![]() | |
![]() | |
![]() |
Investing Information |
|
![]() |
Seecrets on Investment: Tired of Making Huge Losses in the Stock Market - Part 1
Over 80% of all individual investors lose money in any given span of ten years. This figure is likely to be higher, given most people's reluctance to reveal their losses. This article provides a broad outline of this financial landscape. It reflects the author's personal views as an individual investor and author of a stock charting software with the experiences learned from the University of H.K. (hard knocks). Do not consider this article as any form of financial advice. Financial advice are available from licensed individuals and companies as required by law in your respective country. Investment is a statistics game. You win sometimes and you lose most of the time. To stay ahead, all you have to do is to make sure that your gains are more than your losses. More importantly, how to limit losses and reduce the mistakes will be crucial in successful investing. Take a typical fund manager. Out of ten positions, the fund manager may only win 40% of the time. Say, this manager makes an average return of 20% for each position. The rest are mistakes, but this manager capped the losses at 10% each. Do the simple math, and lo and behold, this manager is ahead with gains. This is a simple example - professional fund managers use complex variations of this simple theme. Another example is the venture capitalist. Say, out of ten ventures, only one succeeded. The successful venture could yield returns of 2000%, perhaps more. The other nine ventures failed miserably and these investments are written off. Using this model, the venture capitalist is still ahead. Headlines, the media, advertising hype.Most of us are familiar with this typical headline: "Whiz kid makes stock picks that outperform the market than most fund managers". When such stories becomes headline news on the popular media, it is likely that they appear towards the end of a great bull market. Stories like these typify the misconception that anyone can pick stocks at random and win all the time. Perhaps, a more tantalizing advertisement with "How I make 2600% (annualized) on a winning trade" may make us interested. Any seasoned investor will be able to provide a handful of trades that has spectacular performance like 50% in a week. Annualize this and it works out to be 2600% a year. However such trades are few. There is no one in the world that has such a method or strategy that is consistent and sustainable. It is prudent to treat media reports with a critical mind and skepticism. Rationalizing the possible reasons on why the story appears may provide some useful and not so obvious insights. For example, if you have a large position in a stock, then obviously you will only sing praises on why it will outperform its peers to encourage more buying momentum. The author remembers an analyst private statement: "I can write fantastic merits about a stock, conversely I can also write some damning things as well". Market gurus, financial astrology, divination.Joseph Granville, a market technician, started his newsletter (Gransville Market Letter) in 1963 and is still going strong at age 80+. He was accurate to predict the market decline in 1976 but was wrong in 1982 and 1995. Given the statistical nature of investing, he had his successful calls and his fair share of blunders as well. The redeeming feature of this man must be his willingness to apologize for his mistakes. Why do people continue to subscribe to his newsletter? This author suspects that his loyal customers are those who can form their own opinions and views on the market but, they are receptive to a different perspective or viewpoint they may have missed in their own analyzes. It is the same with other reputable market gurus. It seemed the media and the public are intolerant of their success rates as being not good enough. The forecasts of these market gurus should be treated like a tsunami early warning system. Nine times out of ten, the warning turns out to be false and people accept it and go own with their normal lives. Every warning is taken seriously and the costs of taking precautions are minimal. When a warning turns out to be accurate, it will save lives. It should be the same with these market gurus' predictions of market crashes. Investors just have to prepare themselves as they would with an impending tsunami warning. After seeing a BBC program on Membrane theory, 11-dimensional worlds and parallel universes, financial astrology, feng-shui and other methods of divination may have some merit. This author encourages investors to have open-minds and more importantly, understand the strengths and weaknesses of any method. By capitalizing on the strengths, one can indeed enjoy the benefits. The concluding part 2 will provide an outline of fundamental analysis, technical analysis plus some tips on successful investing. You may freely reprint this article provided you publish it in its entirety, including the author's bio and activating the link to the URL below. The author, Stan Seecrets, is a veteran software developer with 25+ years experience at (http://www.seecrets.biz) which specializes in protecting digital assets. He has developed real-time prices delivery systems and has witnessed stock markets collapse of 1987 and 2000/2001 in real-time. You can contact him via email (Stan at Seecrets.biz). © Copyright 2005, Stan Seecrets. All rights reserved.
