Financial Crisis

[Naam]

-i don't aim for 20%+ returns but am satisfied if overall yield of my portfolio matches the inflation rate of my expenditure (which differs from the official rate). as my income/expenditure ratio is ~5:1 i consider that yield satisfactory.

side note: the rat race to make money has become for me quite boring in recent years. on the other hand i admit that life without that rat race would be rather boring too.

I inferred this conclusion before - eventually, beyond a certain point - it does become boring (for most - megalomaniacs aside)...

With income/expenditure at ~5:1 I say head for the door with a fistful of dollars in one hand and a fistful of blue pills in the other ! (wife stays home with own fistful of dollars as appeasement..... )

in reality it's the other way round. wife heads for the door with a fistful of dollars in each hand, catches a flight to SIN, HKG, FRA or LHR and i stay [rather happily] at home. only when she utters severe threats and announces serious consequences i am accompanying her and spend (like last week) 6 boring days in KUL.

[Naam]

The corp. Bond market is much slower than the equity market.

Trading costs are much higher.

Sure you get income from the coupons, but only if you hold, as one does with many equity issues. So if for example your buying Venezuelan corporates and selling them a month later its a null point, bar the larger transaction costs on FI. Naturally a longer term income seeker would likely prefer the slower capital volatility of Bonds.

A default/bankruptcy changes things, but I try not to get long those companies in any way.

quite obviously you never bought a bond Badge by the way, my trading cost buying stocks is 0.85%, buying bonds is 0.15%. where's the beef?

[midas]

Interaction between Neil Cavuto and Ron Blackwell, AFL-CIO Chief Economist on live television yesterday

talking about the merits of another stimulus package :-

Ron Blackwell: Why don't you let me finish my thought.

Neil Cavuto: You never answer a basic question.

Ron Blackwell: I'm answering you right now.

Neil Cavuto: Why will spending work?

Ron Blackwell: These programs created jobs but not net creation. we lost more jobs because of the recession than were created by these programs.

Neil Cavuto: Wait a minute, Ron, you're the chief economist there. Where did you get your degree? A baking school? Where are you cooking up these numbers?

Ron Blackwell: Oh that's an insult. You're a joker. You're an asshol_e.

And then I remembered this joke :-

A mathematician, an accountant and an economist apply for the same job.

The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."

Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."

Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?

Edited July 4, 2010 by midas

[Abrak]

You are a Marxist you said way back in this thread.

Well, when I said I was a Marxist, I meant that my investment strategy was largely based on the Marxist analysis of risk and my philosophy is inherently dialectic (Hegel/Marx). So to some extent, Marx believed that say capitalism which by its nature put wealth in the hands of the few which will move from being productive to anti-productive and ultimately be replaced. If you pursue a particular policy of self interest it will eventually end up as a policy that works against your interests. This could apply to regulation, deregulation, globalisation, a pegged Chinese US$ exchange rate etc.

One of two things must be true. Either the Democrats are unfathomable idiots, who ignorantly pursue ever more destructive policies despite decades of contrary evidence, or they understand the consequences of their actions and relentlessly carry on anyway because they somehow benefit."

So entrenched political and economic philosophies will inevitably become destructive in the end (communism being one of the best examples.) I also believe that individuals are inherently fairly smart (4 million years of evolution of excessively big brains should justify that) while Governments tend to be inherently stupid (the problem of aggregation again- not a great Marxist concept.) It is also why I am not a great believer in conspiracy theories because I essentially dont think Governments are competent enough to create one. A good example of dialectics is the Chinese currency peg to the US$, which essentially has moved from being mutually constructive, to mutually destructive which will eventually lead to change.

Einstein said (a good way to start a sentence, people anticipate something deep, intelligent and meaningful) that 'We can't solve problems by using the same kind of thinking we used when we created them.'

Now as a quote it is more likely you would see that as 'common sense' rather than 'intelligence.' However, if I think about what irritates people most in this thread is that Government's have essentially tried to solve underlying problems using the same kind of thinking that created it them.

Finally, a Marxist analysis of risk would suggest that the most productive way forward is to reduce global imbalances. I am not talking about the rich and the poor but for surplus countries to reduce their surpluses which would result in deficit countries reducing their deficits. And the point about dialectics is that if you think that reducing deficits, which reduces surpluses is the same answer to the same question you are wrong.

And the major difference between Marx and Goldman Sachs on capitalism, is that GS believes that ruthlessly pursuing self interest ends up with everyone getting a new plane while Marx thought they would end up getting shot. Now the question over who is right here is debatable on the basis the GS employees did all get new planes but in the meantime they destroyed the banking system they were trying to create. So the likes of 12D would probably have preferred to have them all shot.

