Monday, 29 February 2016

Sunday, 28 February 2016

Aiming for the Right Target in Trading

By Walter T. Downs

When trading goes right, it can be a great feeling. When trading goes wrong it can be a nightmare. Fortunes are made in a matter of weeks and lost in a matter of minutes. This pattern repeats itself as each new generation of traders hit the market. They hurl themselves out of the night like insane insects against some sort of karmic bug-light; all thought and all existence extinguished in one final cosmic "zzzzzzt". Obviously, for a trader to be successful he must acknowledge this pattern and then break it. This can be accomplished by asking the right questions and finding the correct answers by rational observation and logical conclusion.

This article will attempt to address one question: "What is the difference between a winning trader and a losing trader?"


What follows are eleven observations and conclusions that I use in my own trading to help keep me on the right track. You can put these ideas into table form, and use them as a template to determine the probability of a trader being successful.

OBSERVATION # 1
The greatest number of losing traders is found in the short-term and intra-day ranks. This has less to do with the time frame and more to do with the fact that many of these traders lack proper preparation and a well thought-out game plan. By trading in the time frame most unforgiving of even minute error and most vulnerable to floor manipulation and general costs of trading, losses due to lack of knowledge and lack of preparedness are exponential. These traders are often under-capitalized as well. Winning traders often trade in mid-term to long-term time frames. Often they carry greater initial levels of equity as well.

CONCLUSION:
Trading in mid-term and long-term time frames offers greater probability of success from a statistical point of view. The same can be said for level of capitalization. The greater the initial equity, the greater the probability of survival.

OBSERVATION # 2
Losing traders often use complex systems or methodologies or rely entirely on outside recommendations from gurus or black boxes. Winning traders often use very simple techniques. Invariably they use either a highly modified version of an existing technique or else they have invented their own.

CONCLUSION:
This seems to fit in with the mistaken belief that "complex" is synonymous with "better". Such is not necessarily the case. Logically one could argue that simplistic market approaches tend to be more practical and less prone to false interpretation. In truth, even the terms "simple" or "complex" have no relevance. All that really matters is what makes money and what doesn't. From the observations, we might also conclude that maintaining a major stake in the trading process via our own thoughts and analyses is important to being successful as a trader. This may also explain why a trader who possesses no other qualities than patience and persistence often outperforms those with advanced education, superior intellect or even true genius.

OBSERVATION # 3
Losing traders often rely heavily on computer-generated systems and indicators. They do not take the time to study the mathematical construction of such tools nor do they consider variable usage other than the most popular interpretation. Winning traders often take advantage of the use of computers because of their speed in analyzing large amounts of data and many markets. However, they also tend to be accomplished chartists who are quite happy to sit down with a paper chart, a pencil, protractor and calculator. Very often you will find that they have taken the time to learn the actual mathematical construction of averages and oscillators and can construct them manually if need be. They have taken the time to understand the mechanics of market machinery right down to the last nut and bolt.

CONCLUSION:
If you want to be successful at anything, you need to have a strong understanding of the tools involved. Using a hammer to drive a nut in to a threaded hole might work, but it isn't pretty or practical.

OBSERVATION # 4
Losing traders spend a great deal of time forecasting where the market will be tomorrow. Winning traders spend most of their time thinking about how traders will react to what the market is doing now, and they plan their strategy accordingly.

CONCLUSION:
Success of a trade is much more likely to occur if a trader can predict what type of crowd reaction a particular market event will incur. Being able to respond to irrational buying or selling with a rational and well thought out plan of attack will always increase your probability of success. It can also be concluded that being a successful trader is easier than being a successful analyst since analysts must in effect forecast ultimate outcome and project ultimate profit. If one were to ask a successful trader where he thought a particular market was going to be tomorrow, the most likely response would be a shrug of the shoulders and a simple comment that he would follow the market wherever it wanted to go. By the time we have reached the end of our observations and conclusions, what may have seemed like a rather inane response may be reconsidered as a very prescient view of the market.

OBSERVATION # 5
Losing traders focus on winning trades and high percentages of winners. Winning traders focus on losing trades, solid returns and good risk to reward ratios.

CONCLUSION:
The observation implies that it is much more important to focus on overall risk versus overall profit, rather than "wins" or "losses". The successful trader focuses on possible money gained versus possible money lost, and cares little about the mental highs and lows associated with being "right" or "wrong".

OBSERVATION # 6
Losing traders often fail to acknowledge and control their emotive processes during a trade. Winning traders acknowledge their emotions and then examine the market. If the state of the market has not changed, the emotion is ignored. If the state of the market has changed, the emotion has relevance and the trade is exited.

