Dear qqq3, I love your name. U n many i3 members can be master of these 3X NASDAQ index derivatives;
TQQQ 3X bull on Nasdaq index SQQQ 3X bear
No expiry date n no margin call n best is no tedious stock selection skill is required. Purely directional play to long or to short. v good fun if u r at RIGHT timing. Mkt is 50/50 n to be right u just need to know the odd to the xtra 1% more on the right side n u win BIG.
Failure or success depends on your ability to make forecast of trading range and time frame , forecast of events and results , forecast of risk factors and your ability to assume certain risks and proven right later.....That is the sweetest of success...It ain't got nothing to do with intrinsic values or with holding power.
While I agree intrinsic value is a vague word, and sometimes carry different meanings to different investors due to misconception, but nonetheless it is a measurement - to know what a business should worth for a willing buyer and willing seller. And how that is measured is by estimating the future cash flow that can be generated by the business.
Whether you are talking about intrinsic value or trading, everything is obviously in the eye of the beholder. But a good investor doesn't determine IV from his own point of view, he synthesize by incorporating all supportive and contradictory information to derive a valuation that he hope is closest to the objective truth. In other words, seeing things from multiple lenses. Share price of course gyrate more than IV, but that doesn't invalidate the use of IV. It is precisely the gyration of the market that a long-term investor should know the value of a business without being swept away by nonsense.
Using NTA/NAV, first, is just an anchor to where IV could possibly be, it is a start not the end, second, it is a heuristic some investors may rely too much upon and create misconception (think PE), it has nothing to do with the reliability of IV itself. Correlation doesn't mean causation.
IV has relevance to all caps and all kind of cash flow generating assets outside the realm of stock market. Property, there is IV; Mona Lisa painting, there isn't. P&L that has no stability doesn't mean there isn't any IV, it just means the IV range will be huge since there are many possible outcomes.
And I don't disagree with you, that IV itself requires a time frame to judge the accuracy of one's forecast as well. But instead of using market price which is unreliable, one should make forecast based on business key drivers.
No one should 100% trust their IV, it is not something that you set in stone, but rather constantly require adjustment as more information comes in. Think in term of degree of confidence.
Holding power is a measurement of risk. Everyone exact definition might differ, some refer it to the psychological aspect of holding it under stress. But to me, it means not being forced to sell under adverse condition. Investor can be forced to sell under condition such as margin lending, lifestyle obligation etc. Those are risks. Risk begins way before you buy a stock.
and yes holding power...is not about money in the account only.....primarily it is about the psychological aspect of holding it under stress. ......so much emphasis on holding power only mislead people to think if only they can withstand some pain, they will make it.......wrong way to go about doing things.
Well I can't talk for them. They have their own way of doing things, no right or wrong, but investors learning 2nd level thinking is the only way to go.
This is the misconception of IV. IV is not a precise number. While many does put it in the form of exact dollar and cents, it should be a range. Why should it be a range? Because we are forecasting, we are dealing with uncertain future; we are dealing with luck and so on. The bigger the range of possible outcome of a company, in this case, young company or startup, the bigger the range of IV should be. That doesn't mean IV is useless. It is just reality.
If you ask me to guess the age of a stranger and to me, he looks like in his 40s, I can say im fairly certain (90%) he is within 40-49 years old. I cannot be precisely because I can be wrong, but that doesn't make my estimation invalid.
Similarly, if you ask me to guess the age of a giraffe, I would be fairly certain (90%) the giraffe is between 1-100 years old. I need that big range to be 90% certain because I know nothing about giraffe. IF I were to guess the giraffe to be 10-20 years old, my confidence will be below 10%, because I'll be wrong most of the time.
Same thing with stocks. The more stable the company is, based on the nature of business, industry dynamic, operation etc; the more you know about the company, the range of IV will be small. In contrast, a stock you are not familiar with, that is young will no track record, operating in a competitive industry, will need a very wide range of IV to accommodate the uncertainty of its nature. That's just how it should be.
IV shouldn't be used as an tool to fool ourselves by being ignorant, it is a tool that says "I know I can be wrong, that's why there it is a range, and that's my confidence interval'
This is true. Just look at kc chong method of determining intrinsic value. He is just another cp teh. Using historical numbers, extrapolate and poof comes the kc chong intrinsic value. I am really awed by the naivety of his analysis. Of course he will post a table of his successful stock pics from 2013. But remember, a rising tide lifts all boats. The last two years he had not made any successful calls. The most recent pick was favco which did not go anywhere.