Edited July 4, 2010 by Abrak

[Abrak]

.....

Edited July 4, 2010 by Abrak

[midas]

You are a Marxist you said way back in this thread.

Well, when I said I was a Marxist, I meant that my investment strategy was largely based on the Marxist analysis of risk and my philosophy is inherently dialectic (Hegel/Marx). So to some extent, Marx believed that say capitalism which by its nature put wealth in the hands of the few which will move from being productive to anti-productive and ultimately be replaced. If you pursue a particular policy of self interest it will eventually end up as a policy that works against your interests. This could apply to regulation, deregulation, globalisation, a pegged Chinese US$ exchange rate etc.

One of two things must be true. Either the Democrats are unfathomable idiots, who ignorantly pursue ever more destructive policies despite decades of contrary evidence, or they understand the consequences of their actions and relentlessly carry on anyway because they somehow benefit."

So entrenched political and economic philosophies will inevitably become destructive in the end (communism being one of the best examples.) I also believe that individuals are inherently fairly smart (4 million years of evolution of excessively big brains should justify that) while Governments tend to be inherently stupid (the problem of aggregation again- not a great Marxist concept.) It is also why I am not a great believer in conspiracy theories because I essentially dont think Governments are competent enough to create one. A good example of dialectics is the Chinese currency peg to the US$, which essentially has moved from being mutually constructive, to mutually destructive which will eventually lead to change.

Einstein said (a good way to start a sentence, people anticipate something deep, intelligent and meaningful) that 'We can't solve problems by using the same kind of thinking we used when we created them.'

Now as a quote it is more likely you would see that as 'common sense' rather than 'intelligence.' However, if I think about what irritates people most in this thread is that Government's have essentially tried to solve underlying problems using the same kind of thinking that created it them.

Finally, a Marxist analysis of risk would suggest that the most productive way forward is to reduce global imbalances. I am not talking about the rich and the poor but for surplus countries to reduce their surpluses which would result in deficit countries reducing their deficits. And the point about dialectics is that if you think that reducing deficits, which reduces surpluses is the same answer to the same question you are wrong.

And the major difference between Marx and Goldman Sachs on capitalism, is that GS believes that ruthlessly pursuing self interest ends up with everyone getting a new plane while Marx thought they would end up getting shot. Now the question over who is right here is debatable on the basis the GS employees did all get new planes but in the meantime they destroyed the banking system they were trying to create. So the likes of 12D would probably have preferred to have them all shot.

Maybe you are confusing my real concern about Obama’s real intentions and what he and his “ Adminisration “ have the power to do if they do have ulterior motives and it would be too late to worry about such things after the event ( e.g shutting down the internet ) ? Just look at his popularity ratings that have plummeted. He doesnt seem to me like someone who is even remotely worried about losing in 2012.

You may be referring to the incompetence of Governments soley regarding economic policies but surely you don’t have to be competent to simultaneously have “ evil “ intentions – for example the Governments that suddenly effectively “ imprisoned “ people inside their own countries e.g. Cuba, North Korea, USSR, Eritrea, East Berlin? You cannot say Obamas Government is any less competent than those that there were in power when suddenly all the people in these countries lost their human rights?

As a Marxist surely you must also admit some of us have come to associate Marxist ideology with a potential scary side to Governments that dont believe in human rights? Do you believe that to be able to administer a government based on Marxist principles that it is correct for peoples human rights, or “ freedom “ to be curtailed or limited in any way ?

Of course it easy to dismiss so many things today as just being another “ conspiracy theory “ but the inescapable fact about the close friends and associates of Barrack Obama is they have held a strong belief in communism for decades now and have equally shared the belief that their time would eventually come ( eg. Bill Ayers, Andy Stern,Valerie Jarrett, "Van" Jones etc ). Barack Obama himself was linked to the Hawaiian Communist Party network through his boyhood/teenage mentor Frank Marshall Davis.

I think by now it is abundantly clear that there is something seriously wrong with Barack Obama and his entire administration and yes it may be incompetent but the real question thst more US citizens should be asking when they read the list below ( and think about such issues as wanting to shut down the internet ) is could it be even remotely possible Obama is part of a group that have not so good intentions in the long run ?

This list has about 70 questions that have never been asked in the MSM about the Commander in Chief of the worlds biggest economy - i wonder why that is ?

Who is Barack Obama? The scariest list of facts about President Obama you've ever seen... The President who HATES America

http://www.fourwinds10.com/siterun_data/government/obama_government/news.php?q=1271959942

Edited July 4, 2010 by midas

[Abrak]

The corp. Bond market is much slower than the equity market.

