Goldman Sachs "invested" about 1 Million in Obama's presidential runnings and got back 13 Billions and listen to this
Now, Buffett knew that better according to this video
Thursday, October 29, 2009
Behavioral Finance (Economics)
From Duke University - The Fuqua School of Business funny:
Few traits:
1. Irrational Behavior of investors
2. "Prospecting" theory - investors view the outcomes relative to the point where they started, such as "initial wealth" but not the underlying initial conditions of the market or stock itself.
3. Shortsightedness
4. Overconfidence
5. Hindsight Bias
6. "bipolar" approach
7. Representativeness
8. "Fear of regret" or "fear of losses" - tendency to sell winning stocks too soon and hold on to the loosing ones for too long due to "loss avoidance".
9. "Error of the Availability"
10."Halo Effect"
11."Framing"
12."Anchoring"
13. "Confirmation bias" - tendency to overweight confirming evidence, kind of like "selective vision" which is a result of unconscious "search for evidence"
14. "Escalation bias" or " sunk cost fallacy"
Researchers in the subject to look for:
1.James Montier "Behavioral Finance: Insights into Traditional Minds and Markets"
2.Amos Tversky and Daniel Kahneman(Stanford Univ, Nobel Prize in Economics 2002) "prospect theory"
3.Meir Statman (Santa Clara Univ)
4.Terry Odean (Univ of California at Berkeley)
5.John M. Keyes "people would rather fail conventionally than succeed unconventionally"
6.Stuart Sutherland "Irrationally: Why We Don't Think Straight!"
7.David Dreman?
8.Richard Thaler (Univ of Chicago) "Myopic Loss Aversion..."
9.Werner F.M. De Bondt (Univ?)
10.Terry Burnham "Mean Markets and Lizard Brains" (MIT?)
11.Woody Dorsey "Behavioral Trading: Methods for Measuring Investor Confidence...."
Few traits:
1. Irrational Behavior of investors
2. "Prospecting" theory - investors view the outcomes relative to the point where they started, such as "initial wealth" but not the underlying initial conditions of the market or stock itself.
3. Shortsightedness
4. Overconfidence
5. Hindsight Bias
6. "bipolar" approach
7. Representativeness
8. "Fear of regret" or "fear of losses" - tendency to sell winning stocks too soon and hold on to the loosing ones for too long due to "loss avoidance".
9. "Error of the Availability"
10."Halo Effect"
11."Framing"
12."Anchoring"
13. "Confirmation bias" - tendency to overweight confirming evidence, kind of like "selective vision" which is a result of unconscious "search for evidence"
14. "Escalation bias" or " sunk cost fallacy"
Researchers in the subject to look for:
1.James Montier "Behavioral Finance: Insights into Traditional Minds and Markets"
2.Amos Tversky and Daniel Kahneman(Stanford Univ, Nobel Prize in Economics 2002) "prospect theory"
3.Meir Statman (Santa Clara Univ)
4.Terry Odean (Univ of California at Berkeley)
5.John M. Keyes "people would rather fail conventionally than succeed unconventionally"
6.Stuart Sutherland "Irrationally: Why We Don't Think Straight!"
7.David Dreman?
8.Richard Thaler (Univ of Chicago) "Myopic Loss Aversion..."
9.Werner F.M. De Bondt (Univ?)
10.Terry Burnham "Mean Markets and Lizard Brains" (MIT?)
11.Woody Dorsey "Behavioral Trading: Methods for Measuring Investor Confidence...."
Wednesday, October 28, 2009
O'Shaughnessy, Technical Analiysis and former employer Bear Stearns
Technical Investment strategies based on analysis of the past.
International Performance seems not follow US strategies (look at data)
Big deal in Canada with RBC's distribution force.
It seems like he predicts the future. Will it work? 50-50.
Listen to J. O'Shaughnessy here
O'Shaughnessy at al. partented in 2007 trading system
Bear Stearn's Hedge Fund managers
The books recommended by Stock Trader's Almanac
Stock Trader's Almanac Best Investment Books
We were recently asked by a reader for a compleete list of all of our Best Investment Books of the Year.