CONCLUSION:
If a trader enters or exits a trade based purely on emotion then his market approach is neither practical nor rational. Strangely, much damage can also be done if the trader ignores his emotions. In extreme cases this can cause physical illness due to psychological stress. In addition, valuable subconscious trading skills that the trader possesses but has no conscious awareness of may be lost. It is best to acknowledge each emotion as it is experienced and to view the market at these points to see if the original reasons we took the trade are still present. Further proof that this conclusion may have validity can be seen in even highly systematic traders exiting a trade for no apparent reason, and pegging a profitable move almost to the tick. Commonly, this is referred to as being "lucky" or being "in the zone".

OBSERVATION # 7
Losing traders care a great deal about being right. They love the adrenaline and endorphins rushes that trading can produce. They must be in touch with the markets almost twenty-four hours a day. A friend of mine once joked that a new trader won't enter a room unless there is a quote machine in it. Winning traders recognize the emotions but do not let it become a governing factor in the trading process. They may go days without looking at a quote screen. To them, trading is a business. They don't care about being right. They focus on what makes money and what doesn't. They enjoy the intellectual challenge of finding the best odds in the game. If those odds aren't present they don't play.

CONCLUSION:
It is important to stay in synch with the markets, but it is also important to have a life outside of trading. It is a rare individual who can do anything to excess without suffering some form of psychological or physical degradation. Successful traders keep active enough to stay sharp but also realize that it is a business not an addiction.

OBSERVATION # 8
When a losing trader has a bad trade he goes out and buys a new book or system, and then he starts over again from scratch. When winning traders have a bad trade they spend time figuring out what happened and then they adjust their current methodology to account for this possibility next time. They do not switch to new systems or methodologies lightly, and only do so when the market has made it very clear that the old approach is no longer valid. In fact, the best traders often use methodologies that are endemic to basic market structure and will therefore always be a part of the markets they trade. Thus the possibility of the market changing form to the extent that the approach becomes useless, is very small.

CONCLUSION:
The most successful traders have a methodology or system that they use in a very consistent manner. Often, this revolves around one or two techniques and market approaches that have proven profitable for them in the past. Even a bad plan that is used consistently will fair better than jumping from system to system. This observation implies that stylistic foundations of a trader's market approach must be in place before consistent profitability can occur.

OBSERVATION # 9
Losing traders focus on "big-name" traders who made a killing, and they try to emulate the trader's technique. Winning traders monitor new techniques that come on the trading scene, but remain unaffected unless some part of that technique is valuable to them within the framework of their current market approach. They often spend much more time looking at how the market seeks and destroys other traders or how traders destroy themselves. They then trade with the market or against other traders as these situations arise.

CONCLUSION:
Once again, we can note that the individuality of a trader and his comfort level and knowledge regarding his system are far more important than the latest doodad or Market guru.

OBSERVATION #10
Losing traders often fail to include many factors in the overall trading process that affects the probabilities of overall profit. Winning traders understand that winning in the markets means "cash flow". More cash must come in than goes out, and anything that effects this should be considered. Thus a winning trader is just as thrilled with a new way to reduce his data-feed costs or commissions as he is with a new trading system.

CONCLUSION:
ANYTHING that affects bottom line profitability should be considered as a viable area of study to improve performance.

OBSERVATION #11
Losing traders often take themselves quite seriously and seldom find humour in market analysis or the trading environment. Successful traders are often the funniest and most imaginative people you will ever meet. They take joy in trading and are the first to laugh or relate a funny story. They take trading seriously, but they are always the first to laugh at themselves.

CONCLUSION:
Its no wonder that one of the first things psychiatrists test for when treating a patient is whether or not the patient has any sense of humor about his affliction. The more serious the tone of the individual, the more likely that insanity has set in.

SUMMARY OF CONCLUSIONS AND OBSERVATIONS

Both winning and losing traders consider trading a game. However, winning traders take the game not as a diversion but as a vocation which they practice with an intensity and dedication that rivals the work ethic of a professional athlete. Since the athletic metaphor seems appropriate, I will sum up on that note.

If trading were a game like basketball perhaps novice traders would realize more readily that what appears as effortless ease of the professional trader in sinking three-point shots is in fact the product of endless hours spent shooting hoops in deserted back yards and empty playgrounds. As in sports, the governing factors are internal and external. We deal with the market and ourselves. Both are like weapons and they can be used pro-actively or destructively. Each and every trade should be taken with professional care and planning In order to bring these observations home in an even more compelling form, lets add an element of ultimate risk to life and limb and say that our "sport" is more like target practice with a handgun. While it is certainly important to hit the target, it is more important to make sure the gun isn't pointed directly at ourselves when we pull the trigger.

Minute differences in how we take aim in the markets can have amazing impact on the final outcome. The difference is clear: One method is accurate target practice. The other is Russian Roulette.

