Saturday, February 28, 2009
A colorful tomorrow
In his annual report, Warren Buffett said America has faced bigger economic challenges in the past, including two World Wars and the Great Depression.
"Though the path has not been smooth, our economic system has worked extraordinarily well over time," Buffett wrote. "It has unleashed human potential as no other system has, and it will continue to do so. America's best days lie ahead."
I totally agree with him as human being, but disagree as an investor. If following his "buy and hold" stratergy and having bought his heroic call last Nov, you will not live through this dark time. You are out of ammo by now.
"Buy when others fear" is a good investing stratergy and works most of times. However, even most sounding method could lose its magic, which does not mean it is not good, nothing is perfect. Unfortunately it does not work quite well this time. You have to prepare yourself for the worst outcome, which Warren Buffett did not outline you, no other so called professionals ever did. And that is why I am pissed.
"Though the path has not been smooth, our economic system has worked extraordinarily well over time," Buffett wrote. "It has unleashed human potential as no other system has, and it will continue to do so. America's best days lie ahead."
I totally agree with him as human being, but disagree as an investor. If following his "buy and hold" stratergy and having bought his heroic call last Nov, you will not live through this dark time. You are out of ammo by now.
"Buy when others fear" is a good investing stratergy and works most of times. However, even most sounding method could lose its magic, which does not mean it is not good, nothing is perfect. Unfortunately it does not work quite well this time. You have to prepare yourself for the worst outcome, which Warren Buffett did not outline you, no other so called professionals ever did. And that is why I am pissed.
Friday, February 27, 2009
Major phases of a bear market
Historically, major bear markets have also followed distinct patterns.
1. First phase
There is a sharp initial fall that removes much of the 'froth' from the market.
2. Middle phase
There is a strong rally in prices for several months, which may lull some investors into thinking that the bear market is over. The rallies can be dramatic, but have lower trading volume than the initial sell-offs. And the advances tend to be concentrated on a few selected stocks, not the whole market.
3. Third phase
There is a long slow downward grind in prices, accompanied by low volume and periodic false dawns until the bear phase ends quietly as share valuations reach rock bottom. At this point, few investors from the earlier buoyant phase in the market are interested in anything other than the most conservative investments.
Which phase are we in?
Via Investment Bloggers' Digest
1. First phase
There is a sharp initial fall that removes much of the 'froth' from the market.
2. Middle phase
There is a strong rally in prices for several months, which may lull some investors into thinking that the bear market is over. The rallies can be dramatic, but have lower trading volume than the initial sell-offs. And the advances tend to be concentrated on a few selected stocks, not the whole market.
3. Third phase
There is a long slow downward grind in prices, accompanied by low volume and periodic false dawns until the bear phase ends quietly as share valuations reach rock bottom. At this point, few investors from the earlier buoyant phase in the market are interested in anything other than the most conservative investments.
Which phase are we in?
Via Investment Bloggers' Digest
Thursday, February 26, 2009
No sector rotation!
All the sectors on my screen are under the declining 30 day moving average, the biotech is the latest joining the bear party. Even with recent strength from the banks, the others still want to go down. No more sector rotation, bulls have no where to hide this time.
It does not look like a bottom to me!
C has been bouncing, but the bounce is weak. It does not look like a bottom to me, which is scary.
Wednesday, February 25, 2009
Waiting for something big to happen?
We are either building a bottom or waiting for another nasty surprise. I would say the latter has a better chance.
Monday, February 23, 2009
I am just so pissed
I have to spit it out. I have taken this for too long. What do I talk about? I am talking about the irresponsibility of our so called financial professionals. Jim Cramer, Warren Buffet, Doug Kass, the list goes on. They act like knowledgeable people, calling buy this buy that on TV, on radio, on Internet. But they never tell you what and how to do if their predictions are wrong. Nobody can be 100% correct in the market. If they are responsible, they should have told you what the stop is, or what the next step is to save the position. They never did. They give you a start, but not ending. A 10 year old child can do that is OK, not professionals with thousands of followers.
Saturday, February 21, 2009
Against the new proposed tax!!!!
A proposed tax is making the rounds in Congress. A financial-transactions tax on the sale or transfer of financial assets - 0.25 percent of proceeds and purchases - is a disaster to traders, even if you sell it at a loss. A 0.25 percent financial-transaction tax on $10 million of proceeds OR PURCHASES equals a tax of $50,000 per year. This is even if you lose money on those trades!! This tax applies to stocks, options, and futures.
Please sign this online petition:
http://www.rallycongress.com/no2tradertax/1536/
Please contact your local senators and voice your disapproval:
http://www.senate.gov/general/contact_information/senators_cfm.cfm
Please contact your local Representatives and speak your mind:
http://www.house.gov/house/MemberWWW.shtml
Please sign this online petition:
http://www.rallycongress.com/no2tradertax/1536/
Please contact your local senators and voice your disapproval:
http://www.senate.gov/general/contact_information/senators_cfm.cfm
Please contact your local Representatives and speak your mind:
http://www.house.gov/house/MemberWWW.shtml
Friday, February 20, 2009
Wednesday, February 18, 2009
React, not predict!
If you ever leaned anything from the disgusting decline of 08, it should be "don't ever listen to professionals' predictions". ONLY REACT. If you listened to Warren Buffet's heroic speech and bought his predictions last year, you are in deep water right now and do not feel any patriotism any more.
Why it does not work? Simple, because you are not Warren Buffet. You are a small investor with limited capital and limited financial tools while he has billions of dollars at his hands that he can average down or deploy other methods to cut the costs down. So even if his prediction is wrong, he could still make it work. But you, you are dead when you have a fatal mistake.
So as a small investor, only way to survive a brutal market is to look at the charts and to react.
Why it does not work? Simple, because you are not Warren Buffet. You are a small investor with limited capital and limited financial tools while he has billions of dollars at his hands that he can average down or deploy other methods to cut the costs down. So even if his prediction is wrong, he could still make it work. But you, you are dead when you have a fatal mistake.
So as a small investor, only way to survive a brutal market is to look at the charts and to react.
Tuesday, February 17, 2009
Steel sector
I wished the steel sector could follow China, it followed for a day or two, but did not get a chance to break out before China pulls back. As soon as China market softens, we break down and take the dive. Totally a loser behavior.
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