Thanks. I have to think about this.
current PE ratios - one says buy, the other sell....
- Thread starter JackRab
- Start date
"Keynesian policy is more geared toward a longer timespan than a day, but it will tell you where stocks are going to go."
If you want to be a successful investor a strong background in macro economics is essential!!!! (Keynes invented Macro Economics!) Read "zombie economics" by John Quiggin, read everything you can get your hands on by George Soros. Especially the "Alchemy of Finance". Read undergrad economic texts. Read everything. But especially read Soros. Make friends with a famous economist and pick their mind. Economists have no clue about markets, but they do understand macro economics and everything that is wrong with the neoclassical models. that is what you need to understand for successful investing. Step one: throw the efficient markets hypothesis out the window. step two: throw equilibrium theory out the window. step three: recognize that markets tend to move away from equilibrium, not towards it. They can move toward equilibrium of course, but they more often don't. Step 4: forget short time frame trading -- that will make your broker rich but not you. Step 5: Invest in what you know, and adopt a longer time frame. Step 6: start making money.
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http://www.zerohedge.com/article/po...ell-how-frontrun-frontrunning-primary-dealers
It's just one article about it, there are many many more. I don't personally trade like this, but hey if it helps you all the better.
Because the study of Economics is virtually completely meaningless for a trader,
Economics are for suits and old people; traders only have dollar signs in their eyes and a Porsche too -- and a slew of other weird emotions in their heads,
If you try to apply economic/investor principles to trading...I must imagine you must be getting killed in the markets,
But doesn't Tim Sykes know everything there is to know???
Well he's made millions selling get rich quick. Can you blame him?
He's not different than anyone before,
the only thing difference now is that real estate is the get rich quick scheme of the day. He's fading because mom and pop would like to flip a house instead of invest in penny stocks.
My take? I once held stock in Minerco, and I did get a 3,000% return on my money.
I didn't even remember I had it until one day I got an alert about it. I sold instantly and I think I took it down about half a cent.
There is no way I'd ever touch those things unless I was buying a lottery ticket.
Shiller PE is retarded. it's backward looking but the problem is stock prices reflect future expectations whose sole relationship with realized data is that they are somewhat based of off them. that's why the whole overvalued cuz PE so high ##@ is dumb as shit. When you break down algebraically what drives a PE ratio you realize that because these drivers are so different today from what they were 10/20/30 years ago you cannot compare them.
OK you are one of those that say this time it is different.
i'm not saying the whole cycle is different just that shiller PE uses 10 year past data and that none of those had an expectation of -1000bps to the tax rate or such a low cost of capital :/. By taking the last 10 years you're failing to adjust them for the cycle. you have to compare PE ratio with another period where interest rates were just as low.OK you are one of those that say this time it is different.