Walter Downs is a professional trader and market consultant. He is president of CIS Trading Cos., a firm dedicated to the research and development of innovative market techniques. Source: http://www.dacharts.com/

Quote for the day

"Accept what is, let go of what was, and have faith in what will be." - Sonia Ricotti

Saturday, 27 February 2016

18 Life Changing Lessons to Learn from Socrates

By Luminita D.Saviuc

If I have learned something from Socrates is that you cannot teach people anything; you can only make them think. You can only draw out of them the wisdom which is latent within them. And by doing so, you help open their eyes, making them realize that they were born with wings and that they can fly, as high as they want to fly…

Anyway, I gathered what I thought to be some of Socrates best quotes and compiled them into 18 life changing lessons that you might want to learn. 


Here they are:

1. True wisdom is in knowing you know nothing.


“I am the wisest man alive, for I know one thing, and that is that I know nothing.” ~ Socrates

“To know, is to know that you know nothing. That is the meaning of true knowledge.” ~ Socrates

“I know that I am intelligent, because I know that I know nothing.” ~ Socrates

“True wisdom comes to each of us when we realize how little we understand about life, ourselves, and the world around us.” ~ Socrates

2. Be as you wish to seem.

“The shortest and surest way to live with honour in the world, is to be in reality what we would appear to be; and if we observe, we shall find, that all human virtues increase and strengthen themselves by the practice of them.” ~ Socrates

3. Nothing changes until you do.


“Let him that would move the world first move himself.” ~ Socrates

“Remember that there is nothing stable in human affairs; therefore avoid undue elation in prosperity, or undue depression in adversity.” ~ Socrates

4. Virtue is not given by money, but that from virtue comes money and every other good of man, public as well as private.

“I do nothing but go about persuading you all, old and young alike, not to take thought for your persons or your properties, but and chiefly to care about the greatest improvement of the soul. I tell you that virtue is not given by money, but that from virtue comes money and every other good of man, public as well as private. This is my teaching, and if this is the doctrine which corrupts the youth, I am a mischievous person.” ~ Socrates
5. Employ your time in improving yourself by other men’s writings.

“Employ your time in improving yourself by other men’s writings so that you shall gain easily what others have laboured hard for.” ~ Socrates

6. Those who realize that they have enough, are truly rich.


“He is richest who is content with the least, for content is the wealth of nature.” ~ Socrates

“Contentment is natural wealth, luxury is artificial poverty.” ~ Socrates

7. Thou shouldst eat to live; not live to eat.

“Worthless people live only to eat and drink; people of worth eat and drink only to live.” ~ Socrates

8. Not life, but good life, is to be chiefly valued.


“The unexamined life is not worth living.” ~ Socrates

“The really important thing is not to live, but to live well. And to live well meant, along with more enjoyable things in life, to live according to your principles.” ~ Socrates

9. Everything in life changes, nothing ever stays the same.

“If you don’t get what you want, you suffer; if you get what you don’t want, you suffer; even when you get exactly what you want, you still suffer because you can’t hold on to it forever. Your mind is your predicament. It wants to be free of change. Free of pain, free of the obligations of life and death. But change is law and no amount of pretending will alter that reality.” ~ Socrates

10. Being busy is not enough. It’s what are you busy with that counts.


“Beware the barrenness of a busy life.” ~ Socrates

11. God knows best what is good for us.


“Our prayers should be for blessings in general, for God knows best what is good for us.” ~ Socrates

12. Don’t confine yourself to certain parts of the world, explore it all.


“I am not an Athenian or a Greek, but a citizen of the world.” ~ Socrates

13. Don’t let other people do your thinking for you.

“To find yourself, think for yourself.” ~ Socrates

14. Don’t rush into friendships.

“Be slow to fall into friendship, but when you are in, continue firm and constant.” ― Socrates

15. Be impeccable with your word.


“False words are not only evil in themselves, but they infect the soul with evil.” ~ Socrates

16. Never return evil for evil. You will hurt yourself in the process.


“One who is injured ought not to return the injury, for on no account can it be right to do an injustice; and it is not right to return an injury, or to do evil to any man, however much we have suffered from him.” ~ Socrates

“The end of life is to be like God, and the soul following God will be like Him.” ~ Socrates

17. All men’s souls are immortal.

“All men’s souls are immortal, but the souls of the righteous are immortal and divine.” ~ Socrates

18. Never stop wondering.

“Wonder is the beginning of wisdom.” ~ Socrates

BONUS

“The easiest and noblest way is not to be crushing others, but to be improving yourselves. ” ~ Socrates

“No man has the right to be an amateur in the matter of physical training. It is a shame for a man to grow old without seeing the beauty and strength of which his body is capable.” ~ Socrates

“If you want to be a good saddler, saddle the worst horse; for if you can tame one, you can tame all.” ~ Socrates