Trading costs are much higher.

Sure you get income from the coupons, but only if you hold, as one does with many equity issues. So if for example your buying Venezuelan corporates and selling them a month later its a null point, bar the larger transaction costs on FI. Naturally a longer term income seeker would likely prefer the slower capital volatility of Bonds.

A default/bankruptcy changes things, but I try not to get long those companies in any way.

quite obviously you never bought a bond Badge by the way, my trading cost buying stocks is 0.85%, buying bonds is 0.15%. where's the beef?

And your trading cost for buying stocks clearly shows you have never bought stocks before. My trading costs (commission and tax but not including the spread) in Thailand is 0.11% to 0.15%. My trading costs with my private bank in stocks is 0.25% to 0.5%.

[midas]

But it is high time the governments got to grips with this issue. But they won't, because it is easier to do very little and just keep on hoping for the best.

Well you have to give Cameron some credit for trying - although I dont whether they

will let him get away with this ?!

Cameron orders Ministers to draw up 40 per cent spending cuts - the biggest in history

Read more: http://www.dailymail.co.uk/news/article-1291837/Cameron-orders-Ministers-draw-40-cent-spending-cuts--biggest-history.html#ixzz0sldvnDeW

[Abrak]

As a Marxist surely you must also admit some of us have come to associate Marxist ideology with a potential scary side to Governments that dont believe in human rights? Do you believe that to be able to administer a government based on Marxist principles that it is correct for peoples human rights, or “ freedom “ to be curtailed or limited in any way ?

I certainly dont share Marx's political ideologies. I for instance see no conflict between Marx and my belief that it is wise and healthy to become exceptionally wealthy. I dont happen to know of any Governments based on Marxist principles but I am sure it would be disastrous.

Of course it easy to dismiss so many things today as just being another “ conspiracy theory “ but the inescapable fact about the close friends and associates of Barrack Obama is they have held a strong belief in communism for decades now and have equally shared the belief that their time would eventually come ( eg. Bill Ayers, Andy Stern,Valerie Jarrett, "Van" Jones etc ). Barack Obama himself was linked to the Hawaiian Communist Party network through his boyhood/teenage mentor Frank Marshall Davis.

I think by now it is abundantly clear that there is something seriously wrong with Barack Obama and his entire administration and yes it may be incompetent but the real question thst more US citizens should be asking when they read the list below ( and think about such issues as wanting to shut down the internet ) is could it be even remotely possible Obama is part of a group that have not so good intentions in the long run ?

I do believe that Obama may be suffering from a mild mental disorder but I dont think he is a communist.

[midas]

As a Marxist surely you must also admit some of us have come to associate Marxist ideology with a potential scary side to Governments that dont believe in human rights? Do you believe that to be able to administer a government based on Marxist principles that it is correct for peoples human rights, or “ freedom “ to be curtailed or limited in any way ?

I certainly dont share Marx's political ideologies. I for instance see no conflict between Marx and my belief that it is wise and healthy to become exceptionally wealthy. I dont happen to know of any Governments based on Marxist principles but I am sure it would be disastrous.

But what about these ?

" Following World War II, Marxist ideology, often with Soviet military backing, spawned a rise in revolutionary communist parties all over the world. Some of these parties were eventually able to gain power, and establish their own version of a Marxist state. Such nations included the People's Republic of China, Vietnam, Romania, East Germany, Albania, Poland, Cambodia, Ethiopia, South Yemen, Yugoslavia, and others. In some cases, these nations did not get along. The most notable examples were rifts that occurred between the Soviet Union and China, as well as Soviet Union and Yugoslavia (in 1948), whose leaders disagreed on certain elements of Marxism and how it should be implemented into society."

Of course it easy to dismiss so many things today as just being another “ conspiracy theory “ but the inescapable fact about the close friends and associates of Barrack Obama is they have held a strong belief in communism for decades now and have equally shared the belief that their time would eventually come ( eg. Bill Ayers, Andy Stern,Valerie Jarrett, "Van" Jones etc ). Barack Obama himself was linked to the Hawaiian Communist Party network through his boyhood/teenage mentor Frank Marshall Davis.

I think by now it is abundantly clear that there is something seriously wrong with Barack Obama and his entire administration and yes it may be incompetent but the real question thst more US citizens should be asking when they read the list below ( and think about such issues as wanting to shut down the internet ) is could it be even remotely possible Obama is part of a group that have not so good intentions in the long run ?

