The Ambitious Trader: Stocks, Trading, Investing..My Ambitions as a Trader and Investor

This is a one way ticket that takes you on a wonderful journey into the vast world that is the stock market through my eyes, my point of view.

Wednesday, March 26, 2008

Not So Bad After All?? Time To Bargain Hunt??

That is exactly what the institutions and the corrupt financial media want you to be believe. They want you to think that the credit crisis was simply just an exaggerated crisis and that it is time to go bargain hunting in stocks. This type of advice always leads to disaster. Unfortunately, the majority of people who invest in the stock market actually follow this un-sage-like advice. It is no wonder that the majority of the investing public doesn't even come close to beating the market. Instead of deciding on their own, they take the advice of institutions which have an entirely different agenda, both in the general markets and in individual stocks. Institutions need individual suckers (investors) to buy stocks in order for them to have an open market for them to sell their shares into. That is how the big banks and institutions bail out of their holdings. This can turn rather nasty in downtrends. The promotion of bargain hunting is what helps banks unload their shares to the unsuspecting public. I'm not trying to discourage new (and potential investors and traders). I'm simply trying to open your eyes to the harsh realities of investing and trading. Trading and investing is without a doubt, a cut-throat business where only the do-it-yourself investors and traders succeed.

6 Comments:

At 12:59 PM , Blogger Chad said...

I agree with you to a large extent there. In order for the few to seize profit opportunities, there need to be the "many" that provide the liquidity (which is a nice way of saying that novices provide all the money for the experienced's gain. ...or they get the sucker end of the deal.) If this didn't happen, the market would truly be zero sum.

I don't think all of the media reporters and comentators are out to get the little man, but I do think most of them are silly-influenced and "late-to-the-party" when it comes time to scoop up the bargain. In short: If you heard it on CNBC, it's probably too late!

I think the most important lesson ever is damage control. If you minimize losses (no matter what!) and realized that you got the shaft end of the deal, then you grow and learn. Not everyone learned to swim without choking on a little water.

But still... things are unpredictable at best. People should wear their knee-pads!

Good post. I feel your passion.

-Chad.

 
At 2:41 PM , Blogger Nick M. said...

Thanks, Chad.
I also totally agree with you on the damage control aspect of managing ones portfolio. Cutting losses is the best way to live to fight another day.

 
At 8:23 PM , Blogger Yre said...

Cramer contrarian approach can make mint some moolah.. speaking of which do you think it is time to short HLF.. which cramer was pounding on his table.

 
At 10:13 PM , Blogger Nick M. said...

Yre,

Anything that Cramer recommends will almost always be a good short. But still, shorting should be done at the right time. Despite the Cramer pump, HLF is still not a good short as the stock is showing some strength. Watch for a nasty reversal that closes near the LOD on high volume. You will want to see the close also below the 10 and possibly 20 day MA. That would be a strong short signal. For now, just watch it.

 
At 12:44 AM , Blogger Rocko Chen said...

Well, I think at this point most of the public's still too busy selling out of fear.

Well it's sort of that way in NZ at least.

I agree with you on the institutional part. When they look to sell, the liquidity comes from the uninformed public investors.

 
At 10:01 AM , Blogger Nick M. said...

Rocko,

Although I am not familiar with the NZ market, in the U.S. individual investors still feel bold and brazen about the stock market. That is why the VIX is still rather low. U.S. investors are still too bullish. Before I can become bullish again, I would like to see some more fear, panic selling and a new low on all the major U.S market indices.

 

Post a Comment

Subscribe to Post Comments [Atom]

<< Home

Enter your Email


Preview | Powered by FeedBlitz