“In all of us, even in good men, there is a lawless wild-beast nature, which peers out in sleep.” ~ Socrates

Source: http://www.purposefairy.com/

Quote for the day

“A trading philosophy is something that cannot just be transferred from one person to another, it's something that you have to acquire yourself through time and effort.” -  Richard Driehaus

Friday, 26 February 2016

Colombo Stock Exchange Trade Summary 26-Feb-2016

Quote for the day

"Wisdom equals knowledge plus courage. You have to not only know what to do and when to do it, but you have to also be brave enough to follow through." - Jarod Kintz

Thursday, 25 February 2016

Colombo Stock Exchange Trade Summary 25-Feb-2016

Quote for the day

“Market students are continually diverted from making true evaluations of securities and commodities because they study the statistics made by prices instead of the psychology of prices.” - Burton Pugh

Wednesday, 24 February 2016

Colombo Stock Exchange Trade Summary 24-Feb-2016

Quote for the day

“For true success ask yourself these four questions: Why? Why not? Why not me? Why not now?”– James Allen

Tuesday, 23 February 2016

Colombo Stock Exchange Trade Summary 23-Feb-2016

Quote for the day

"I believe success is defined by the lives we touch. Success can be measured by the impact we make toward building a better world, and doing our part to inspire those around us to achieve greatness."  - Lisa Besserman,

Monday, 22 February 2016

Cicero’s 146 (43 B.C) of the Roman empire wrote a philosophy that is still valid?

1. "The Poor: Work & work."

2. "The Rich: Exploit the poor."

3. "The Soldier: Protects both."

4. "The Tax Payer: Pays for all the three."

5. "The Wanderer: Rests for all the four."

6. "The Drunk: Drinks for all the five."

7. "The Banker: Robs all the six."

8. "The Lawyer: Misleads all the seven."

9. "The Doctor: Kills all the eight."

10. "The Undertaker: Buries all the nine."

11. "The Politician: Lives happily on account of all the ten."
Source: https://dilettantee.wordpress.com

How We Create Our Trading Karma

Mistakes are not a problem in trading.

The problem is repeated mistakes.

We repeat mistakes when we don't learn.

We don't learn if we don't review and reflect.

We look for the next trade, but fail to thoroughly evaluate the last one.

We don't want to miss the next move, so we miss learning about the last one.

And we repeat mistakes.

For better or worse, we create our trading karma.
Sourc: www.traderfeed.blogspot.com/

Quote for the day

“From financial history and from my own experience, I long ago concluded that regression to the mean is the most powerful law in financial physics: Periods of above-average performance are inevitably followed by below-average returns, and bad times inevitably set the stage for surprisingly good performance.” – Jason Zwieg

Sunday, 21 February 2016

11 Important Things from Howard Marks

By Ben Carlson

“The markets are a classroom where lessons are taught every day. The keys to investment success lie in observing and learning.”
– Howard Marks

I just finished The Most Important Thing by legendary investor Howard Marks of Oaktree Capital. Marks is one of the greatest value investors of all-time and the book cover even comes with the seal of approval from the Oracle of Omaha himself which reads:

“This is that rarity, a useful book.” – Warren Buffet

Marks actually touches on a number of important things, so let's dive right into some of the best stuff from this great book.

1. It's hard to do the right thing as an investor. But it's impossible to consistently to the right thing at the right time.
Think market timing and rebalancing here. It's impossible to consistently jump in and out of the market at the perfect time, which many investors think they can do with the benefit of hindsight. And when rebalancing from your winners to your losers most of the time you will probably be early, but that's how it works when investing in an uncertain future. You can't expect to call the tops and bottoms in the markets perfectly. No one can.

2. When priced fairly, riskier investments should entail: higher expected returns, the possibility of lower returns and in some cases the possibility of losses.
Many investors don't understand the relationship between risk and reward for risky investments. Stocks don't always perform in line with their historical averages. The can lose money or have long periods of underperformance. But they are still your best bet at building wealth in the long-term.

3. Investing concerns exactly one thing: dealing with the future. Yet it's clearly impossible to “know” anything about the future. This is the conundrum investors are constantly grappling with. We would love to be able to predict the future but it's not gonna happen. This causes us to look for forecasts that mesh with our current outlook. It's much better to have a historical construct and see where we stand at the present.

4. Risk control is the best route to loss avoidance. Risk avoidance, on the other hand, is likely to lead to return avoidance as well. There are many ways to control risk: diversification, rebalancing, having a long time horizon, thinking globally, asset allocation, etc. But completely avoiding risk means you will subject yourself to lower returns and earnings on your money. It's all about balancing your risk tolerance with your stated goals.

5. The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological.
Just about every investor has access to the same information these days. If anything we now have too much information to sift through. What matters is how you choose to react to the fire hose of data and opinions that are always coming at you. You also need to have a consistent process with your research and always seek out opinions that differ from your own to keep yourself honest.

