Winston's Investment Ideas 01 (Nov 08 - Apr 10)

[Aspellian]

TOL :
- what could be the catalyst to stop this market from going higher?
- has the markets go too high too soon? eg. STI from 1400 and almost 2800 soon - double within 4 months??
- read that UK economy under huge pressure - if so, sterling pounds hanging on the cliff (S&P has put Sterling's AAA rating "under review" - the only currency among the 14 AAAs.) If the queen catches a very bad cold and in coma, this could be a bad enough catalyst to stop the parties
- in future, always listen to the market and be on the right side; now awaiting pullbacks (if there will ever be one)
- when everyone think that market will forever go up, that no pullback is possible, only then will market surprise us all (again!)

[winston]

in future, always listen to the market and be on the right side; now awaiting pullbacks (if there will ever be one)

Ha Ha ... Unfortunately, I'm not too good in predicting the general direction of the market. So I'm going back to picking stocks ..

[Aspellian]

in future, always listen to the market and be on the right side; now awaiting pullbacks (if there will ever be one)

Ha Ha ... Unfortunately, I'm not too good in predicting the general direction of the market. So I'm going back to picking stocks ..

No point predicting market - dun think anyone can do it consistently. Just follow the market lead and humbly follow behind it, whether uptrend or downtrend. Be a humble servant. No one can beat the market at its own game.

<PS: actually in a way i am speaking more to myself to be humble cos i have a strong pride - and i have taken hard knocks before some sense came to me .. lots to learn. Like what Kenny says, investment journey really lets you learn about yourself more and understand who truly is the Master>

[b0rderc0llie]

No point predicting market - dun think anyone can do it consistently. Just follow the market lead and humbly follow behind it, whether uptrend or downtrend. Be a humble servant. No one can beat the market at its own game.

How to follow the market lead and humbly follow behind it? Is the market now in an uptrend or downtrend? Are you buying now or selling?

[kennynah]

bc : i know what you mean.... sometimes, a bit difficult to explain the oxymoron trader behaviour...like myself...everyday grasping with the meaning of Life...read Winston's thread until headache.... frak lah... go mcnona, buy an ice cream cone and chill.... bluff bluff teach some young pretty students on statistics better....wahahaha...

[Aspellian]

I was shorting when market rally is under pressure but still it was pre-mature and I shouldnt short before market actually breaks. When market went back strong and on an uptrend, i only managed to swallow my pride and cut my losses on shorts (one of the rule) but dare not/didnt think about loading up the truck on longs (also because of pride - i was proven wrong initially and was soothing my hurt ego).

So here i am - sucking my thumb, twindling my fingers instead of faithfully following my rules as it has been revealed to me here:

viewtopic.php?f=16&t=262

This last episode only solidifies my faith further that it can be done....

Like what is often said in this forum - quote "The market will always be there". Now is the perfect time to exercise my patience as i wait for the pull-back, market break and eventual uptrend again while i continue to research and back-test and study more books. I just need to remind myself to be on the right side. I will be really bless if I can humbly follow these simple golden rules and throw away my pride and ego that I can win in the market. This old belief has only brought me so far (on a negative dent to portfolio).

Thanks TzS!

[kennynah]

aspellian...

i really dont wish for you to misunderstand what i have been posting in reaction to your posts... and with the utmost respect for your opinion, i will explain my purpose(perhaps BC was hinting at as well) of writing what i wrote...

you see, we all have gone through the phase of "seeking" the best way to win the market. mostly, we all start off with following golden adages; such as those you have constantly posted. absolutely nothing wrong with this line of thought.

but some of us, over time, realize that these golden arches of "truth" are sometimes not very applicable to ALL scenarios. for example : "letting market lead the way until it is all very clear, and we humbly follow it... " by this, it should imply that when i see a upward golden cross of MA lines, I should go Long, no matter what. Technically, this is correct a procedure. BUT it is not always the case. There will always be some other TA/FA indicators that will come into the picture, clouding that decision to trade.

another famous adage : "follow the trend, until it bends".... , if so, why would you or I not go Long now? isn't the March onwards rally until now, very very clear that a rally trend is underway? it is all coast clear, especially in the last 2-3 days when SPX clearly invalidated the H&S pattern... so, why the hesitation?
again, adages are there to help us trade wisely...not impede us by being too obtuse about repeating the lines for the sake of.

in a gist, my friend, all that i wish to share with you and with all good intentions, is this...

read, memorize all you want about who said what...but it is only after you have personally experienced and know what the words of famous adages mean, will you really begin to appreciate what it means by "let the trend be your best friend, until it bends, cos he is a homo"....wahahaha...

to finally seal this coffin.... i ask you this simple question...

... as i wait for the pull-back

at what point will the pull back be sufficient for you to consider that ithe trend is still intact for a Long? or, by the time the pullback occurs, you will begin to wonder of this correction is just at infancy, and in actual fact, is not a minor correction but a trend breaker...

specifically... supposing SPX corrects to ~945, which is the tip of the Head of H&S pattern, do you then go Long? why do you go Long? isn't there a possibility that it could break further down, why not wait to see what happens? so another day passes, and it does breakdown below 945, then what? go Short? why go Short? afterall, the rally trend is still in tact, isn't it?...shouldn't you go Long instead? But if you had gone Long and SPX continues to breakdown to H&S neckline, you will start thinking you've made too early a trade...kick yourself, drink silly, etc... But supposing, you did not go Short at 945, thinking it is a Long rally...and it goes breaking down days after...again you kick yourself for not taking action...etc...
so, you see... there's no such thing as a clear trend... a trend is in HINDSIGHT...like all of O'Neil's propositions about follow through days... nothing is known in advance until the day after tomorrow... but that is no use... we make money by committing a position now for a result 1 second, 1 min, 1 hour, 1 day, 1 week, 1 month, 1 year or years later... it makes no money doing back testing...

therefore, at some point, you NEED to make a prediction....NO one ever trades/invest without making a prediction of where price will go to...it is called a trade OPINION.....and traders/investors will win or lose simply by it... becos, there is NEVER EVER such a thing as a sure bet...like when the trend is so so so soooooo clear waiting for you to go Long or Short....it will happen only whe the messiah makes his return to earth...
ergo.... experiences are garnered from making trades...not by reading books...

i hope this helps...good luck !!!

i need it too...wahahaha...

[b0rderc0llie]

Kenny, hehe, I think I read one of your posts that said something like there isnt any TA signals to suggest that the current uptrend is going to turn around. And, even though I do not know about TA, I see an uptrend since the market is up consecutively every day. I just do not know if the trend will continue or not.

So, it is indeed oxymoronic when a trend trader does not go into a long position now, but worry about the market being too high

Aspellian, from what I understand from your post, you are saying that you did not wait until the market is in a clear downtrend before shorting it, therefore you cut loss when the market went into an uptrend. To me, cutting loss from a short position is equivalent to going long, so you are following your rules to follow the trend.

[kennynah]

bc : i must remind you that i write rubbish....most times...hahaha....i am surprised my account is not banned yet...

[Aspellian]

Thanks all guys! Interesting tots knn, thanks for sharing. i appreciate it! i know i have much to learn.
good luck to all!
PS: on hindsights, all of us are billionaires!! hahaha!!!