future since future means making. You could make your future based on what environment allows. I could not understand why someone just cry so tearfully for the future in Australia and this world.

    The world, China, and Australia, are much better than when I left China for Europe 25 years ago. Someone said last decade is Asia age and Australia had resource booming.

    It should be reflected in XAO but it was lower than its historical average. It is abnormal. When it tried hard to lead the assumed GFCII it has laid down the future opportunities for new generations in the stock market.

    ***
    It’s a terrible mistake to get pessimistic on the world, US, Australia, Asia, and China. Free market has worked since the industrial revolution. It worked for Western Advanced economies. It worked for Asia. It worked for China where communism was the only belief to be allowed 30 years ago. It worked for Australia. If the sky is there I don't believe it would not work now and in future.

    How many people are pessimists who predict a stock market crash, financial panic, and perhaps a run on the banks in the March 2009? Some need to predict the worst to feed the crowd in the ruins who would like to pay anything who tell them darkness is normal. What could you lose in the crash? What could you get if the system could settle down and stabilized?

    When I read "China is going to tip off" and Australia would have huge empty holes after resources gone, I do feel funny. Someone would always predict ruins, which would happen since it is part of market mechanism to clear it own up. They just tent to go extreme for sensational effects and then they could get more money for their words.

    ***
    A market crash is coming in 2013 or 2014, someone warned in an article in USA Today. “This will be a repeat of 2008-09, only bigger, when it finally hits,” said author of “The Great Crash Ahead.” I do feel it was a typical intention to sell the monkeys to the stupid villagers.

    Ocean moves in waves. It is not bad to prepare the valleys but it is stupid if anyone just cries.

    Just read and ponder. It was said if there is a financial panic, it could trigger a run on the nation’s banks that might cause the government to invoke “economic martial law.” It was the similar to say you would die if a terrible accident happens to you in the freeway!

    ***
    It is never easy to make fortune but it is evident the current generations have better life than the past generations. We all could sit down at the start of every year and find a lot of reasons why things are terrible.

    But the truth is, this market economy works wonderfully. It has internal motivation to make the economies better even this would make the crowd cheerful and force the economies go into its extremes. Of course it isn’t working for everybody at any given time. It never works for my fortune but it is not its problem but those in my mental framework.

    The economies have recovered from the a terrible shock that it received in the fall of 2008. EU issues, China's problems, and Australia's problems are the secondary risks after the whole world tried to save the sky.

    ***
    US is still the real leader in global economies and politics. China could go so far just because it has the gut to start to follow the market economic ways. However it still needs long way to go for the structural reforms, which seems unavoidable and would open more chances for itself and the world.

    Buffett said that the U.S. financial crisis in 2008 was an “economic Pearl Harbor.” The country had never seen this kind of financial panic before. The country almost stopped. And that financial panic bled over into the general economy very quickly and very severely. And US has been coming back now and it would continue to come back without matter people like or dislike.

    GFC and the crashes in last two years have successfully crash down the crowd and let them more behaved. When XAO tried to lead the world into assumed GFCII, it had made a better time to buy since all of value accumulated in resource booming before GFC has been given up by the market crowd.

    ***
    Any great crash set the tone for positive next 10 years in history if we exclude the war effects. This is a better time to buy stocks than 10 years from now will be, Buffett said. It is illogical to predict the darkness in winter since seasons would be exchanged.

    Believe the optimists or the pessimists? The answer is to believe in yourself if you have ever tried to update your mental framework. We could not get consensus views about the future. You have to be optimism when the crowd in ruins even the fact is no one really knows, so make your own informed, thoughtful decision.

    I bet I would get next chance to get another big paper profit in next 2-10 years. I would get myself ready to lock the paper profit, deleverage when all want to get margin loans. I have to win over myself and the crowd. Let them predict and guess while I prepare by updating my minds.

    ***
    Once upon a time,

    1. one smart mate in my forum warned us market was about the man who had the monkeys, and the villagers who stupidly bought the monkeys for nothing;

    2. by that time I believed that sometimes the market was like that very much but it was not always like that;

    3. I would like to be the man who has the money. It needs the gut to buy the monkey when it could be caught just for free. I want to be the man to sell the shares like the monkeys to the stupid and hot-head crowd.

    4. I prepared very hard for the time when monkeys could be sold at very high price. Then the time comes in. I sold my monkeys with the locked profit.

    ***
    It let me get the points about how to make the money in the market. I felt I passed by a threshold in my mental framework updating. Since then I really know the market and how to deal with my human errors. I was very lucky to learn a lot from my lessons, which let me to build my last defensive line rather than to burn the money on the fire.