6. Every once and a while, someone makes a risky bet on an improbable or uncertain outcome and ends up looking like a genius. But we should recognize that it happened because of luck and boldness, not skill. This has to do with Michael Mauboussin's paradox of skill. In an activity such as investing, where skill has continued to improved throughout the years, luck becomes much more important in shaping the results. Don't let a lucky bet fool you into believing you or anyone else can consistently win the lottery by investing in longshots.

7. In both economic forecasting and investment management, it's worth noting that there's usually someone who gets it exactly right…but it’s rarely the same person twice. Along the same lines as no. 6, perma-bears are continuously forecasting a crash while perma-bulls always call for ever-higher markets. Eventually both will be right but that doesn't make them prescient. Wait long enough and any prediction can come true. The question is – how long do you have to wait for them to be right?

8. In the world of investing…nothing is as dependable as cycles. Fundamentals, psychology, prices and returns will rise and fall, presenting opportunities to make mistakes or to profit from the mistakes of others. They are givens.
Human nature moves the markets to places they shouldn't fundamentally go. Greed moves them higher and fear moves them lower. And it will always be this way.

9. When others are unworried, we should be cautious; when investors are panicked, we should turn aggressive.
You can take advantage of the human nature of investors by keeping a cool head. Buying into falling markets and selling into rising markets is the only way to buy low, sell high. Since it goes against everything your greedy and fearful mind is telling you, make it automatic and rebalance periodically.

10. Economies and markets cycle up and down. Whichever direction they're going at the moment, most people come to believe that they'll go that way forever. This thinking is a source of great danger since it poisons the markets, sends valuations to extremes, and ignites bubbles and panics that most investors find hard to resist. It's easy to get caught up in rising or falling markets. Everyone is happy when markets are rising. They're all making money. It's hard to believe that the good times could ever end. Remember, this time is never different. What goes up, must come down (and vice versa). Mean reversion is a powerful force of nature.

11. When there's nothing particularly clever to do, the potential pitfall lies in insisting on being clever. Doing nothing is one of the best things that an investor can do 99% of the time. Have your goals changed? Have your circumstances changed? Has your willingness and ability to take risk changed? Has your time horizon changed? If the answer is no, don't do anything and follow your investment plan.

Simple, but not easy.

Source: http://awealthofcommonsense.com/

Quote for the day

“The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.” – Warren Buffett

Saturday, 20 February 2016

The Bandwagon Theory: A Glimpse at how the Market really works

Imagine a bandwagon that is rolling forward at a quickened pace. 

Music that is very pleasing to the ear is being played from speakers on each side of this bandwagon, and a few people currently on the back of the wagon are partying, having the time of their lives. 

The music, loud and clear, starts to attract many other onlookers that happen to be idly standing on the sidelines. 

These onlookers, unable to resist the sweet sounds being played, run to join the party that seems to be going on. 

Progressively, more and more onlookers jump on the back of this bandwagon, and those few who were initially enjoying the first phase of the party begin to leave. 

As the crowd of new party animals on this bandwagon grows larger, the bandwagon finds it harder and harder to move forward at the same pace. 

It slows, enabling more and more late onlookers, witnessing the great fun, the chance to jump on. The crowd grows even larger.

Larger and larger this crowd grows, until the bandwagon, heavily laden with the bodies of drunken party animals, can no longer move forward.

It finally comes to a complete stop. Now that the bandwagon is at a complete standstill, more people jump on. And why not? At this point, joining the fun is easy. 

Absolutely no work is required, for individuals wanting to join the crowd no longer have to run to jump on board. 

But the nature of the bandwagon is to move forward. 

Its motionless state is unnatural, and therefore cannot last. It tries to move forward again, but can't. 

The crowd, piled on back, is much too large. It must free itself of the heavy burden. And it does. 

It quickly shifts into reverse, and jolts backward, knocking a few of the party animals off the back. 

The music stops. 

Puzzled faces from the crowd begin to emerge. 

Before anyone figures out what's going on, another backward jerk takes place, only this one is more violent. 

Another large group of people gets thrown off the back. Now, reality sets in. 

The fun has turned into a nightmare of epic proportions, and panic begins to run rampant. 

Some decide to jump to their deaths. 

Another thrust backwards sends an even larger group of drunken, off-balance people, hurling to the muddy ground. 

It doesn't stop. 

The jolts backward continue, each successive one more violent than the last. 

At this point, only a few die-hard wagon dwellers are holding on, their very lives hanging in the balance by a very thin thread. 

Failing to be completely free, the bandwagon angrily puts the pedal to the metal, and this final thrust backward is so vicious that its front wheels lift high off the ground, momentarily suspending the wagon in a perpendicular position. 