Each year a list of our favorite books is included in the annual Stock Trader's Almanac and from this list the top book is selected for the Best Investment Book of the Year honor. In a handful of year's it was too difficult to choose just one, so in those years additional honors were handed out.
Here is a complete list of all books that have recieved the Best Investment Book of the Year honor since 1973, the first year. Many of the authors are familiar names and most of these titles are available on http://www.amazon.com/. If a year is repeated, then there was more than one recipent of the honor in that year.
2010 – Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy by Barry Ritholtz (John Wiley & Sons, $24.95)
2009 – The Post-American World by Fareed Zakaria (Norton, $25.95)
2009 – Common Wealth: Economics for a Crowded Planet by Jeffrey D. Sachs (Penguin Press, $27.95)
2008 – Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals by David Aronson (John Wiley & Sons, $95.00)
2007 – Entries & Exits: Visits to Sixteen Trading Rooms by Dr. Alexander Elder (John Wiley & Sons, $95.00)
2006 – Technical Analysis: Power Tools for Active Investors by Gerald Appel (Prentice-Hall, $44.95)
2005 – Trade Like A Hedge Fund: 20 Successful Uncorrelated Strategies & Techniques to Winning Profits by James Altucher (John Wiley & Sons, $59.95)
2004 – The Right Stock at the Right Time by Larry Williams (John Wiley & Sons, $27.95)
2003 – Trading Classic Chart Patterns by Thomas N. Bulkowski (John Wiley & Sons, $69.95)
2002 – Trading On Volume: The Key to Identifying and Profiting From Stock-Price Reversals by Don Cassidy (McGraw-Hill, $49.95)
2001 – The Lexus and the Olive Tree by Thomas L. Friedman (Farrar, Straus and Giroux, $27.50)
2001 – A Future Perfect: The Challenge and Hidden Promise of Globalization by John Micklethwait and Adrian Wooldridge (Crown Business, $27.50)
2000 - Building Wealth: The New Rules for Individuals, Companies and Nations by Lester Thurow (HarperBusiness, $14.00)
1999 – The Gorilla Game: Picking Winners in High Technology by Geoffrey Moore, Paul Johnson and Tom Kippola (HarperCollins, $26.00)
1998 – Point & Figure Charting: The Essential Application for Forecasting and Tracking Market Prices by Thomas J. Dorsey (John Wiley & Sons, $55.00)
1997 – Cyber Investing: Cracking Wall Street With Your Personal Computer by David L. Brown and Kassandra Bentley (John Wiley & Sons, $80.00)
1996 – What Works on Wall Street : A Guide to the Best-Performing Investment Strategies of All Time by James P. O’Shaughnessy (McGraw Hill, $36.95)
1995 – Invest Like The Best: Using Your Computer to Unlock the Secrets of the Top Money Managers by James P. O’Shaughnessy (McGraw Hill, $34.95)
1995 – 100 Minds The Made the Market by Kenneth L. Fisher (Pacific Publishing Group, $24.95)
1994 – The Money Monarchs: The Secrets of Today’s 10 Best Investment Managers by Douglas J. Donnelly (Irwin, $30.00)
1994 – The New Market Wizards: Conversations With America’s Top Traders by Jack D. Schwager (Harper, $17.99)
1993 – The Practical Forecasters Almanac: 137 Reliable Indicators for Investors, Hedgers, and Speculators edited by Edward Renshaw (Irwin, $55.00)
1993 – Blue Chips & Hot Tips: Identifying Emerging Growth Companies Most Likely to Succeed by W. Keith and Howard Schilit (Ny Inst of Finance, $19.95)
1992 – Trader Vic – Methods of a Wall Street Master by Victor Sperandeo (John Wiley & Sons, $29.95)
