Altucher Tells The Truth About the Market
- Thread starter marketsurfer
- Start date
LOL!!! I am just speculating creatively about what would happen should the markets become predictable. Perhaps it is impossible, but maybe not, I really don't know for certain. But i do know that prolonged periods of little movement in the financial markets can and do happen. The public losses interest, like in the 1970's, then the next bull market explodes when its least expected----that's history.
Surf, you are too narrowly focused on equities which make up like 2% of the capital market structure. We have seen huge moves in oil, gas, the grains, cotton, currencies, bonds, hell everything. Futhermore, there are stock markets around the world that move 3% to 5% a day!!!!!! And some of them are very liquid. You need to expand your horizon.
There are economic reasons why volatility is low and there are economic reasons why we have cycles. Nothing has changed in 200 years. I doubt much will change in the next 200.
No doubt and good points-- I am just talking about the US stock market. I should have made that clear from the start-- my apologies.
Where are you now Mav? Are you still active in the financial markets? If you are ever in South FLA, let's grab a drink or lunch!
Surf, in the capital markets, you can't isolate one variable from the others. Stocks are priced off of their future discounted cash flows. Indices are priced off the future discounted yield. That yield has a relationship to market rates of interest. If all the pieces in the capital market structure are moving around, you can't simply hold equities constant. For if you could, you could reap billions from the arbitrage.
Furthermore, on a long term basis it's very difficult to make the argument stocks are not moving when indices have more then tripled off their 2009 lows and many stocks are up 5 and 10 fold.
As for daytrading, well, markets have become more efficient. More and more investors have turned to ETF's and indexing and away from individual stock purchases which means there is less dumb money simply buying the highs and selling the lows.
first chart is pretty telling
http://www.chicagofed.org/webpages/publications/speeches/our_dual_mandate.cfm
http://www.chicagofed.org/webpages/publications/speeches/our_dual_mandate.cfm
My two Cents:
James is not to be trifled with. As a writer he has mastered the art of making a living as an attention whore, and as such is a master hustler himself, so he knows the game. That is an honest complement, by the way. Its not easy, I could not do it. Likely no more probable than making a living as a day trader, I would guess.
IMO, trading works best as a format to win (sportsman), a vehicle to get rich (entrepreneur), or as a hobby(average guy trading). For most it ends up as a hobby.
The career trader idea, where u make your monthly nut with profits, is not a good model for success. Indeed I would call it a terrible model.
A secret to many market wizard level people that most will not tell u is that they built success not just on hard work and natural talent, but very fortunate circumstances - connections, family money, dumb luck, etc. These extra things are what give many the opportunity to develop their skills. The PR "log cabin" narratives mostly fail to include this part, and I say the above without bitterness, as indeed I was born past 3rd base in most respects.
If u are a middle class guy who just wants to trade, don't have the right background, not wealthy, etc, u can, but u need to be realistic and entrepreneurial.
Don't try to be a "careerist" trader with small capital. That is mostly dead. Make it a goal of setting up a low-overhead managed account business or CTA. Or go in with the intent of marketing a service to the hobby market. Who cares? Just find a way to make the $$ as a realist. Get some operating leverage, social leverage working in your favor. Work from the position u find yourself in. If people know your name and think u have ethics and some insight, u can build on that. Find ways to meet rich people, there is zero leverage in being a loner, for example.
The best position to be in is free rolling while earning annuity-type income. If u enjoy the game u sit back and wait for the best trades, without the pressure. The worst is "trading for a living" with meager means. If that last thing is your "goal" or what you are "hoping to achieve" I think u are headed down a very tough road.
James is not to be trifled with. As a writer he has mastered the art of making a living as an attention whore, and as such is a master hustler himself, so he knows the game. That is an honest complement, by the way. Its not easy, I could not do it. Likely no more probable than making a living as a day trader, I would guess.
IMO, trading works best as a format to win (sportsman), a vehicle to get rich (entrepreneur), or as a hobby(average guy trading). For most it ends up as a hobby.
The career trader idea, where u make your monthly nut with profits, is not a good model for success. Indeed I would call it a terrible model.
A secret to many market wizard level people that most will not tell u is that they built success not just on hard work and natural talent, but very fortunate circumstances - connections, family money, dumb luck, etc. These extra things are what give many the opportunity to develop their skills. The PR "log cabin" narratives mostly fail to include this part, and I say the above without bitterness, as indeed I was born past 3rd base in most respects.
If u are a middle class guy who just wants to trade, don't have the right background, not wealthy, etc, u can, but u need to be realistic and entrepreneurial.
Don't try to be a "careerist" trader with small capital. That is mostly dead. Make it a goal of setting up a low-overhead managed account business or CTA. Or go in with the intent of marketing a service to the hobby market. Who cares? Just find a way to make the $$ as a realist. Get some operating leverage, social leverage working in your favor. Work from the position u find yourself in. If people know your name and think u have ethics and some insight, u can build on that. Find ways to meet rich people, there is zero leverage in being a loner, for example.
The best position to be in is free rolling while earning annuity-type income. If u enjoy the game u sit back and wait for the best trades, without the pressure. The worst is "trading for a living" with meager means. If that last thing is your "goal" or what you are "hoping to achieve" I think u are headed down a very tough road.
Fantastic advice, Mr.N If I may, I would like to add a bit more high definition reality to your already true life treatise.
First, unfortunately, many who try to trade for a living with meager means are anti-social by choice, circumstance, or are simply born that way. Not to mention that the market holds an extremely strong attraction to loner types.
These personality traits are almost supernaturally attracted to the concept of working alone and making a living in the market. No troubling people to bother them. These folks, the majority I am afraid, will never have social leverage or connections to lift their CTA biz or whatever. They are guaranteed to fail and should only keep trading as a hobby
Even the scammer marty frankel --for all his scary looks-- had a strange kind of charisma that attracted folks
with money. The bottom line is, if you can not attract capital--keep trading a hobby and don't try to make a living at it. It's a hard truth to swallow-- but its true. Trading is a great hobby, but dont' let it get control of your life.
surf
First, unfortunately, many who try to trade for a living with meager means are anti-social by choice, circumstance, or are simply born that way. Not to mention that the market holds an extremely strong attraction to loner types.
These personality traits are almost supernaturally attracted to the concept of working alone and making a living in the market. No troubling people to bother them. These folks, the majority I am afraid, will never have social leverage or connections to lift their CTA biz or whatever. They are guaranteed to fail and should only keep trading as a hobby
Even the scammer marty frankel --for all his scary looks-- had a strange kind of charisma that attracted folks
with money. The bottom line is, if you can not attract capital--keep trading a hobby and don't try to make a living at it. It's a hard truth to swallow-- but its true. Trading is a great hobby, but dont' let it get control of your life.
surf