Hedge Fund Managers
03 February 2011, 08:41 PM
#31
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03 February 2011, 08:45 PM
#32
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That is true but otoh the government bail-out of the banks indirectly bailed them out also....the whole mountain of paper would have collapsed totally without the intervention.
03 February 2011, 08:49 PM
#33
In the US it used to be against SEC rules to short sell on a down-tick - ie. if the last movement in the stock price had been down (it was slightly more complicated than that, but that's the basic idea). The rule was abolished in July 2007 - how's that for timing!
The rationale behind the rule was to stop someone who had built up a large short position in a stock manipulating prices by repeatedly selling smaller blocks of stock at lower prices. The theory is that in this situation both buyers and sellers have an aligned interest in minimizing the price of the trade, disrupting the proper "price discovery" function of the market (not to mention disadvantaging other holders of the stock who are not party to the trade - ironically including the owners of the stock lent to the short sellers).
The SEC continues to discuss reintroducing the rule (or a modified version) but so far has not acted. Senior SEC figures and Ben Bernanke favour reinstatement but presumably some heavy behind the scenes lobbying is getting in the way.
I don't know whether UK stock markets have (or had) such a rule.
The rationale behind the rule was to stop someone who had built up a large short position in a stock manipulating prices by repeatedly selling smaller blocks of stock at lower prices. The theory is that in this situation both buyers and sellers have an aligned interest in minimizing the price of the trade, disrupting the proper "price discovery" function of the market (not to mention disadvantaging other holders of the stock who are not party to the trade - ironically including the owners of the stock lent to the short sellers).
The SEC continues to discuss reintroducing the rule (or a modified version) but so far has not acted. Senior SEC figures and Ben Bernanke favour reinstatement but presumably some heavy behind the scenes lobbying is getting in the way.
I don't know whether UK stock markets have (or had) such a rule.
03 February 2011, 08:56 PM
#34
By this logic didn't the government bail us all out (otherwise our bank accounts would have been empty). I don't know about you but I don't feel at all culpable for the financial crisis (I design telecomms equipment which we sell very profitably to the yanks - not a financial product in sight, although we do buy a lot of currency options and futures).
03 February 2011, 09:40 PM
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The best informs wins is a mile away from insider trading. Better informed could be market analysis, sector knowledge, a whole bunch of things.
Quite simply it could be a professional trader vs. an amateur (like me) who does not have a whole troop of analysis behind me!
03 February 2011, 09:50 PM
#36
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It is interesting that the starting point is always some aspect of iniquity.
The best informs wins is a mile away from insider trading. Better informed could be market analysis, sector knowledge, a whole bunch of things.
Quite simply it could be a professional trader vs. an amateur (like me) who does not have a whole troop of analysis behind me!
The best informs wins is a mile away from insider trading. Better informed could be market analysis, sector knowledge, a whole bunch of things.
Quite simply it could be a professional trader vs. an amateur (like me) who does not have a whole troop of analysis behind me!
03 February 2011, 10:40 PM
#39
Get it wrong and you're all over the headlines:
http://www.telegraph.co.uk/finance/n...es-shares.html
http://www.telegraph.co.uk/finance/n...es-shares.html
03 February 2011, 11:03 PM
#40
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So I guess the edge comes with talent, and at the moment that talent goes where the money is - i.e. the large institutions/banks. And the more talent they have, the more of an edge they will have. In the case of the high frequency trading above, it's a rat race that involves finding increasingly clever maths students/computer programmers to design these systems in order to outdo each other.
Last edited by GlesgaKiss; 03 February 2011 at 11:06 PM.
04 February 2011, 12:53 AM
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There is no such thing as a lucky investor, there well may be a punter who gets lucky but this lasts at best for a month. A strict trading strategy based on principles you have discovered to be reliable are paramount! I, for example, am a technical trader I trade intraday and upto a week in duration however my intraday strategies are different to my swing trades ( weekly duration ) and on times what I may be long in a swing trade I may be short in a day trade. There can be no emotion in professionally playing the markets and through interviews with investors it becomes clear that the emotional element of trading is where most people fail themselves! All I know is I can make money long a stock that is perceived as " bad" and I can lose money long a "good" stock.
Analysts are the biggest crooks of the investment world IMO
Analysts are the biggest crooks of the investment world IMO
04 February 2011, 02:34 AM
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By this logic didn't the government bail us all out (otherwise our bank accounts would have been empty). I don't know about you but I don't feel at all culpable for the financial crisis (I design telecomms equipment which we sell very profitably to the yanks - not a financial product in sight, although we do buy a lot of currency options and futures).
04 February 2011, 02:41 AM
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Lots of professional traders lose their shirts too!
What place for the amateur? Just riding the waves up and kidding ourselves it's 'skill'? Be prepared to ride them down also!
But people do make money having said that!
If I get back into the markets I'll just be a conservative investor probably, No way I'm smart enough to pull of leveraged trades or day trading etc, plus my money is very real to me 'cos I earned it working....I know that is a mistake though; it means I don't understand it.
04 February 2011, 07:24 AM
#46
I agree with that somewhat.
Lots of professional traders lose their shirts too!
What place for the amateur? Just riding the waves up and kidding ourselves it's 'skill'? Be prepared to ride them down also!
But people do make money having said that!
