The Next Big Crash - Are You Prepared?

[valuebuddies]

No one is perfect in this world including Warren Buffet, so sharing of knowledge is just something give-and-take which should benefit the writer and reader. If you know someone who is perfect, some unit trust which managed by he/she that will outperform the market every year, then all of us would just need to buy that unit trust, no need to visit VB to collect tips..

[felixleong]

to learn is a student
to share is a master

[cif5000]

to learn is a student
to share is a master

Not every student want to learn how to fish.
Some students are more interested in getting the fish from the master.
And when the master wants to teach them how to fish, they say the master is not sharing.

[CityFarmer]

There is always synergy after an intellectual exchange of ideas and views, i.e. the theory of 1+1 > 2.

"抛砖引玉" Translation: throw in a brick in order to attract a jade. It means initial idea/view might not be good (a brick), but after exchanges of idea/view, might be able to produce superior result (a jade)

[felixleong]

Ya lor, those who wait for fish will eventually eat a poison fish. A true fishermen will always know how to tell a good fish against a bad fish. Evil fishermen will sell a bad fish as good fish. Look at all those lazy and greedy ones that got burn on china stocks....

[Temperament]

Ha!Ha!
HAH?
Afraid to share your acquired knowledge and experiences???

Don't WB share about his "investment philosophy" every year without fail? So are the many GURUS ways of making money in the market. G. Soro, Templeton, Seth Klarman are no secrets to anyone who want to know how they made their money. Just go to NLB or Google.

Besides:-

TITLE - MARKET WIZARDS

THE EFFICIENT MARKET HYPOTHESIS:
{Can be summarized as follows:
1) Prices of traded assets already reflect all known information.
2) Assets prices instantly change to reflect new information.
3) Therefore,
a) Market prices are perfect.
b) It is impossible to consistently outperform the market by using any information that the market already knows
The efficient market hypothesis comes in three basic flavours.
1) Weak efficiency. This form of the efficient market hypothesis states that the past market price data cannot be used to beat the market.
Translation: Technical analysis is a waste of time.
2) Semi-strong efficiency (presumably named by a politician). This form of the efficient market hypothesis contends that you can’t beat the market using any public available information.
Translation: Fundamental analysis is also a waste of time.
3) Strong efficiency. This form of efficient market hypothesis argues that even private information can’t be used to beat the market.
Translation: The enforcement of insider trading rules is a waste of time.


Corollary: The reader of this book are delusional.
Actually we are all delusional at times in the market (comment by temperament)
////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////
//////////////////////////////////////////////////////////
The flaws of the market hypothesis are both serious and numerous.
1) If true, the impossible has happened—and many times. To cite only one example, on October 19, 1987, S & P futures fell by an astounding 29 percent! If the efficient market hypothesis were correct, the probability of such an event occurring would be 10 to the power of -160----a probability that is so impossibly remote that it is roughly equivalent to the odds of randomly picking a specific atom in the universe and then randomly picking the same atom in a second trail. (This calculation is based on the the estimate of 10 to the power 80 atoms in the universe. Source: www.wolframalpha.com.)
2) Some market participants (including some in this book) have achieved track records that would be a statistical impossibility if the efficient market hypothesis were true.
3) The assumed mechanism for the prices adjusting to correct levels is based on a flawed premise, since the price impact of informed traders can be outweighed temporarily by the actions of the less knowledgeable traders or by the activity of hedgers and governments, which are motivated by factors other than profit.
4) Market prices completely out of line with any plausible valuations are a common occurrence.
5) Prices moves often occur well after the fundamental news is well known.
6) Everyone has the same information does not imply that everyone will use the information with equal efficiency.
7) The efficient market hypothesis fails to incorporate the impact of human emotion on prices, thereby leaving out a key market price influence that throughout has at times (e.g. , market bubbles and crashes) dominated the influence of fundamental factors.
The bad news is: The efficient market hypothesis would preclude the possibility of beating the market other than by chance. The good news is: The efficient market hypothesis appears to be deeply flawed on both theoretical and empirical grounds. So to answer the question at the start of this section, yes, the markets can be beat, although doing so is very difficult. }

Quote:
Ha! Ha!
The market can be beat. Choose your favorites' of the above “7 poisons”
Mine is NO. 7.
So far have you beat the market?
My answer is Over-all a NO.
I should have ETF or Index then.
But DIY gives you an illusion that you are in control like a “magician”.
Fun to be a magician isn’t it?
As long as you don’t lose money in the long run, it should be O. K.
Ha! Ha!
ENJOY YOUR POISONS THEN!