    Of course you would guess the story teller would be beaten terribly by Mr Market but you are wrong. He started to change then and very successful in the market now.

    Could we get the happy ending? Let's wait and see patiently.
     
  11. wdongli

    wdongli Well-Known Member

    Joined:
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    Posts:
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    Perth
    Competence in safety for profit

    What is your market advantage? Competence, right? Have you asked what kind of competence for what you look after?

    If you just feel upset for the poor villagers who bought monkeys for nothing commercially, you may have the competence for social matters but not in the stock market. I don't want this kind of competence in the market.

    Competence is closely related to the individual's understanding of their role in safe operation of stock market. Competency is affected by the availability of information and procedures, as well as data integrity, consistency and quality, associated with your profit goal.

    Market activities associated with the protection and safety in the market are task oriented such as when to buy, hold, and sell. Focusing on day-to-day task execution can lead to a narrow understanding of facts and procedures and underneath causes for the movement.

    ***
    When the underneath causes of the movement are not well understood, it is easy for actual practices to deviate significantly from expected profit practices.

    It tends to result in losses from your activities rather than profit. When the people focus on the losses, they could not have room to think about what cause the losses. They do need to stop losses for better feeling.

    Without a good enough mental framework, the risk management procedures, the purpose of essential activities often become known to only a few individuals in the market. Most of market players fail to do the right thing at right time for right reasons.

    ***
    We need to buy discount or pay less than what we would get from future selling. You have responsibility and should understand how to execute buying for margin of safety.

    Competence can be gained through general education, process training to buy discount, skills-based training, and hands-on experience. As procedures are developed to support your wise buying, you would buy in time average and diversification.

    As you grow up you may want to get the control for what you buy. Have you planned to get a position in the board room for the business you love and have vision of its future?

    ***
    It is better you should understand that in a pressure situation, which is normal in the market, it is the individual's belief system that is most likely to determine the individual's actions, not simply knowledge.

    Why do you "stop losses" so rigorously? It is because you believe it can stop any risks and make your fortune, even it is not true under all of conditions. Why do you buy dirty-cheap fishes even the time was bad for them? It is because you believe they could shoot up into sky even it could not be true always.

    Sustainable performance in the market is achieved when you believe you are right and your mental framework could let you believe you are right. Right or wrong? It depends on your intelligence of your framework. It is about how to get the intuition for your buying, holding and selling.

    ***
    Lessons learned in ruins and peaks should be brought into our hazard and risk analysis in the market for safe profit. It is to ensure that assumptions on

    1. the discount in the buying,
    2. the future promising facts to hold what you have got,
    3. the discount losing,

    made in the analysis agree with the real world. Usually what we assume have big gaps to the market reality since there are always things we don't know.

    ***
    It is normal in the market that our assumption is wrong since our own limitation. It only could be found by inverting what we assume initially.

    We could be upset for what we found against what we assume but it actually is necessary to reduce risk. It should be a happy matter since profit is the only goal in the market.

    So the hazard and risk analysis to the capital should be periodically done to see if high probability to lose the capital and profit.
     
    Last edited by a moderator: 11th Mar, 2012
  12. Tropo

    Tropo Well-Known Member

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    Last edited by a moderator: 17th Sep, 2016
  13. voigtstr

    voigtstr Well-Known Member

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    Hobart
  14. wdongli

    wdongli Well-Known Member

    Joined:
    31st Mar, 2010
    Posts:
    1,292
    Location:
    Perth
    Haha, it is a topic the losers without self- and environment-awareness love.

    They care about their feeling and annoyed to be called as idiots. Can we make anyone to be an idiot?

    We are not so powerful and Mr Market is the judge only. Do feel it is idiotic to control what we could not!

    I am not qualified to call anyone as an idiot let alone I was really idiotic, crazy, and self-promotive for nothing in the past and the stock market.

    I feel shamed I didn't start updating my mind before the IT bust.

    I feel unlucky I could not start learning how to play in the market when I was 17, let alone chose a great tutor for it. It is a logic you need to lear form great and then you have chance to be great. Now I refuse to follow the medias and the people who sell the words for living or hobbies.

    I feel urgent to update my mind.

    I feel sorry I had desperately tried to prove I was not an idiot with the flamed words before 2006. It actually proved I was very idiotic.

    I feel it is fatal that I am idiotic but I don't know and don't admit.

    What do you feel after crying in the ruins with the expect all would be in the hell? Still feel the lines and patterns make you unchallengeable?
     
    Last edited by a moderator: 11th Mar, 2012