1991 – The New Money Masters by John Train (HarperBusiness, $16.00)
1990 – One up on Wall Street: How to Use What You Already Know to Make Money in the Market by Peter Lynch (Penguin, $13.95)
1989 – Stan Weinstein's Secrets For Profiting in Bull and Bear Markets by Stan Weinsteins (McGraw-Hill, $19.95)
1988 – The Wall Street Waltz: 90 Visual Perspectives : Illustrated Lessons from Financial Cycles and Trends by Kenneth L. Fisher (Pacific Publishing Group, $31.95)
1987 – Martin Zweig’s Winning on Wall Street by Martin Zweig (Warner, $19.99)
1986 – Contrary Investing: The Insider’s Guide to Buying Low and Selling High by Richard E. Band (Penguin, $9.95)
1985 – Strategic Investment Timing by Dick A. Stoken (Macmillan, $14.00)
1984 – Volume Cycles In The Stock Market by Richard W. Arms, Jr (Dow Jones-Irwin, $30.00)
1983 – Gaining On The Market by Charles J. Rolo (Little, Brown & Co, $14.95)
1982 – The Highman-De Limur Hypotheses by Arthur Highman and Charles de Limur (Nelson-Hall Publishers, $14.95)
1981 – Stock Market Trading Systems by Gerald Appel and Fred Hitschler (Dow Jones-Irwin, $30.00)
1980 – Investing On Your Own: How To Find Winning Stocks In Your Own Backyard by Richard L. Thorsell (McGraw Hill, $13.95)
1979 – How to Make Big Money in the Over-The-Counter Market by Milton Fisher (William Morrow & Co, $12.50)
1979 – The Momentum Gap Method by Lowell Miller (G.P. Putnam’s Sons, $15.00)
1979 – The Thinking Investor’s Guide to the Stock Market by Kiril Sokoloff (McGraw-Hill, $14.50)
1979 – Cycles: What They Are, What They Mean, How To Profit By Them by Dick A. Stoken (McGraw-Hill, $17.50)
1978 – New Encyclopedia of Stock Market Techniques A.W. Cohen Editor (Investors Intelligence, $34.95)
1978 – When To Sell by Justin Mamis and Robert Mamis (Farrar, Straus and Giroux, $9.95)
1977 – Technical Analysis of Stock Trends (5th ed.) by Robert D. Edwards and John Magee (John Magee, Springfield Massachusetts, $16.00)
1976 – The Financial Analyst’s Handbook, Sumner N. Levine, Editor (Dow Jones-Irwin, $30.00 per volume, two volumes)
1975 – How To Make Money In Wall Street by Louis Rukeyser (Doubleday, $7.95)
1974 – How The Average Investor Can Use Technical Analysis For Stock Profits by James Dines (Dines Chart Corp, N.Y., $19.95)
1973 – Winning Market Systems by Gerald Appel (Capitalist Reporter, Inc. N.Y., $20.00)
International Performance seems not follow US strategies (look at data)
Big deal in Canada with RBC's distribution force.
It seems like he predicts the future. Will it work? 50-50.
Listen to J. O'Shaughnessy here
O'Shaughnessy at al. partented in 2007 trading system
Bear Stearn's Hedge Fund managers
The books recommended by Stock Trader's Almanac
Stock Trader's Almanac Best Investment Books
We were recently asked by a reader for a compleete list of all of our Best Investment Books of the Year.
Each year a list of our favorite books is included in the annual Stock Trader's Almanac and from this list the top book is selected for the Best Investment Book of the Year honor. In a handful of year's it was too difficult to choose just one, so in those years additional honors were handed out.
Here is a complete list of all books that have recieved the Best Investment Book of the Year honor since 1973, the first year. Many of the authors are familiar names and most of these titles are available on http://www.amazon.com/. If a year is repeated, then there was more than one recipent of the honor in that year.