MORE RESOURCES: How Intel Instantly Slashed Costs By $4.2 Billion The Motley Fool IBM Grows Free Cash Flow but Will Likely Miss 2024 Goal The Motley Fool Investing in Waste Management (NYSE:WM) five years ago would have delivered you a 93% gain Yahoo Finance How Much Income Can You Make Investing $10,000 in Warren ... The Motley Fool Tax-Aware Investing: What Is It and How Do I Do It? | Chase Chase News & Stories Investing in Method Andreessen Horowitz Committee affirms anti-ESG, anti-China pension investing bills Indiana Capital Chronicle Investing When Your Time Horizon Is Short The New York Times Investing in Voldex Andreessen Horowitz A conservation legacy is possible by investing now Santa Fe New Mexican Democratic lawmakers create sustainable investment caucus to ... Pensions & Investments How ‘Permabears’ Make Money by Selling Fear Investing.com Why You Should Invest: Top 10 Reasons AllBusiness.com What's Going on With REITs? An Investors Guide The Motley Fool The 10 golden rules of investing Yahoo Finance Where Are Stocks, Bonds and Crypto Headed Next? Five Investors ... The Wall Street Journal 2 FAANG Stocks Investors Should Buy Hand Over Fist for 2023 The Motley Fool Investing in Cygnvs Andreessen Horowitz Ultimate Guide on Investing for Beginners Entrepreneur Investing, thriving with automation - free webinar registration Today's Medical Developments Investing in PLAI Labs Andreessen Horowitz The 5 Most Dangerous Times to Trade Investing.com Investing $100,000 in These Stocks in 2023 Could Get You $1 ... The Motley Fool The Art of Contrarian Investing Investing.com Investing in REITs vs. Direct Real Estate Morningstar Your Investment Lost Money Last Year. So Why the Big Tax Bill? The New York Times Investing in 2023: A Year to Be Patient and Selective Morgan Stanley 80% of Warren Buffett's Portfolio Is Invested in These 7 Stocks The Motley Fool 5 Investing Alternatives for Conservative Investors Kiplinger's Personal Finance Investing Action Plan — January Wrap: Apple, OPEC, Exxon And ... Investor's Business Daily 8 Best Small-Cap Value Stocks to Buy | Investing | U.S. News U.S News & World Report Money SP&500 Earnings: Megacap Week Investing.com Soft Landing Scenario: Possibility or Fed Myth? Investing.com U.S. Warns Banks to Watch for Russian Oligarchs Investing in ... The Wall Street Journal Spend Your Time Working or Investing? » The Stacking Benjamins ... - The Stacking Benjamins Podcast Spend Your Time Working or Investing? » The Stacking Benjamins ... The Stacking Benjamins Podcast 1 Undervalued Stock That Smart Investors Are Buying In 2023 The Motley Fool Gold Sentiment: Room for More Bulls Investing.com 1 Smart Way to Invest Your Tax Refund You Haven't Thought Of The Motley Fool Rewind 2022: My Investing Journey Seeking Alpha Personalized Investing Portfolios: Unlock the Greatest Potential Kiplinger's Personal Finance Long-Term Investments Require a New Approach Kiplinger's Personal Finance Is Intel's Downfall Good News for AMD and Nvidia Investors? The Motley Fool Calm Before the Rally? Investing.com Gold: Bears Look Aggressive Before Fed Speaks Investing.com Rosie on the House: Investing in a whole home energy audit Arizona Daily Star Coffee Steaming Again After 4 Months in the Cold Investing.com The Week in Impact Investing: Integrity ImpactAlpha The First ETF Launched 30 Years Ago, Revolutionizing Investing The Wall Street Journal Would You Still Consider Investing in Amazon (AMZN)? Yahoo Finance Last Year Investing Seemed Easy. Not Anymore. The Wall Street Journal Continuing to Strengthen Our Jobs and Invest in Our People Walmart Corporate Suze Orman Believes in Long-Term Investing. This Is a Great ... The Motley Fool |
![]() |
![]() |
![]() |
RELATED ARTICLES
Your Worst Enemy To Successful Investing - The Media How do you make your investment decisions and where do you get your information? If you're like most of the people I know, you look to the experts.That's fine, however it's important to be aware that for every expert, there's an opinion and for every opinion there's an expert. The Biggest Oil Opportunity in the World - And How You Can Profit From It Where is the second biggest deposit of oil reserves in the world?In the oil sands region of Alberta, Canada. Oil sands are a thick, viscid mixture of bitumen, sand, clay, and water. Consolidation Period The economic data reported Fri showed continued above trend growth with disinflation (at the core level, excluding food and energy) in the second quarter. Real