most of these persons are, in fact, largely concerned, not with making superior long - term forecasts of the probable yield of an investment over its whole life, but with foreseeing changes in the conventional basis of valuation a short time ahead of the general public. They are concerned, not with what an investment is really worth to a man who buys it “ for keeps, ” but with what the market will value it at, under the influence of mass psychology, three months or a year hence.
Bottom-line: Focus on price to earnings not price!
a game of Snap, of Old Maid, of Musical Chairs — a pastime in which he is victor who says Snap neither too soon nor too late, who passed the Old Maid to his neighbor before the game is over, who secures a
chair for himself when the music stops. These games can be played with zest and enjoyment, though all the players know that it is the Old Maid which is circulating, or that when the music stops some of the players
will find themselves unseated.
Fix a price and be done with it if it is achieved, don't wait for the trend to help you!
Momentum investing is like those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the
fancy of the other competitors, all of whom are looking at the problem from the same point of view. It is not a case of choosing those which, to the best of one ’ s judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.
Do not follow the trend - if you know this for a fact, one should take the route of investing against the trend until it becomes a trend in itself; Mostly likely that will not be the case because a vast majority of investors are still trend followers.
. . . our desire to hold Money as a store of wealth is a barometer of the degree of our distrust of our own calculations and conventions concerning the future . . . The possession of actual money lulls our disquietude; and the premium which we require to make us part with money is the measure of the degree of our disquietude.
Having spent a decade trying to anticipate the quicksilver tacks of the market — and having been wrong - footed on more than one occasion — Keynes fi nally concluded that those who run with the
crowd are apt to be trampled.
Buridan ’ s ass is an apocryphal beast that, faced with two equally attractive and accessible bales of hay,
starved while deliberating which one was preferable. Like the donkey of the parable, stock market participants — if they were to attempt to apply a purely rational approach to their investment decisions — would also be rendered immobile by the daunting “ what ifs ” of an unknowable future.
Market opportunities arise due to divergent opinions by the market participants. Generally, this is a function of existing environment which is extrapolated into immediate future.
. . . a large proportion of our positive activities depend on spontaneous optimism rather than on a mathematical expectation, whether moral or hedonistic or economic. Most, probably, of our decisions to
do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits . . . and not as the outcome of a weighted average of quantitative
benefi ts multiplied by quantitative probabilities.
Modi wave and portugal debt over underlying economics!
the facts of the existing situation enter, in a sense disproportionately, into the formation of our long - term expectations; our usual practice being to take the existing situation and to project it into the future, modified only to the extent that we have more or less definite reasons for expecting a change.
Faced with the perplexities and uncertainties of the modern world, market values will fl uctuate much more widely than will seem reasonable in the light of after - events . . .
this is why pivotapp works...
The economy, as Keynes noted, exhibits what have come to be called “ emergent properties ” : complex, sometimes unpredictable, collective behavior in a system, arising out of the multiplicity of interactions between its individual constituents.
That the sins of the London Stock Exchange are less than those of Wall Street may be due, not so much to differences in national character, as to the fact that to the average Englishman Throgmorton Street is, compared with Wall Street to the average American, inaccessible and very expensive.
. . . a frequent opportunity to the individual . . . to revise his commitments.It is as though a farmer, having tapped his barometer after breakfast, could decide to remove his capital from the farming business between 10 and 11 in the morning and reconsider whether he should return to it later in the week.
It might have been supposed that competition between expert professionals, possessing judgment and knowledge beyond that of the average private investor, would correct the vagaries of the ignorant
individual left to himself. It happens, however, that the energies and skill of the professional investor and speculator are mainly occupied otherwise. For most of these persons are, in fact, largely concerned, not
with making superior long - term forecasts of the probable yield of an investment over its whole life, but with foreseeing changes in the conventional basis of valuation a short time ahead of the general public.
Bottom-line: Focus on price to earnings not price!
a game of Snap, of Old Maid, of Musical Chairs — a pastime in which he is victor who says Snap neither too soon nor too late, who passed the Old Maid to his neighbor before the game is over, who secures a
chair for himself when the music stops. These games can be played with zest and enjoyment, though all the players know that it is the Old Maid which is circulating, or that when the music stops some of the players
will find themselves unseated.
Fix a price and be done with it if it is achieved, don't wait for the trend to help you!
Momentum investing is like those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the
fancy of the other competitors, all of whom are looking at the problem from the same point of view. It is not a case of choosing those which, to the best of one ’ s judgment, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.
Do not follow the trend - if you know this for a fact, one should take the route of investing against the trend until it becomes a trend in itself; Mostly likely that will not be the case because a vast majority of investors are still trend followers.
. . . our desire to hold Money as a store of wealth is a barometer of the degree of our distrust of our own calculations and conventions concerning the future . . . The possession of actual money lulls our disquietude; and the premium which we require to make us part with money is the measure of the degree of our disquietude.
Having spent a decade trying to anticipate the quicksilver tacks of the market — and having been wrong - footed on more than one occasion — Keynes fi nally concluded that those who run with the
crowd are apt to be trampled.
Buridan ’ s ass is an apocryphal beast that, faced with two equally attractive and accessible bales of hay,
starved while deliberating which one was preferable. Like the donkey of the parable, stock market participants — if they were to attempt to apply a purely rational approach to their investment decisions — would also be rendered immobile by the daunting “ what ifs ” of an unknowable future.
Market opportunities arise due to divergent opinions by the market participants. Generally, this is a function of existing environment which is extrapolated into immediate future.
. . . a large proportion of our positive activities depend on spontaneous optimism rather than on a mathematical expectation, whether moral or hedonistic or economic. Most, probably, of our decisions to
do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits . . . and not as the outcome of a weighted average of quantitative
benefi ts multiplied by quantitative probabilities.
Modi wave and portugal debt over underlying economics!
the facts of the existing situation enter, in a sense disproportionately, into the formation of our long - term expectations; our usual practice being to take the existing situation and to project it into the future, modified only to the extent that we have more or less definite reasons for expecting a change.
Faced with the perplexities and uncertainties of the modern world, market values will fl uctuate much more widely than will seem reasonable in the light of after - events . . .
this is why pivotapp works...
The economy, as Keynes noted, exhibits what have come to be called “ emergent properties ” : complex, sometimes unpredictable, collective behavior in a system, arising out of the multiplicity of interactions between its individual constituents.
That the sins of the London Stock Exchange are less than those of Wall Street may be due, not so much to differences in national character, as to the fact that to the average Englishman Throgmorton Street is, compared with Wall Street to the average American, inaccessible and very expensive.
. . . a frequent opportunity to the individual . . . to revise his commitments.It is as though a farmer, having tapped his barometer after breakfast, could decide to remove his capital from the farming business between 10 and 11 in the morning and reconsider whether he should return to it later in the week.
It might have been supposed that competition between expert professionals, possessing judgment and knowledge beyond that of the average private investor, would correct the vagaries of the ignorant
individual left to himself. It happens, however, that the energies and skill of the professional investor and speculator are mainly occupied otherwise. For most of these persons are, in fact, largely concerned, not
with making superior long - term forecasts of the probable yield of an investment over its whole life, but with foreseeing changes in the conventional basis of valuation a short time ahead of the general public.
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