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You have to survive

You have to survive
Every day is a battle, survival is rule #1

Sunday, February 7, 2016

Trading vs Investing

Whats the difference?

Its confusing to me because investors make trades, just more longer term such as a position trader, but people describe each as being "different".  Im a position trader, but im not sure if im an investor.

A trader's "style" refers to the timeframe or holding period in which stocks, commodities or other trading instruments are bought and sold. Traders generally fall into one of four categories:

Position Trader – positions are held from months to years
Swing Trader – positions are held from days to weeks
Day Trader – positions are held throughout the day only with no overnight positions
Scalp Trader – positions are held for seconds to minutes with no overnight positions

So is an investor more longer term than a position trader?  Maybe.

Maybe investing should be called long term position trader to prevent confusion.  I think psychology of older people with money affects the term used.  They think it sounds more safe and responsible to be an investor, rather a trader.

im a position trader, i make bets. Investors make bets but they might be longer than a few years.  If i happened to hold onto a position trader for a few extra years, would i then be an investor?  This is confusing.

Friday, February 5, 2016

Buybacks

About a trillion $ was spent buy public companies to purchase their own shares.  It was a record year.  But as usual, when everyone does something, few do it right.  Companies were buying shares to make their EPS ratio bigger, but they did it when the market plateaued at all time highs.  There was no more buying pressure.  Why make your numbers look good when few are buying?  Is it fun fighting over scraps?  Now there are companies with nice EPS ratios but there stock just keeps drifting down.
It seems like normally companies buy back to coax people into buying and pushing the stock price up.  That sounds ljke a bad reason to buy something but thats how people are.
Maybe they bought back shares for different reasons, like preventing a hostile takeover, to give as a bonus to employees or whatever.

What i can say is i would have argued with all of these executives and cfo's about their timing.  Horrible timing.  The people making these decisions know little.  Instead of going overboard in Q4 2015, they should have waited till Q2 or Q3 of 2016.  They could have gotten similar EPS but at a much cheaper price.  Gopro bought heavily and their stock just tanked.  Noone cared. I guess a newer company like that wont have anyone with real experience.  Established companies have more experience in their staff, they will make bad decisions.  Newer companies will nearly self implode.

Linkedin

Its lost about half of its value after a bad outlook was created.  I have a feeling the execs are trying to kill the stock so they can buy it back real cheap.  It sounds like they elaborated on their bad outlook pretty well, saying anything bad they could.  They would do this if they have big plans in the future. 

Thursday, February 4, 2016

Oil supply

To put these storage issues into context, Goldman estimates $1 billion of gold would fit into a bedroom closet. Crude oil of the same value would require 17 supertanker ships that can hold about 2 million barrels of oil each.

OPEC continues to pump oil at full throttle as it seeks to avoid losing further market share to higher cost producers in the U.S. and elsewhere.

Many figured U.S. shale drillers would scale back much faster as prices fell.

The latest EIA figures show that the U.S. pumped 9.32 million barrels per day in November. That's actually up 1% from the year before and not too far below (4%) the April 2015 peak.

So...aramco's strategy did not work.  Oil companies could make a killing in the next few years.  We will never have a problem storing gold.  Opec is desperate.

Wednesday, February 3, 2016

Several industries are down

Auto makers are down a lot and biotech is close to -40% from its peak.

I wish ford or gm or a biotech company was in my 401k.

Monday, February 1, 2016

Whole market/industry specific

A recession or expansion refers to an entire economy being in the same boom or bust.  The truth is the performance of one or more industries affects others.  Everyone affects everyone.  Different industries are only a little connected, not completely.  So it is possible to have a few industries crash while the overall economy is expanding.

What makes a recession or expansion is many industries moving together.  People talk about recessions, referring to the whole economy but they hardly care about recessions for specific industries.

My point is one should monitor specific industries and buy them low/sell them high.  Maybe some will go down together, and its called a recession, maybe not.  I would buy x industry when its at a routine low whether its the only industry crashing during an expansion or recession.

People talk about the whole economy as if there is nearly 100% correllation and thats not the most expert way to view things.