A WORD FOR THE FUTURE STOCK TRADERS

A FEW QUOTES TAKEN FROM A FRIEND

STOCKHACKER
Publish date: Mon, 23 Feb 2015, 10:00 PM
A personal opinion in stock trading
In order to understand their financial language, analyse their language. The words to choose with major shareholders and CEOs, sometimes convey much more than we ever intend them to.

Recently I asked "one friend "about the state of " one" company. And a few quotes taken from it, is this;

** " Instead of being a people pleaser, we focus on the things we can do well. Make the right decision."

** " Our priority is to manage the company and the line of work. We always have more game changers in the pipeline. However, we are not interested to " manage " the share price. We have no intention to trade our shares, why pump it?"
( Candidly, I hate this line most.)

** " Slightly lower stock price compared to market analyst expectations is not our concern. Eventually the value will self correct itself naturally. Recently we no longer talk to each and every analyst in town, 2 major IB's coverages is sufficient at the moment. As of now, from what I know, almost all the shareholders are happy with our progress........Except maybe you!! " ( OMG, yes of course I wish for more upside!!.)

**Any drastic price changes in a short time frame because of the heavy influence from multiple financial analyst coverage and the mainstream media sources, you can opt to................follow the law of gravity, trade the shares."        
( Again , I miss something here,?? )

The End.

1.What the majority is expecting? 

If we don't have the fastest information in the market, then you have to study the herd behaviour. You have to know the herd. What are they thinking and feeling, and how are they likely to react to the next news release and major events? If you know what the investing herd believe, fears and expects, then you know how it is likely to react to new information. 


2. Assumptions are decision under risk.

Wise decision making supposes to do choices that are consistent with both reality and logic. What most if our advisors say so? In some of those steps, we might require the help of professional experts. It's ok and more ok in highly technical fields, to get right and full info, but only we avoid to be overly depending on them. Thus lose our own freedom of investigation and decision circumstances, assumptions, fears will override the logic decision making. 

3. You expect a free lunch, but be careful about your stomach. 

A sudden drastic price change isn't intrinsically good or bad for everyone. Higher prices are good for sellers, including future sellers and bad for buyers and the future buyers. Considerably, some major markets are now hitting new highs. To rely on the this situation, check when your assets are still fit the situation. Any internal and external shocks, makes them absolute without warning.

4. Getting relevant information faster, a key to successful trading

The good news is good, but for how many days? If the ball tossing magic trick at the opening of the news article, a consistent pattern of tossing the ball into the air and catching it was first established. Once the pattern was understood by viewers and expectations set, only then could the illusion work.

Something similar occurs with stocks. Good news does lead to positive price movement for 1-2 days. But after that, prices tend to reverse. Good news makes the price rise, bad news and the price falls. The relationship is straightforward and there's no magic to it. However, investors learn this pattern and several days later, as they continue to pile in, and feel good about themselves, the price unexpectedly rolls over."

5. High level of emotion blind investors to rational considerations.

The decision making and problem solving process are frequently filled with complication,  pitfalls and traps. Good strategy assessment begins with good strategic intelligence gathering, through various means. You already know that some aspects of the economy are driven by fabrication and temporary reality. 

Speculation is a combination of upwards projection of an asset price and positive emotion. Rational analysis, focus on business fundamentals. While in the short term all looks happy and positive, investors become attached to this feeling and relax their critical thinking. Miss the sleight of hand as prices turn around and will caught all by surprise.

The good news is we aren't doomed to forever falling into the same perceptual traps. We can improve in detecting perceptual foolery with practice. 

Hey.......let's be careful out there. 


Like always, happy investing 
 

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AyamTua

anyone who pass this test. not just tidak mampus faster, but gain so much more towarda their pinacle of investing life

"The decision making and problem solving process are frequently filled with complication, pitfalls and traps. Good strategy assessment begins with good strategic intelligence gathering, through various means. You already know that some aspects of the economy are driven by fabrication and temporary reality.
"

2015-02-23 22:44

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