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Money Money Money Overnight Affluence

Discussion in 'Snippets of Life (Non-Fiction)' started by Thyagarajan, Feb 15, 2019.

  1. Thyagarajan

    Thyagarajan IL Hall of Fame

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    :hello:MONEY MONEY MONEY OVERNIGHT AFFLUENCE :hello:

    It is said God helps the bravest. but certainly not in stock market.

    When every one is scared you dare and if every one dares you be scared. This philosophy of Berkshire veteran seems to be quite sound. But in Indian context it failed.

    I have been trading since 1983 ie over 35 years. So One may think I can write best my experience.

    I was studying charts learnt statistical methods, minimum deviation et al, three low lows and three high highs but all in vain. It all turned out to be a past time.

    One fellow advised multibaggers giving well analysed report from all possible angles but all failed miserably some wound up with huge liabilities went down with winding up petition etc.

    Every time a Trump makes a statement -perhaps astounding - heralding doom for the markets of the economic world - stocks take a nosedive. It is said that If US sneezes Asian Markets catch cold or pneumonia. All investors' calculation definitions goes into haywire and in doldrums.

    Trading seemingly innocuous activity. It is as harmless as eating cone of an apple pie with ice cream . But yes, when one goes for 5th and 6th in a day, he or she would obviously catch cold.

    Trading can be pleasant only when you make money. At times it could be a windfall profit as in some mega IPOs (initial public offer). When headwinds blows there goes investors' money down the drain.

    What makes trading dangerous is the timing.. And yes, it can be awful. It can be destructive and humiliating. A series of bad trades announcements, insider trading can shatter the trader's belief in himself. This is how trading is dangerous:

    1. Trading losses can wipe off one's capital and drive one away from the market. At times, forever.
    2. Intraday trading is a roller coaster ride. It can subject one to extreme emotions of invincibility and pauper within a short period of time.
    3. It can make one believe that everyone else is stupid. “Why are these people working 80 hrs a week when they can earn a month's salary in a day?” It may look there is shortcut to richness and overnight affluence.
    4. It can make think one is a loser even if one is not. Many traders cannot help but regret those trades where they would have earned much more had they not exited early or the trades where they would have not lost much had they made an early exit.
    5. One often fails to understand that one 'wins' when one is on the right side of the trend.
    6. Wins or loses in the market should not be taken personally.
    One must remember that although markets are getting increasingly dominated by high frequency trading systems, it is humans like you and me who design these systems.

    These systems can act only in the way they are conceived or programmed. These systems cannot ever be a replacement for the human mind. These systems will try to fit new occurances in their own scheme of things.

    These systems obviously lack the human quality of curiosity. They will fail in case of a black swan event. ( Black Swan Events - What Is a Black Swan? - The Ticker)

    Only a very small insignificant % of the retail investors make money in stock markets. Whether an investor makes money or not, the brokers or the broking community would always comfortably get their commissions leaving family of investor into bickering


    Technology facilitates and make it far easier for the brokers to make huge monies by advising every time 50 % of their investor subscribers to buy a certain quantity of equity of a company and the remaining 50 % to sell the same equity same quantum and collect their broking fees from 100% of their investors thus they engineer the market price fluctuate in specific trange of the equities they like. The retail investors thus always left on tenterhooks and trying to attain their goal - a mirage- at some point of time

    Stock market becomes a cauldron or casino when one trades every time sit in front of a trading terminal. It will not be so, if one decides to take only those trades where the rewards far outweigh the risks.

    The secret of success in trading lies in knowing when not to trade. The lesser one trades, the better are the trades one selects.
    Better invest in metals like silver and gold WHERE CHANCES OF EROSION OF CAPITAL OR WIPING OUT OF CAPITAL SELDOM TAKES PLACE. Over long periods, you might have not only saved your costs but left with at least Ten percent annual returns. TEN PERCENT OF WORLD AVERAGE PRICES OF SILVER AND GOLD COMPARED and found silver returns far superior than virgin gold.

    Having said all the above I must confess that I am still learning how to be a good investor. I remember tamil words of my school teacher காசு லேசா காசாலே சா KASU LESA KASALE SCHA (Money:screamcat: not easy to get - in money people die)

    GOD SAVE THE GREEDY ones AND ADVENTURISTS and their families health!
     
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  2. Amulet

    Amulet IL Hall of Fame

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    Investing connotes patient capital. Trading doesn't.
    :thumbsup:
    Link to the joy of gold shopping: When All That Glitters Is Gold
     
    Last edited: Feb 16, 2019
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  3. lavani

    lavani Platinum IL'ite

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    stakes are getting higher . with machine learning and AI on its way.
     
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  4. Thyagarajan

    Thyagarajan IL Hall of Fame

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    @Amulet
    Thanks for your maiden response with thumbs up smiley to my thread.
    JAN 15 & 18, 2019 I had stated my views in the lovely thread you had cited above and in that i enjoyed reading your FB and from other veterans too.
    @lavani
    Thanks for your FB.
    I agree with the advent of machine learning & AI, THE GAME PLANS might change but I still strongly feel the retail investors or traders including senior citizens would eternally be left high and dry
    Regards.
     
    Last edited: Feb 16, 2019
  5. Cheeniya

    Cheeniya Super Moderator Staff Member IL Hall of Fame

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    Reminds me of the famous song of Abba:
    Money, money, money
    Must be funny
    In the rich man's world
    Money, money, money
    Always sunny
    In the rich man's world
    Aha aha
    All the things I could do
    If I had a little money
    It's a rich man's world
    It's a rich man's world
    (Sorry for the jolly digression!)
     