2010 – Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy by Barry Ritholtz (John Wiley & Sons, $24.95)
2009 – The Post-American World by Fareed Zakaria (Norton, $25.95)
2009 – Common Wealth: Economics for a Crowded Planet by Jeffrey D. Sachs (Penguin Press, $27.95)
2008 – Evidence-Based Technical Analysis: Applying the Scientific Method and Statistical Inference to Trading Signals by David Aronson (John Wiley & Sons, $95.00)
2007 – Entries & Exits: Visits to Sixteen Trading Rooms by Dr. Alexander Elder (John Wiley & Sons, $95.00)
2006 – Technical Analysis: Power Tools for Active Investors by Gerald Appel (Prentice-Hall, $44.95)
2005 – Trade Like A Hedge Fund: 20 Successful Uncorrelated Strategies & Techniques to Winning Profits by James Altucher (John Wiley & Sons, $59.95)
2004 – The Right Stock at the Right Time by Larry Williams (John Wiley & Sons, $27.95)
2003 – Trading Classic Chart Patterns by Thomas N. Bulkowski (John Wiley & Sons, $69.95)
2002 – Trading On Volume: The Key to Identifying and Profiting From Stock-Price Reversals by Don Cassidy (McGraw-Hill, $49.95)
2001 – The Lexus and the Olive Tree by Thomas L. Friedman (Farrar, Straus and Giroux, $27.50)
2001 – A Future Perfect: The Challenge and Hidden Promise of Globalization by John Micklethwait and Adrian Wooldridge (Crown Business, $27.50)
2000 - Building Wealth: The New Rules for Individuals, Companies and Nations by Lester Thurow (HarperBusiness, $14.00)
1999 – The Gorilla Game: Picking Winners in High Technology by Geoffrey Moore, Paul Johnson and Tom Kippola (HarperCollins, $26.00)
1998 – Point & Figure Charting: The Essential Application for Forecasting and Tracking Market Prices by Thomas J. Dorsey (John Wiley & Sons, $55.00)
1997 – Cyber Investing: Cracking Wall Street With Your Personal Computer by David L. Brown and Kassandra Bentley (John Wiley & Sons, $80.00)
1996 – What Works on Wall Street : A Guide to the Best-Performing Investment Strategies of All Time by James P. O’Shaughnessy (McGraw Hill, $36.95)
1995 – Invest Like The Best: Using Your Computer to Unlock the Secrets of the Top Money Managers by James P. O’Shaughnessy (McGraw Hill, $34.95)
1995 – 100 Minds The Made the Market by Kenneth L. Fisher (Pacific Publishing Group, $24.95)
1994 – The Money Monarchs: The Secrets of Today’s 10 Best Investment Managers by Douglas J. Donnelly (Irwin, $30.00)
1994 – The New Market Wizards: Conversations With America’s Top Traders by Jack D. Schwager (Harper, $17.99)
1993 – The Practical Forecasters Almanac: 137 Reliable Indicators for Investors, Hedgers, and Speculators edited by Edward Renshaw (Irwin, $55.00)
1993 – Blue Chips & Hot Tips: Identifying Emerging Growth Companies Most Likely to Succeed by W. Keith and Howard Schilit (Ny Inst of Finance, $19.95)
1992 – Trader Vic – Methods of a Wall Street Master by Victor Sperandeo (John Wiley & Sons, $29.95)
1991 – The New Money Masters by John Train (HarperBusiness, $16.00)
1990 – One up on Wall Street: How to Use What You Already Know to Make Money in the Market by Peter Lynch (Penguin, $13.95)
1989 – Stan Weinstein's Secrets For Profiting in Bull and Bear Markets by Stan Weinsteins (McGraw-Hill, $19.95)
1988 – The Wall Street Waltz: 90 Visual Perspectives : Illustrated Lessons from Financial Cycles and Trends by Kenneth L. Fisher (Pacific Publishing Group, $31.95)
1987 – Martin Zweig’s Winning on Wall Street by Martin Zweig (Warner, $19.99)
1986 – Contrary Investing: The Insider’s Guide to Buying Low and Selling High by Richard E. Band (Penguin, $9.95)
1985 – Strategic Investment Timing by Dick A. Stoken (Macmillan, $14.00)
1984 – Volume Cycles In The Stock Market by Richard W. Arms, Jr (Dow Jones-Irwin, $30.00)
1983 – Gaining On The Market by Charles J. Rolo (Little, Brown & Co, $14.95)
