save our soul www.falundafa.org
Tuesday, June 7, 2011
Monday, June 6, 2011
Sunday, June 5, 2011
Saturday, June 4, 2011
Friday, June 3, 2011
SOS Real Economy Vs Financial Market
When we talk about an Economy, we must separate it from the Financial Market.
One is talking about the real demand and supply of goods and services, while the financial market is the manifestation of the real economy. A genuine purpose of a financial market like stock market is meant for raising equity and allowing the public to participate the growth of the Real Economy. However, this genuine purpose, as usual, being mixed with greed, turn mostly into another casino.
An example would be, a company is financially distressed, auditors qualified its report under going concern, announced a debt raising proposal, the share price increased 2.5 times, and then drop back near its original price before the announcement. While investors, speculators, day traders, play the shares up, the said company is still financial distressed, waiting for the "proposal" to be materialised. So, the real economy reflect the financial state of the company (financially distress) and the stock market reflect what "people" perception of the stocks, which is far from the "real fundamental" of the company. From this observation, we can say that the stock market is basically a reflection of all the participants perceptions (based on so called fundamental news or insider trading news or other) and act upon those "misguided" information. So, we can safely conclude that the actions by the participants are irrational.
MyView
There are many of such thing happens in the KLSE or other markets, it basically become a casino for many. The real fundamental of the companies is based on the guessing game of the participants or perception. So be very careful when we invest, speculate or gamble, there are simply too many variables that beyond the fundamental analysis. It is called Emotions, which, many have a hard time measuring it.
One is talking about the real demand and supply of goods and services, while the financial market is the manifestation of the real economy. A genuine purpose of a financial market like stock market is meant for raising equity and allowing the public to participate the growth of the Real Economy. However, this genuine purpose, as usual, being mixed with greed, turn mostly into another casino.
An example would be, a company is financially distressed, auditors qualified its report under going concern, announced a debt raising proposal, the share price increased 2.5 times, and then drop back near its original price before the announcement. While investors, speculators, day traders, play the shares up, the said company is still financial distressed, waiting for the "proposal" to be materialised. So, the real economy reflect the financial state of the company (financially distress) and the stock market reflect what "people" perception of the stocks, which is far from the "real fundamental" of the company. From this observation, we can say that the stock market is basically a reflection of all the participants perceptions (based on so called fundamental news or insider trading news or other) and act upon those "misguided" information. So, we can safely conclude that the actions by the participants are irrational.
MyView
There are many of such thing happens in the KLSE or other markets, it basically become a casino for many. The real fundamental of the companies is based on the guessing game of the participants or perception. So be very careful when we invest, speculate or gamble, there are simply too many variables that beyond the fundamental analysis. It is called Emotions, which, many have a hard time measuring it.
Thursday, June 2, 2011
SOS Gambling vs Speculation
DON'T GAMBLE if possible.
Stock market = day trader = speculators = investors = hot money = insider trading = GAMBLING
Commodities Market = day trader = speculator = hedge fund players = hot money = manipulators = GAMBLING
Casino = GAMBLING
Property market = owners = investors = speculators = GAMBLING
Horse race = GAMBLING
Business market = genuine businessman = risk taking businessman = GAMBLING
Derivatives Market = hedging = risk management = GAMBLING
Investment bank = trading = GAMBLING
Currency trading = GAMBLING
Goldman Sachs = innovative CDS, MBS = high frequency trading = GAMBLING
MyView
It is hard to discern between genuine from fake in all aspect of lives. Human race today is more complicated than 100 years ago. More needs, more desires, more attachment, more temptations, more disruptions, more comfort and more of everything. A lot of area in live fall between the thin line of investing /speculation/ manipulation to GAMBLING.
GAMBLING become the second nature of human race. In financial perspective, they call it risk management, hiding behind all sort of legal means.
I suppose one cannot entirely eliminate GAMBLING from our lives but one should not be attach with GAMBLING.
Stock market = day trader = speculators = investors = hot money = insider trading = GAMBLING
Commodities Market = day trader = speculator = hedge fund players = hot money = manipulators = GAMBLING
Casino = GAMBLING
Property market = owners = investors = speculators = GAMBLING
Horse race = GAMBLING
Business market = genuine businessman = risk taking businessman = GAMBLING
Derivatives Market = hedging = risk management = GAMBLING
Investment bank = trading = GAMBLING
Currency trading = GAMBLING
Goldman Sachs = innovative CDS, MBS = high frequency trading = GAMBLING
MyView
It is hard to discern between genuine from fake in all aspect of lives. Human race today is more complicated than 100 years ago. More needs, more desires, more attachment, more temptations, more disruptions, more comfort and more of everything. A lot of area in live fall between the thin line of investing /speculation/ manipulation to GAMBLING.
GAMBLING become the second nature of human race. In financial perspective, they call it risk management, hiding behind all sort of legal means.
I suppose one cannot entirely eliminate GAMBLING from our lives but one should not be attach with GAMBLING.
Wednesday, June 1, 2011
SOS When will be the next Tsunami?
This is a trillion dollar question.
Even James Chanos is early by 2 years for shorting China properties.
Gary Shilling is also early by about 2 years in predicting that USA and commodities will go down again.
Robert Prechter is also early by about 2 years in forecasting that DJIA will collapse.
Charles Nenner is predicting in 2012.
Timing is a very very tricky issue. In economics, it is like a dynamic puzzle, it changes every time. It is emotional. One minute you have MENA, the next you have Tsunami, then you have Missouri flood, now the PIIGS is protesting and China overheating. In order to predict the reaction of investors, traders, speculators in the financial market is not that easy.
MyView
Although it is obvious the we are seeing the cracks, but it can last longer than you can expect. After all, the financial market does not work on rational actions. We know that derivatives are 10 times bigger than the world markets, but no one even dare to quantified its effects or it is damn difficult to calculate its effect. No professors from Harvard or MIT got it right. Look at LTCM. Look at Lehman, even 3 years later, know one would admit it was due to DERIVATIVES. With all this window dressing, covering ups, manipulations, the truth will take longer to review.
Even James Chanos is early by 2 years for shorting China properties.
Gary Shilling is also early by about 2 years in predicting that USA and commodities will go down again.
Robert Prechter is also early by about 2 years in forecasting that DJIA will collapse.
Charles Nenner is predicting in 2012.
Timing is a very very tricky issue. In economics, it is like a dynamic puzzle, it changes every time. It is emotional. One minute you have MENA, the next you have Tsunami, then you have Missouri flood, now the PIIGS is protesting and China overheating. In order to predict the reaction of investors, traders, speculators in the financial market is not that easy.
MyView
Although it is obvious the we are seeing the cracks, but it can last longer than you can expect. After all, the financial market does not work on rational actions. We know that derivatives are 10 times bigger than the world markets, but no one even dare to quantified its effects or it is damn difficult to calculate its effect. No professors from Harvard or MIT got it right. Look at LTCM. Look at Lehman, even 3 years later, know one would admit it was due to DERIVATIVES. With all this window dressing, covering ups, manipulations, the truth will take longer to review.
Subscribe to:
Posts (Atom)