You are right, the ability to withstand pain is only half true, first the investor has to get his assessment of the stock correct. Same as stop loss for traders. If your strategy is unsound, no amount of stop loss will save you because you'll just keep getting yourself into unwise decisions. But when everything is done right, holding power matters a lot.
as long as people so obsessed with intrinsic value and holding power......there can be no meaningful discussion of the true nature of the stock market which is volatility , uncertainties and what to do with these.
intrinsic value my foot...it is just some imaginary numbers.
Failure or success depends on your ability to make forecast of trading range and time frame , forecast of events and results , forecast of risk factors and your ability to assume certain risks and proven right later.....That is the sweetest of success...It ain't got nothing to do with intrinsic values or with holding power.
d by Ricky Yeo > Mar 25, 2018 09:34 AM | Report Abuse
So the advice is time the market, good luck ========================================================
yes and no.
yes timing is very important for 90% of the retailers.....and no, if you are a substantial shareholder or an institution willing to hold for at least 3 - 5 years to see your predictions come true.
It generally takes at least 3 to 5 years to see results from corporate strategies and corporate changes.
Fundamental to success and failure is still this....
Failure or success depends on your ability to make forecast of trading range and time frame , forecast of events and results , forecast of risk factors and your ability to assume certain risks and proven right later.....That is the sweetest of success...It ain't got nothing to do with intrinsic values or with holding power.
A point to note is tht small investors cannot afford to think like the big fund mgrs who wrote these wonderful bks on fundamental investing, bcause small investors have limited funds n timeframe to make money, unlike the well funded unit trust mgrs, who have money coming in every mth, to invest. If a big storm is coming, like now, better to follow WB first n second rule of investing, n keep high cash allocation, to survive n find values aftr the storm. Those who still see value in their favourite stks, still in bullish market frame of mind from yesteryear, not in 2018.
Its not market timing as such, its plain common sense to run and survive to fight another day, only someone who has not gone thru crash market will act like a hero, values everywhere but price is falling, why ??
A point to note is tht small investors cannot afford to think like the big fund mgrs who wrote these wonderful bks on fundamental investing, bcause small investors have limited funds n timeframe to make money, unlike the well funded unit trust mgrs, who have money coming in every mth, to invest. If a big storm is coming, like now, better to follow WB first n second rule of investing, n keep high cash allocation, to survive n find values aftr the storm. Those who still see value in their favourite stks, still in bullish market frame of mind from yesteryear, not in 2018. ==========================================
I cannot put it better...problem is ikan bilis think they are PNB.....
Ricky Yeo @noplayball I think you are confused by WB's rule. He is risk averse not risk avoidance. 25/03/2018 11:42
hahaha..maybe you are right, we cannot follow WB 100% if we dont have his deep deep pocket like US 100 billion ready cash which is 40% of his stock investment profolio, on standyby.
Better to avoid risk we cant withstand and not lose money, then got chance to win when storm has blown over
always buy when you see value in relative to share price. market timing is an impossible game but not saying you should completely avoid it, you can always strategize by conserving some capital to advantage of the market situation.
I think big funds can and should buy whenever they see the ikan bilis and the foreigners selling. PNB and EPF have been doing it for 30 years ....and doing it successfully....no intrinsic values needed for the exercise.
PNB, EPF and big local funds have institutionalized it so much, it is routine nowadays. Doesn't seem to have harmed them.
Problem is when ikan bilis think they have bottomless pocket like PNB.
Notice I wrote, no intrinsic values needed for the exercise but usually these exercises are strictly restricted to shares they are already familiar with and have substantial stakes.
Ricky Yeo @noplayball I think you are confused by WB's rule. He is risk averse not risk avoidance.
i find it very interesting that WB rule of investing No.1 n No.2 has anything to do with risk aversion versus risk avoidance.
" Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1."
to me it just means even if you need to take a timeout from the market, do it, when the odds are against you and to invest would likely result in losing money in a falling market, like now.
even a pig can fly if it stands at the center of a whirlwind. just follow the trend until it bends. it works everytime for me. ==========================================
works fine in theory but eventually enough mistakes to make it not viable.
Failure or success depends on your ability to make forecast of trading range and time frame , forecast of events and results , forecast of risk factors and your ability to assume certain risks and proven right later.....That is the sweetest of success...It ain't got nothing to do with intrinsic values or with holding power.
on the question of timing......Purebull posted buy when RSI just cross above 56......I think worth trying out.
me.....in most conditions, I fine I make most money when I buy "cheap"...but a strong bear, nothing works......hahahaha
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pussycats
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Posted by pussycats > 2018-03-25 06:47 | Report Abuse
qqq3, then u buy base on WHAT PRINCIPLES???
>>>qqq3 >>>>>You must banish the words intrinsic value and holding power from your dictionary.<<<