[sgd]

Ya lor, those who wait for fish will eventually eat a poison fish. A true fishermen will always know how to tell a good fish against a bad fish. Evil fishermen will sell a bad fish as good fish. Look at all those lazy and greedy ones that got burn on china stocks....

there was a time in the old wallstraits forum predessor to vb "value investors" were buying china stocks in droves giving sound fundamentals.

those got burnt lazy greedy really? or just plain unlucky and bad timing.

[sgd]

warren buy stocks at discount and sell out to market exuberance.

if everybody is like warren buffet, everybody will buy buy only good stocks and will be waiting to buy at a discount, those who have it will be waiting to sell to market exuberance.

try imagine what the market going to be like, more and more people read vb.

well done vb.

[Temperament]

warren buy stocks at discount and sell out to market exuberance.

if everybody is like warren buffet, everybody will buy buy only good stocks and will be waiting to buy at a discount, those who have it will be waiting to sell to market exuberance.

try imagine what the market going to be like, more and more people read vb.

well done vb.

People can read VBs as much as they want BUT?????

(May i borrow one of the posting i had in CW8888's blog sometime ago.
There is no holy grail in investing. Everyone has to find his own niche in the market.)

Anonymous19 December 2011 17:08:00 GMT+08:00

CW8888,

Do you realize that you have a talent in stock investment? From your posting, your TSR is growing.

RayNg
Reply
Createwealth888819 December 2011 17:15:00 GMT+08:00

Hi Ray,

I am not too sure that I have talent in stock picking. Just tikam tikam. LOL!
Reply
Temperament19 December 2011 22:59:00 GMT+08:00

Hi CW,
You may have all the seven traits listed below, Ya? i certainly hope i have at least some of them. God Bless Us All. Amen.

Extract from a book:-

{Reading this won’t make you great.


The seven traits are:
1. The ability to buy stocks while others are panicking, and the ability to sell at a time when other investors are euphoric.

2. The great investor has to be obsessive about playing the game and wanting to win.
3. The willingness to learn from past mistakes.
4. The fourth trait is an inherent sense of risks based on common sense.

“Most people know the story of long Term capital Management, where a team of 60 or 70 PhDs (inclusive of a few Nobel prize winners) with sophisticated risks models failed to realized what, in retrospect, seemed so obvious: they were dramatically overleveraged. They never stepped and said to themselves, ‘Hey, even the computer says this is OK, does it really make sense in real life.
“The ability to do this is not as prevalent in human beings as you might think. I believe the greatest risk control is common sense, but people fall into the habit of sleeping well at night because the computer says they should. They ignore common sense, a mistake I see repeated over and over in the investment world.”

5. Great investors have confidence in their own convictions and stick with them, even when facing criticism.

6. It is important to have both sides of your brain working, not just the left sides. – The side that is good at math and organization.

In business school, I met a lot of people who were incredibly smart. But those who were majoring in finance couldn’t write worth a damn and had a hard time coming up with inventive ways to look at a problems,” said Mr. Sellers.
“I was a little shocked at this. I later learned that some really smart people have only one side of their brain working, and that is enough to do very well in the world but not enough to be an entrepreneurial investor who thinks differently from the masses.”
“On the other hand, if the right side of your brain is dominant, you probably loathe math and therefore you don’t often find these people in the world of finance to begin with.”
So finance people tend to be very left-brain oriented – and Mr. Sellers said that that is a problem. A great investor needs to have both sides turn on. He said. “As an investor, you need to perform calculations and have a logical investment thesis. This is your left brain working. But you also need to be able to do things such as judging a management team from subtle cues they give off.
You need to be able to step back and take a big picture view of certain situations rather than analyzing them to death. You need to have a sense of humour and humility and a common sense. And most important, I believe you need to be a good writer.”
He cited Warren Buffett as one of the best writers in the business world. “It’s not a coincidence that he is also one of the best investor of all time.
If you can’t write clearly, it is my opinion that you don’t think very clearly,” Mr. Sellers said.

7. And finally the most important, and rarest, trait of all: the ability to live through volatility without changing your investment thought process.
(i{mine} believe you can perform No. 1 only if you have No. 7.)

i rested my sharing.

[Art or Science]

Thought its a rather good read from fool.sg website. Happy reading.

Good to share and discuss, I feel. But it really depends on one's skills, knowledge and experience in analysing and interpreting what was shared, IMO.