The last of the hangers-on crash to the ground, broken and maimed to no end. 

At this point, a new group of onlookers emerge from the nearby woods. They are clean and serene. 

Each movement they make is deliberate and powerfully energetic, for they did not take part in the tragedy that just transpired. 

Or did they? A few of the dejected souls lying on the ground take a closer look, a look that reveals something very interesting. 

This seemingly new group is not new at all. It is the same group that was seen quietly exiting the party before it came to its violent end. 

An even closer examination by a few more beaten-down onlookers reveals something even more stunning. 

This group not only exited the party early, they were the originators of it! “My God,” someone exclaims.

Paralysed, and unable to move freely, all these dejected souls can do is watch, as the masters of the game go to work, again. 

No sooner does the bandwagon's wheels hit the ground than this professional platoon bolts for the wagon. In a flash they are on board. 

Easy. 

The bandwagon, now free of the larger crowd, can move forward freely and gracefully, comfortably carrying the more astute group with it. 

Its pace quickens, and before long a smooth elegant stride is in place. 

After a few miles of uninterrupted movement, someone from this masterful group flips on a switch, and suddenly the loud sounds of entertaining music start again.

Someone yells, “OK everyone. Here they come. Let’s do it again.” 

Within moments, those who were the former victims of the backward crash become interested again. The music almost calling them from the grave.

And once more, the never-ending cycle repeats.

Source: http://www.dacharts.com/

All of the World’s Stock Exchanges by Size

Courtesy of: The Money Project

Quote for the day

“Even the intelligent investor is likely to need considerable will power to keep from following the crowd.” – Benjamin Graham

Friday, 19 February 2016

Colombo Stock Exchange Trade Summary 19-Feb-2016

Quote for the day

“When you think about the quality of people's lives, it starts with what meaning we give things. Two people can have the same exact experience, and one person thinks the game is over while one thinks the game has begun. And that is the thing that makes a difference... it's not what happens to them as we all know.” - Tony Robbins

Thursday, 18 February 2016

Colombo Stock Exchange Trade Summary 18-Feb-2016

Quote for the day

“It's very hard to find a pure fundamentalist who's also a very successful macro trader.” - Paul Tudor Jones

Wednesday, 17 February 2016

Tuesday, 16 February 2016

Colombo Stock Exchange Trade Summary 16-Feb-2016

Quote for the day

“We are in the business of making mistakes. The only difference between the winners and the losers is that the winners make small mistakes, while the losers make big mistakes.” -  Ned Davis

Monday, 15 February 2016

Sunday, 14 February 2016

Bull Markets vs. Bear Markets

By Ben Carlson

Early in my career I received a very simple, yet powerful piece of advice about the markets:

In a bull market you're not as smart as you think you are and in a bear market you’re not as dumb as you think you are.

The problem is that fear and greed don't always allow us to come to these conclusions in the moment — we tend to default to the opposite.

As markets continue to fall this year many investors are likely beginning to question their own intelligence just as people in 2013-14 were feeling pretty good about how brilliant they were in a rising market. Along these same lines, here’s a quick comparison of some of the different feelings and perspectives investors have depending on which kind of market we happen to be in:


Bull Markets: Fear of missing out.
Bear Markets: Fear of being in.

Bull Markets: Everything I buy is going up — I'm a genius.
Bear Markets: Everything I buy is going down — I'm an idiot.

Bull Markets: See, fundamentals always win out.
Bear Markets: See, technical and sentiment rule the markets.

Bull Markets: I knew I should have had more of my portfolio in stocks.
Bear Markets: I knew I should have had more of my portfolio in bonds.

Bull Markets: That guy's been calling for a crash for years — he's an idiot.
Bear Markets: That guy just called the crash — he's a genius.

Bull Markets: I want to be a long-term buy and hold investor.
Bear Markets: I want to be a short-term trader.

Bull Markets: I'm glad I was buying during the last market crash.
Bear Markets: Never try to catch a falling knife.

Bull Markets: I'll sit tight when the market falls.
Bear Markets: Dear Lord, get me out of stocks NOW!

Bull Markets: Time to buy stocks?
Bear Markets: Time to sell stocks?

Bull Markets: Warren Buffett is washed up.
Bear Markets: Wait, Buffett is buying here?

Bull Markets: Buy & hold works.
Bear Markets: Buy & hold is dead.

Bull Markets: I'll be greedy when other are fearful.
Bear Markets: I lied — I'm fearful when other are fearful.

Bull Markets: Buy the dip.
Bear Markets: Sell the rip.

Bull Markets: Why didn't I invest earlier in my life?
Bear Markets: I'll never invest again.

Bull Markets: Why would I want to diversify?
Bear Markets: Why was I so concentrated?

