What is investment?
Trading, is about buying cheap or selling expensive or the other way round. Shorting is abut first selling expensive and then buying (back) cheap. Investment is about buying at the right price and selling to the right price. But what is the right price?
“An investment operation is one which, upon thorough analysis promises safety of principal
and an adequate return. Operations not meeting these requirements are speculative.”
Thorough analysis is the key word. If you have not done your home work, the analysis is not thorough, it is speculation. Trading may be speculation, but trading by professionals are based on thorough analysis. But the difference between an investor and a trader, is
- The trader is interested in volatility or price swings.
- The (value) investor is interested in identifying undervalued papers.
- The investor is interested in long time real appreciation of his invested capital.
Demolition may be depreciation, but sometimes you have to demolish to rebuild. In the theory of nonlinear partial differential equations, an irreversible solution is a solution that can not be inverted. If you blow up an art museum with paintings of Vincent van Gogh you cannot recreate the paintings. If you buy (good) paintings of Vincent van Gogh and Pablo Picasso, it seems to be investment at nearly every moment of time. They have a tendency to appreciate in value over time.
Dynamic allocation, decide on wave degree and invest with the preferred wave count
in direct or inverse indexfunds. Trade with the preferred wave count.
It has always been said that the easy way to beat the market is dollar cost averaging. Over a long
enough horizon this is right, since the main trend is up. Rebalancing the protfolio is another possibility, but in a
secular bear market, you can rebalance the portfolio down. Benjamin Graham, the famous "Dean of Wall Street"
said that you could beat the market by putting it on autopilot and rebalance the portfolio between 75 % in bonds when
the market was overvalued and 25 % in stocks. A 50 / 50 % distribution in between and 75 % stocks and 25 % bonds when
the market was undervalued. He proposed using index funds since they were cheapest. Some index funds like funds following
the Dow Jones Industrial average are often very inflated in cyclical bull markets, so it may perhaps be best to use other
indexfunds. You may use Dr. Ed Yardeni's measure of the market
sentiment as an yardstick to value the overall market.
In a secular bear market, containing many cyclical bull markets, there is an alternative to the above procedure. The message in the heading explains it. This allocation principle may of course be modified to allocate X% in indexfunds according to the preferred wave count, Y% to the alternative count and Z% to the third count.
To understand the message, you must understand the Elliott Wave principle or the Elliott Wave fractal as it is also called. You find relevant literature in the Elliott Wave Bookstore or by clicking banners to Elliott Wave International on the education sub page. Elliott Wave International also deliver a market news service on the following pages
Visit their new site, elliottwave.net. Read their message there about the next big move in the stock market.
If you are young and have a horizon of 30 years or more, you may combine the two procedures, 50 % to dollar cost averaging and 50% to dynamic allocation.
In his facianting new book, "The wisdom of crowds", James Surowiecki explores a deceptively simple idea: large groups of people are smarter than an elite few, no matter how brilliant—better at solving problems, fostering innovation, coming to wise decisions, even predicting the future. His message is very different from the message of Charles MacKay.
"No one in this world, so far as I know, has ever lost money by underestimating the intelligence of the
great masses of the plain people."
-H. L. Mencken
Valuable information on trading, investing, derivatives, commodities and consulting. Investionary is a general financial directory with a Commodity Trading - sub directory.
StockPoint Trading System - Incredibly Accurate Real-Time Buy and Sell signals!
Peter Lynch calls Value Line "the next best thing to having your own private securities Analyst." It has outperformed the DOW by 17 to 1 over a 39-year span that covers both bull and bear markets. We've delivered 17,949% gains for those who invested in our portfolio of #1-ranked stocks. To try this legendary stock-picking system for the next 13 weeks, Click Here
Warren Buffet calls Value Line, “An incredible value! I don’t know of another system that’s as good.” Outperforming the DOW by 17 to 1 for over 39 years -- we've delivered 17,949% gains for investors in our portfolio of #1-ranked stocks. Click Here to try this legendary stock-picking system for 13 weeks!
Stock Market Reports - Daily stock market sentiment reports for the NASDAQ, S&P 500, and DJIA. Designed to enable traders to discover the relationships between current investor sentiment and prevailing market trends.
Penny stock trading | investment strategies for penny stocks 1source4stocks.com provides penny stock traders with online trading and investment tips, online trading strategies and penny stock picks.
This site is a combination of a digital ad magazine and finance and IT information in the form of hyperlinks, collected over more than 10 years. If you find the site valuable, indirectly sponsor it by linking to the pages from your own pages.
Page content still plays a part in the rankings of search engines, but the biggest single ranking factor of all is link text. Links to a page, with targeted link text, can push the page to the top of the rankings. Digital advertising and promotion. List Your Site with Overture and appear on the top of search results of leading sites like MSN, Yahoo!, and Alta Vista. Reciprocal linking is another way to increase traffic to your site. Add URL Link-Pimp Human-edited, free categorized link directory. Add your website today. You find a lot more information on the marketing, logistics and site sub pages. You may use the "Site Navigation" field to go directly to a page.
The site where financial information and information technology converge. The site for digital communication and information.
Stay a step ahead in business, career investments. Subscribe to The Wall Journal Europe and save 50% off the cover price
What is production? Is it production if you cut your finger in a mincing machine? What is economies of scale? Would it not be economies of scale if you had your company in the hip pocket? Would it not be economies of scale if your company's infra structure was stored on a laptop?