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  6. Viswamitra

    Viswamitra Finest Post Winner

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    Dear Sri Thyagarajan:

    A very well researched article. There are some specialists in the US who claims that they are very good in predicting recessions. When some economists are mostly successful, others are 50% successful. It is very easy to predict recession once you know the PE multiples are at the highest beyond a rational levels. But predicting the lowest level of the stock market is hard. When one thinks it can't go any lower, the market tanks further. This is when people like Warren Buffett are very good. He doesn't worry about his investment dropping for a while because he knows they will all do well eventually. During 2008 stock market tumble, when the federal government was rescuing "too big to fail" financial institutions through tax payers' money, he started betting on select financial services company and enjoyed some great level of appreciation in value.

    Remember the days cotton betting was banned by the Government of India knowing that select underworld dons were playing the price of cotton in Mumbai? Commodities market is very volatile too and subject to wild fluctuation. Oil is one of them now as it fluctuates so frequently. The other big risk item is trading in foreign exchange. Unfortunately, this market is open 24 hours a day all 7 days. Betting on pair of currencies is like betting on the entire economy as a whole.

    Day Trading is very different market segment when compared to investing based on fundamentals of the companies. Day trading relies entirely upon the demand/supply situation for a short period of time. They analyze bid/ask dividing the entire trading day into 4 quarters watching the stock price pressure. It is considered as rapid but multiple short-term investments and those investments don't look for high prices but targeted price increase/decrease within a certain period. The day traders don't worry about the stock price increasing further if it reaches their target price.

    Regarding Black Swan, 9/11 report gave some insight into how the terrorists who coordinated the attack on twin towers funded their operations using stock market in Europe.
     
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  7. Thyagarajan

    Thyagarajan IL Hall of Fame

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    :hello:Absolutely delighted with your FB- a a fantastic trigger to my days in 1976. My class mate and one of my bosom friends mr TK took me from a ship to Talk of the Town OVERLOOKING THE ARABIAN SEA when it was evening near queen's necklace. Yes in then Bombay.
    Ms Usha (Utoop) the then pop queen was holding the mike tapping her foot clad in beautiful pink silk saree singing with chin up in bright light This particular song. I was enthralled while penniless awaiting to get my last two months salary. My purse was empty.
    TK then took me around 9pm to Hotel Purohit adjacent to Ambassador and ordered thali. Over 15 dishes on a large Silver platter- Gujrathi style food then costing Rs 100. In the juke box some one there inserted repeatedly the coin to listen to this song again and again. Such waz the craze for money money song.
    Thankz for the nostalgia.
    Regards.
     
    Last edited: Feb 16, 2019
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  8. Thyagarajan

    Thyagarajan IL Hall of Fame

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    :hello:Thanks for enriching the thread with your valuable inputs and the difference in various types of investment avenues across the globe.
    Thanks for the enlightenment.
    Regards.
     
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  9. Thyagarajan

    Thyagarajan IL Hall of Fame

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    Addition to my thread as below:
    How brokers giving tip to a mass turns millionaire.

    Read in quora sum and substance as below.

    Mr. K (the broker) stealthily acquired a database of name, email address, phone numbers, etc. of nearly 6000 active traders (those who trade more than 3 to 5 times a day).

    He sent bulk mail through SMS and E MAIL messages with his intraday and long term calls offering very high returns for free (with a disclaimer that once they are comfortable and convinced with the tips, they may sign up for their paid monthly advisory services).

    Next day, 5000 people signed up for a monthly non refundable fee of ₹ 200each. He made cool ₹ 100000.

    During the signup process, it was mentioned that tips/calls would be provided thrice a week (Monday, Wednesday and Friday) for intraday as well long term trades.

    Monday - He sent his intraday calls of buy & sell to 5000 customers in this manner. Half the people were told to buy stocks A, B, C, D, E and remaining half were given the call to sell these stock. Intraday gain mentioned were 2–4%. Obviously, one half of these people made money. End of the day 2500 people made money.

    Wednesday - He sent his intraday calls of buy & sell to 2500 customers in this manner. Half the people were told to buy stocks F, G, H, I and remaining half were given the call to sell these stock. Intraday gain mentioned were 2–4%. Obviously, one half of these people made money. Those who lost money on previous trading calls, ignored his advice. End of the day 1250 people made money.

    Friday - He sent his intraday calls of buy & sell to 1250 customers in this manner. Half the people were told to buy stocks F, G, H, I and remaining half were given the call to sell these stock. Intraday gain mentioned were 2–4%. Obviously, one half of these people made money. Those who lost money on previous trading calls, ignored his advice. End of the day 625 people made money.

    Next Monday - He sent his intraday calls of buy & sell to 625 customers in this manner. Half the people were told to buy stocks A, B, C, D, E and remaining half were given the call to sell these stock. Intraday gain mentioned were 2–4%. Obviously, one half of these people made money. End of the day 312 people made money.

    Next Wednesday - He sent his intraday calls of buy & sell to 312customers in this manner. Half the people were told to buy stocks F, G, H, I and remaining half were given the call to sell these stock. Intraday gain mentioned were 2–4%. Obviously, one half of these people made money. Those who lost money on previous trading calls, ignored his advice. End of the day 156 people made money.

    Next Friday -He sent his intraday calls of buy & sell to 156 customers in this manner. Half the people were told to buy stocks F, G, H, I and remaining half were given the call to sell these stock. Intraday gain mentioned were 2–4%. Obviously, one half of these people made money. Those who lost money on previous trading calls, ignored his advice. End of the day 78 people made money.

    He continued with this method acquiring stealthily fresh data base of thousands of new customers for a fresh cycle. He has been playing in this manner for over a decade.

    Tecnology helps SMART people.
     
  10. Thyagarajan

    Thyagarajan IL Hall of Fame

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    Last edited by a moderator: Feb 19, 2019

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