Bull Markets: I'm just waiting for a healthy correction to put more money to work.
Bear Markets: This market action is not healthy at all.

Bull Markets: Don't worry, we'll outperform during the next downturn.
Bear Markets: Don't worry, we'll outperform when the market turns around.

Bull Markets: It feels like markets will never fall again.
Bear Markets: It feels like markets will never rise again.
Source: http://awealthofcommonsense.com/

Quote for the day

“Nothing is withheld from us which we have conceived to do.” -  Russell Kirsch

Saturday, 13 February 2016

15 Things to Give Up If You Want to Be Happy

1. Give up your need to always be right.
"Would I rather be right, or would I rather be kind?" — Wayne Dyer
2. Give up your need for control.
"By letting it go, it all gets done. The world is won by those who let it go. When you try & try, the world is beyond winning." — Lao Tzu
3. Give up on blaming others.
"A man can fail many times, but he isn’t a failure until he begins to blame somebody else." — John Burroughs
4. Give up your self-defeating self-talk.
"The mind is a superb instrument if used rightly. Used wrongly, however, it becomes very destructive." — Eckhart Tolle
5. Give up your limiting beliefs.
"A belief is not an idea held by the mind; it is an idea that holds the mind." — Elly Roselle
6. Give up complaining.
"You can complain because roses have thorns, or you can rejoice because thorns have roses." — Ziggy
7. Give up the luxury of criticism.
"Spend so much time improving yourself that you have no time left to criticize others." — Christian D. Larsen
8. Give up your need to impress others.
"Don’t try to impress others. Let them have the fun of impressing you." — James R. Fisher, Jr.
9. Give up your resistance to change.
"Follow your bliss and the universe will open doors for you where there were only walls." — Joseph Campbell
10. Give up labels.
"The highest form of ignorance is when you reject something you don’t know anything about." — Wayne Dyer
11. Give up on your fears.
"The only thing we have to fear is fear itself." — Franklin Delano Roosevelt
12. Give up your excuses.
"99% of failures come from people who have the habit of making excuses." — George Washington Carver
13. Give up the past.
"Forget the mistakes of the past and press on to the greater achievements of the future." — Christian D. Larsen
14. Give up attachment.
"The wise individual doesn't get too attached to any of life's pleasures, knowing that wonderful science is hard at work proving it’s bad for him." — Bill Vaughan
15. Give up living your life to other people’s expectations.
"The world is a mirror and reflects back your expectations. What you get is what you see. You create your own reality." — Denis Waitley
Source: http://infographicaday.com/

Quote for the day

“Diligence is the mother of good luck.” - Benjamin Franklin

Friday, 12 February 2016

Colombo Stock Exchange Trade Summary 12-Feb-2016

Global Gold Demand Trend In 2015

The World Gold Council today (11/02/2016) releases its Gold Demand Trends Full Year 2015 report, which is the leading industry resource for data and opinion on global gold demand. Our quarterly publication examines demand trends by sector as well as geography. The Full Year report looks at patterns of demand for the fourth quarter of 2015, as well as across the entire year.

The key findings from 2015 are as follows:

  • Global gold demand in 2015 was virtually flat compared to 2014 at 4,212 tonnes. Gold demand in Q4 showed further positive signs, following a strong third quarter. In India both the investment (60t) and jewellery (173t) sectors were up 6%, boosted by the festival season. In China, which has witnessed economic turmoil, consumer uncertainty and currency weakness, gold demand held up well, particularly in the investment sector up 25% to 48t for the quarter.
  • Global investment demand for the full year 2015 grew by 8% to 878t from 815t in 2014. Bar and coin demand remained steady in 2015 as investors took advantage of a weaker price in Q3. The ETF market saw a slowdown in outflows: 133t in 2015, compared to 185t in 2014. Q4 2015 witnessed a continuation of this trend with a number of key regions experiencing double digit growth.
  • Overall jewellery demand for the full year 2015 was down 3% to 2,415t from 2,481t in the previous year. Following a slower start to the year, the third and fourth quarters combined produced the strongest second half-year total for gold jewellery in 11 years. Q4 2015, saw steady levels of jewellery demand, at 671t compared to 677t in the same period last year, with retailers reporting an increase in sales around the Indian festival period.
  • Central Bank demand for the full year 2015 saw a small uptick from 584t in 2014 to 588t in 2015 as the need for further diversification was reinforced by a tumbling oil price and reduced confidence in the global economy. Demand in Q4 continued to be strong, up 25% to 167t from 134t in Q4 2014, making this the 20thconsecutive quarter of net purchasing.

In addition, below you can see the GDT FY 2015 infographic, summarizing the report’s key findings.

