You are so wrong. When you take paltry gains, you will never make the big gains. When big hedge funds that make hundreds of millions each year just by following the trend, you think you know better? You do not. I used to take paltry gains on trades that work out. That did not turn out so well. Remember, you have to cover all your losses before you turn positive overall. Now, I let the trend take my position where it is likely, to continue. There are times, it will not work out. That is a given. However, my gains now are massive compared to before. Trend following works. Go back to the drawing board and study it. There is no need to reinvent the wheel.
Every move in the market explained in 2 sentences
- Thread starter JigsawTrading
- Start date
You are so wrong. When you take paltry gains, you will never make the big gains. When big hedge funds that make hundreds of millions each year just by following the trend, you think you know better? You do not. I used to take paltry gains on trades that work out. That did not turn out so well. Remember, you have to cover all your losses before you turn positive overall. Now, I let the trend take my position where it is likely, to continue. There are times, it will not work out. That is a given. However, my gains now are massive compared to before. Trend following works. Go back to the drawing board and study it. There is no need to reinvent the wheel.
This might be true in many cases, but certainly not a general rule. Pump and Dump schemes don't follow this rule. In a typical pump & dump, a group of large stock operators accumulate stock, mark it up, distribute, then mark it down.
If you think about their intention at the beginning, they were not expecting the next trader to do anything, they were just executing their plan.
Activist Investors also don't care about the next trader actions. They are buying the stock for a strategic reason, i.e. to gain enough control to put them on the board of the company and effectively enforce the company management to change some or all of their actions. The ultimate goal of course is to make money, but they want to participate directly in creating the shareholders' value (And this might or might not be related to the stock price), sometimes activists want to force the company to start paying dividends (Because they have a pile of cash and they are not effectively using it), sometimes they want to force the company to merge with another, sometimes they want to enforce an acquisition or sale of some unuseful assets and distribute a one time special dividend form the proceeds of the assets, etc...
The original claim of the OP was that every trade can be explained by expectations of other traders. As you point out Warren Buffet doesn't follow this rule. Therefore, the rule doesn't explain all traders.
Rate of return yes, but what I am saying is there are investors who only care about yield, not return. In particular, there are people in retirement who only care about meeting their monthly bills, and have no intent to ever sell their stock. They don't even want to look at it. The rule you propose doesn't explain why they bought the stock. I admit that there are a lot of people who do care about preserving capital, and it's a rational decision. But the retirement folks who only care about the dividends aren't being rational (prefer more money to less, prefer less risk to more), and thus don't fit in the rule.
Buffett is not a trader, he is an investor but I guess that is just semantics. Anyway thinking about it further IMO he shouldn't be excluded from the same investment/trading decisions we all make. See his moves he made getting into and out of airlines in recent years for instance.
That's fair. I would revise my statement to be for buy-and-hold-forever trades, rather than traders. Buffet is known for his long holding periods, even if he sometimes cashes out. (His Oracle stake comes to mind.)
am i?
95 % of traders cannot do it.
the emotionally easy trade is the opposite. and a loser
i do not think you understand what i am saying...
trend following may make you big money but it is not easy
which idiot ever starts an airline.
i di not think there was even one that did not go bankrupt
ADM...Throw a dart at any point in the company for the last 20 years. Buy at that point...What is your reinvested return?
If I was 80 years old (and wanted income)...I would hold ADM till I die. If I didn't care about my estate and the value of the stock. They may reduce their dividend, but not eliminate it. I'll die in a rest home not caring what it is doing.
November 5, 2020
ADM’s (NYSE: ADM) Board of Directors has declared a cash dividend of 36.0 cents per share on the company’s common stock. The dividend is payable on Dec. 10, 2020, to shareholders of record on Nov. 19, 2020.
This is ADM’s 356th consecutive quarterly payment, a record of 89 years of uninterrupted dividends. As of Sept. 30, 2020, there were 555,954,513 shares of ADM common stock outstanding.
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I agree with that - so many people say HFTs are bad - and then ride the move created by institutional trading. Same thing.