1982 – The Highman-De Limur Hypotheses by Arthur Highman and Charles de Limur (Nelson-Hall Publishers, $14.95)
1981 – Stock Market Trading Systems by Gerald Appel and Fred Hitschler (Dow Jones-Irwin, $30.00)
1980 – Investing On Your Own: How To Find Winning Stocks In Your Own Backyard by Richard L. Thorsell (McGraw Hill, $13.95)
1979 – How to Make Big Money in the Over-The-Counter Market by Milton Fisher (William Morrow & Co, $12.50)
1979 – The Momentum Gap Method by Lowell Miller (G.P. Putnam’s Sons, $15.00)
1979 – The Thinking Investor’s Guide to the Stock Market by Kiril Sokoloff (McGraw-Hill, $14.50)
1979 – Cycles: What They Are, What They Mean, How To Profit By Them by Dick A. Stoken (McGraw-Hill, $17.50)
1978 – New Encyclopedia of Stock Market Techniques A.W. Cohen Editor (Investors Intelligence, $34.95)
1978 – When To Sell by Justin Mamis and Robert Mamis (Farrar, Straus and Giroux, $9.95)
1977 – Technical Analysis of Stock Trends (5th ed.) by Robert D. Edwards and John Magee (John Magee, Springfield Massachusetts, $16.00)
1976 – The Financial Analyst’s Handbook, Sumner N. Levine, Editor (Dow Jones-Irwin, $30.00 per volume, two volumes)
1975 – How To Make Money In Wall Street by Louis Rukeyser (Doubleday, $7.95)
1974 – How The Average Investor Can Use Technical Analysis For Stock Profits by James Dines (Dines Chart Corp, N.Y., $19.95)
1973 – Winning Market Systems by Gerald Appel (Capitalist Reporter, Inc. N.Y., $20.00)
Tuesday, October 27, 2009
Fannie Mae Eases Credit To Aid Mortgage Lending from 1999 NYT
It is interesting to look back and analyse, especially this giant FM@FM:
"The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring."
I see now how useful information can be, the article was freely available to anyone wanted to analyse it :)
"The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring."
I see now how useful information can be, the article was freely available to anyone wanted to analyse it :)
Many, Many, Many..... (Location, Location, Location....)
Analysts and Companies in one place claimed to be "a technology platform that extracts key business and financial events from traditional news and alternative media/blog sources" - Alacra Pulse and its peers whose rating on Alexa not so bad.
Wednesday, October 21, 2009
Wall Street and the story (history)
1929 crash
1. Leverage up to the necks - 90+%, buying on margin
2. Market Manipulations have been born
3. "If a shoe-shining boys knows as much about the market as i do, it's maybe the time to get out"
4. Kahn Brothers - the oldest financial analyst in the world is there
5. Credit was easy and technology made possible to spread the words (tickers)
6. The ordinary people became market participants
7. Wall Street banks opened the doors to general public - Charles Mitchell was a natural salesman and first stock/bonds promoter, Kennedy was the first one too
8. Government and the Wall Street bankers were allied and no regulations were thought needed
9. Cash injections of bankers own $$$$ were exercised to restore public confidence
10. "Magical Power" names Morgan, Lamont, etc
11. Credit default problems, liquidity shortage, bankruptcies
12. Government (Hoover) did not interfere in loss of 25+ Billions
13. People committed suicides
14. Domino effect - 3000 banks were closed
15. All financial system seemed worthless
16. Roosevelt as a new president regulates financial system to restore the confidence in the market, SEC introduced and Kennedy was named a chairman (fox in a coop)
17. "Low standards in higher places"
And look what happens:
The coming COLLAPSE of the MIDDLE Class in America
From Harvard Law School professor Elizabeth Warren March 2007
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