Source: http://www.valuewalk.com/

Quote for the day

“The secret of getting ahead is getting started. The secret of getting started is breaking your complex, overwhelming tasks into smaller manageable tasks, and then starting on the first one.” - Mark Twain

Thursday, 11 February 2016

Colombo Stock Exchange Trade Summary 11-Feb-2016


Quote for the day

“You have to learn how to lose; it is more important than learning how to win. If you think you are always going to be a winner, when you lose, you will develop feelings of hostility and end up blaming the market instead of trying to learn why you lost.” - Mark Weinstein

Wednesday, 10 February 2016

Colombo Stock Exchange Trade Summary 10-Feb-2016

Quote for the day

“I like to compare markets to natural events... markets are living, breathing organisms. You have to adjust with them and continually change your methods.” - Marty Schwartz

Monday, 8 February 2016

Colombo Stock Exchange Trade Summary 08-Feb-2016


Quote for the day

"Walk with the dreamers, the believers, the courageous, the cheerful, the planners, the doers, the successful people with their heads in the clouds and their feet on the ground. Let their spirit ignite a fire within you to leave this world better than when you found it."
- Wilferd A. Peterson

Sunday, 7 February 2016

The 12 Commandments of Success

Here are W. Randall Jones’s 12 Commandments of Wealth. They are really 12 rules for success.

They are worth teaching to your children and following yourself.

1. Never seek money for money’s sake.

2. Find your perfect pitch. Discover your talent.

3. Be your own boss.

4. Get addicted to ambition.

5. Be early. Show up on time.

6. Don’t just set goals. Execute them.

7. Failure is not fatal.

8. Location doesn’t matter.

9. Moor yourself to morals.

10. Say yes to sales.

11. Borrow from the best.

12. Never retire.

Excerpted from The Richest Man in Town By W. Randall Jones

Quote for the day

“You will run out of money before a guru runs out of indicators.” - Neil Weintraub

The 50 richest people on earth

By Samantha Lee/Business Insider

The wealthiest 50 people in the world control a staggering portion of the world economy: $1.46 trillion — more than the annual GDP of Australia, Spain, or Mexico.

That's according to new data provided to Business Insider by Wealth-X, which conducts research on the super-wealthy. Wealth-X maintains a database of dossiers on more than 110,000 ultra-high-net-worth people, using a proprietary valuation model that takes into account each person's assets, then adjusts estimated net worth to account for currency-exchange rates, local taxes, savings rates, investment performance, and other factors.

Its latest ranking of the world's billionaires found that 29 of the top 50 hail from the US and nearly a quarter made their fortunes in tech. To crack this list, you'd need to have a net worth of at least $14.3 billion. And for the most part these people weren't born with a silver spoon. More than two-thirds are completely self-made, having built some of the most powerful companies, including Amazon, Berkshire Hathaway, Google, Nike, and Oracle.

From tech moguls and retail giants to heirs and heiresses, here are the billionaires with the deepest pockets around the globe.

50. TIE: Aliko Dangote




Net worth: $14.3 billion

Age: 58

Country: Nigeria

Industry: Diversified investments

Source of wealth: Self-made; Dangote Group

Saturday, 6 February 2016

22 Things Happy People Do Differently


Quote for the day

"In the absence of clearly-defined goals, we become strangely loyal to performing daily trivia until ultimately we become enslaved by it." - Robert Heinlein

Friday, 5 February 2016

Thursday, 4 February 2016

It's not your fault that you are losing - 17 Biases that explain why traders make mistakes

The human brain is a fascinating machine. It allows us to do many things simultaneously without having to think about doing them. You can drive a car, have a conversation about a complex topic on the phone, eating a sandwich, observing your daughter on the back seat, while all your inner organs and body mechanisms do their thing; this all happens effortlessly and humans wouldn’t be able to consciously control what is going on anyways.

This is only possible because our brain uses shortcuts to process data and information automatically. Unfortunately, those shortcuts don’t always work in our advantage and especially trading and investing require a different skill set and way of thinking.

The automation of thinking and making decisions is done through psychological biases or heuristics. We compiled a list of the 17 most common biases and heuristics and show how they influence trading decisions.

“This is the essence of intuitive heuristics: when faced with a difficult question, we often answer an easier one instead, usually without noticing the substitution.” – Kahnemann

Source: http://www.tradeciety.com/

Quote for the day

“Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.” - Dale Carnegie

Wednesday, 3 February 2016

Colombo Stock Exchange Trade Summary 03-Feb-2016

Quote for the day

“When things are going well and prices are high, investors rush to buy, forgetting all prudence. Then when there’s chaos all around and assets are on the bargain counter, they lose all willingness to bear risk and rush to sell. And it will ever be so.” – Howard Marks

Tuesday, 2 February 2016

Colombo Stock Exchange Trade Summary 02-Feb-2016


Quote for the day

“To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.” – Benjamin Graham