output growth has slowed from about 4% in 2003 & 2004 to just over 3 1/2% so far this year, while a core inflation rate fell from 3% last quarter to 2%. Investor Guide to Financial Health Step 1: Spend less than you earnPerhaps the simplest financial concept is the toughest for us to conquer- spend less than you earn. After paying your living expenses (bills, loan and mortgage payments, cost of food, charitable contributions, taxes, etc), you can begin to save and invest toward your future. Seecrets on Investment: Tired of Making Huge Losses in the Stock Market - Part 1 Over 80% of all individual investors lose money in any given span of ten years. This figure is likely to be higher, given most people's reluctance to reveal their losses. Wit and Wisdom on Money, Wall Street and Success - Part #1 I love to collect quotes as they concisely promote a philosophy which is readily understandable.In my 25+ years of investing I have collected hundreds of quotes related to Wisdom, Wall Street and Success. Foreign Investing - US Investors Still Missing Out? Investors are still too slowly realizing what the academics have long pointed out -- adding foreign stocks to your portfolio will, over the long term, increase your returns and lower the overall risk of your portfolio.US investors embracing foreign investing are both realists and optimists. Finding a Broker "Hey Joe! I need help finding a broker. I notice that discount commission rates are pretty much the same. Stocks: Reduce Risk Yet Maximize Profits It is important to note that every smart investor wants to minimize risk while maximizing profit potential. Yet conventional investment theory tells us that in order to increase returns, you have to increase risk. Keeping It Interesting Some lines from a movie never leave your mind; I don't remember the context always, but I do recall the dialog. "The Big Chill" is one of the few movies I own (VHS). Types of Investment The word 'investments' is one that most of us are familiar with hearing in financial context. For many of us, it may make us thing of big business and vasts sums of money, but there's much to the world of investments than multi-million dollar deals. Retirement - Its Sooner Than You Think!! (Honestly) Many people hear "retirement" and think- what? 401K? Roth vs. Traditional IRA? Stocks, bonds, mutual funds? Do they?Or do many people put money away according to the suggested amount and then simply hope that when retirement comes all will work out?One report I read estimated that 66 million Americans have put away a Whopping $0 towards retirement. Asset Allocation Lessons: The 70% Inflation Solution For investors only.. Finding the Perfect Company The perfect company - it's the holy grail of the investment world. The company that will make its initial investment hundreds of times over. Day Trading Strategy or Stock Trading Software? The Way You Pick Stocks Affects Your Results The trading method you employ to approach the stock market can make a big difference in your results.Stock trading is a very competitive field and in order to succeed you need to FOCUS on a set of simple strategies that you can implement without hesitation. Keep Stock Market Investment Profits Have you had one of those huge investment winners - a stock that went from $2.00 to $80. Risk and Reward If you are doing your own investing in the stock market, what would be the first question you would ask yourself before you make any trade or investment? If your answer is how fundamentally sound the stock is, or whether the stock just broke out of a trading range on a chart, or the fact that the stock has gone down 50% in the last 6 months, or whether the volatility is low now so it is a good time to buy or sell, then you are probably on the road to ruin. These strategies have nothing in common with each other and there are all kinds of different criteria that I did not mention that have nothing in common with each other. Tyranosaurus Rex Everyone knows T Rex was the most fearsome of all dinosaurs. He could and did kill everything in his path for food or maybe stupid meanness. Trading Baskets Part I Q. What is a basket?A basket is a group of up to 50 stocks that you can trade, manage and track as one entity. Part II of Day Traders and Swing Traders and Options? Maybe! Before every protective put trade it is possible to calculateyour anticipated maximum loss. Use the formula: (stock priceminus strike price) plus option price. ![]() |
home | site map |
© 2006 |