If I get back into the markets I'll just be a conservative investor probably, No way I'm smart enough to pull of leveraged trades or day trading etc, plus my omoney is very real to me 'cos I earned it working....I know that is a mistake though; it means I don't understand it.
Lots of professional traders lose their shirts too!
What place for the amateur? Just riding the waves up and kidding ourselves it's 'skill'? Be prepared to ride them down also!
But people do make money having said that!
If I get back into the markets I'll just be a conservative investor probably, No way I'm smart enough to pull of leveraged trades or day trading etc, plus my omoney is very real to me 'cos I earned it working....I know that is a mistake though; it means I don't understand it.
04 February 2011, 08:02 AM
#47
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There is no such thing as a lucky investor, there well may be a punter who gets lucky but this lasts at best for a month. A strict trading strategy based on principles you have discovered to be reliable are paramount! I, for example, am a technical trader I trade intraday and upto a week in duration however my intraday strategies are different to my swing trades ( weekly duration ) and on times what I may be long in a swing trade I may be short in a day trade. There can be no emotion in professionally playing the markets and through interviews with investors it becomes clear that the emotional element of trading is where most people fail themselves! All I know is I can make money long a stock that is perceived as " bad" and I can lose money long a "good" stock.
Analysts are the biggest crooks of the investment world IMO
Analysts are the biggest crooks of the investment world IMO
04 February 2011, 08:07 AM
#48
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I remember just before HBoS collapsed, Lehman put out an analysts note with a BUY, saying that it would recover from a short term correction.
Mike Ashley went long, lost nearly £200m and then went long again as it now had a bigger upside. Rumour was he lost £550m in total as he chased the price down (emotion) rather then get out!
Mike Ashley went long, lost nearly £200m and then went long again as it now had a bigger upside. Rumour was he lost £550m in total as he chased the price down (emotion) rather then get out!
04 February 2011, 09:03 AM
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Exactly. Yet if they get it right once or twice everybody listens to them. I wonder whether the broker notes they put out are the complete opposite of what they would do in most cases. They'll have large clients who want to get rid of stock at the highest price, so they'll rate it a buy to peddle it to the public. Or perhaps I'm being too cynical?
Analysts are always behind the initial move, they always lag price action. In the same tone they can rate something as a Buy today with a euphoric price target then at anytime down the line change their mind. The public is fickle and has short memory so we don't remember when they get it wrong, just the few occasions when they may get it right! All the information you need to trade the market is right there in the chart infront of you
04 February 2011, 09:22 AM
#50
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alloy - does what your do have anything to do with unit trust funds?
Only ask because I work in an IFA practice, although I'm not an adviser, and its become more and more important to have a grasp of how markets/sectors behave. IFAs seem to have become lower paid fund managers who are expected to always get the market right.
Last 18 months its been hard not to make money when looking at client portfolios but the last 3 months and looking towards the rest of the year its much harder to see what is going to perform well.
Only ask because I work in an IFA practice, although I'm not an adviser, and its become more and more important to have a grasp of how markets/sectors behave. IFAs seem to have become lower paid fund managers who are expected to always get the market right.
Last 18 months its been hard not to make money when looking at client portfolios but the last 3 months and looking towards the rest of the year its much harder to see what is going to perform well.
04 February 2011, 10:07 AM
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04 February 2011, 05:59 PM
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No I think you don't understand.
The collectivization of risk may have saved the system but it did not directly stop any wealth destruction, in fact quite the opposite as it transferred wealth from the bottom up.
The collectivization of risk may have saved the system but it did not directly stop any wealth destruction, in fact quite the opposite as it transferred wealth from the bottom up.
04 February 2011, 06:09 PM
#55
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I commented on this in an earlier thread -- the last 3 years have seen the biggest transfer of wealth from the poor to the rich in history
04 February 2011, 09:21 PM
#57
(^^quoted from the other banking thread!)
Last edited by jonc; 05 February 2011 at 12:58 AM.
04 February 2011, 10:59 PM
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I thought the point of private mail was that - it's private!
So why announce it publicly!
Anyway - as a total aside the cost of three to four year money has risen 1.5% in the last two weeks alone!
So why announce it publicly!
Anyway - as a total aside the cost of three to four year money has risen 1.5% in the last two weeks alone!
04 February 2011, 11:10 PM
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Analysts puff smoke to create liquidty, all the big investment banks do what you suggest Alan putting notes out so they can dump stock on the retail punter who follows their research. This is more evident in the mid and small cap stocks but does happen in the larger constituents as well.
Analysts are always behind the initial move, they always lag price action. In the same tone they can rate something as a Buy today with a euphoric price target then at anytime down the line change their mind. The public is fickle and has short memory so we don't remember when they get it wrong, just the few occasions when they may get it right! All the information you need to trade the market is right there in the chart infront of you
Analysts are always behind the initial move, they always lag price action. In the same tone they can rate something as a Buy today with a euphoric price target then at anytime down the line change their mind. The public is fickle and has short memory so we don't remember when they get it wrong, just the few occasions when they may get it right! All the information you need to trade the market is right there in the chart infront of you
07 February 2011, 08:24 AM
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The problem is the "analysis" produced by investment firms is all highly subjective. It no longer is a balanced view of the company achievements and prospects it rarely includes financial details any more, it is sales material produced by the firms to entice people to trade so they can generate a revenue stream off of their commissions. There are perhaps two analysts i would read content from otherwise i feel i am being led down the garden path.