I do believe that Obama may be suffering from a mild mental disorder but I dont think he is a communist.

I really wish you were right and I was wrong but to me the evidence based on :-

( a ) his background

( b ) his friends and associates at the White House

( c ) the policies he is implementing -Policies virtually identical to these were implemented by:

Vladimir Ilyich Lenin in 1917 Russia

Josip Broz Tito in 1945 Yugoslavia

Mao Zedong (Tse-tung) in 1949 China

Fidel Castro in 1959 Cuba

Hugo Chavez in 1999 Venezuela

it all seems like irrefutable evidence to me that he is a Communist.

There comes a time when people in USA have to say " hang on a minute "

all these things together should ring some bells

http://hubpages.com/hub/Top-7-Marxist-Communist-Policies-Being-Implemented-By-Obama-Today

Consider the words of Russian Prime Minister and former KGB agent Vladimir Putin, who should certainly understand the essence of communism:

" Interference of the State, the belief in the omnipotence of the State: that is a reaction to market failures. There is a temptation to expand direct interference of state in economy. In the Soviet Union that became an absolute. We paid a very dear price for that."

Edited July 4, 2010 by midas

[Abrak]

Look Marx had a lot of ideas. Many were pretty crap. And I dont know much about those countries you mention.

But it does all sound along the lines of Bernanke will go down in history as a lousy property broker.

The first guy I worked with was a brilliant derivatives trader (and Marxist) and virtually invented and dominated the derivatives market in Bangkok for several years. Even back in 1993 he predicted these would be a route cause of a global financial crisis. Marx would probably be a hedge fund manager in the modern era. Admittedly this guy did eventually end up in jail though.

[badge]

The corp. Bond market is much slower than the equity market.

Trading costs are much higher.

Sure you get income from the coupons, but only if you hold, as one does with many equity issues. So if for example your buying Venezuelan corporates and selling them a month later its a null point, bar the larger transaction costs on FI. Naturally a longer term income seeker would likely prefer the slower capital volatility of Bonds.

A default/bankruptcy changes things, but I try not to get long those companies in any way.

quite obviously you never bought a bond Badge by the way, my trading cost buying stocks is 0.85%, buying bonds is 0.15%. where's the beef?

And your trading cost for buying stocks clearly shows you have never bought stocks before. My trading costs (commission and tax but not including the spread) in Thailand is 0.11% to 0.15%. My trading costs with my private bank in stocks is 0.25% to 0.5%.

Ignoring the other rather more obvious points inferred, such as spread, I pay min 10GBP max 25GBP, any size, on DMA LSE shares. So 0.0001% on $250k.

Edited July 4, 2010 by badge

[ronz28]

Texas AG Candidate Sues Goldman et al For Causing "Recession, Unemployment" Financial Crisis, etc.

http://www.zerohedge.com/article/texas-ag-candidate-sues-goldman-et-al-causing-recession-unemployment-and-everything-else-tha

[Naam]

Ignoring the other rather more obvious points inferred, such as spread, I pay min 10GBP max 25GBP, any size, on DMA LSE shares. So 0.0001% on $250k.

you are talking shares, i am talking bonds. my opinion is that those who buy shares are speculators and those who buy bonds are investors :jap: but then... opinions are like àrseholes, everybody got one

[midas]

Texas AG Candidate Sues Goldman et al For Causing "Recession, Unemployment" Financial Crisis, etc.

http://www.zerohedge.com/article/texas-ag-candidate-sues-goldman-et-al-causing-recession-unemployment-and-everything-else-tha

Brilliant ! I hope they can go after the Directors as well and sue the pants off off Blankfein.

[Naam]

Texas AG Candidate Sues Goldman et al For Causing "Recession, Unemployment" Financial Crisis, etc.

http://www.zerohedge.com/article/texas-ag-candidate-sues-goldman-et-al-causing-recession-unemployment-and-everything-else-tha

Brilliant ! I hope they can go after the Directors as well and sue the pants off off Blankfein.

even though that law suit seems to be justified the result will be (unfortunately!) less than the effect of a lukewarm fart in the middle of a hurricane cat5.

[midas]

Texas AG Candidate Sues Goldman et al For Causing "Recession, Unemployment" Financial Crisis, etc.

http://www.zerohedge.com/article/texas-ag-candidate-sues-goldman-et-al-causing-recession-unemployment-and-everything-else-tha

Brilliant ! I hope they can go after the Directors as well and sue the pants off off Blankfein.

even though that law suit seems to be justified the result will be (unfortunately!) less than the effect of a lukewarm fart in the middle of a hurricane cat5.

Maybe and maybe not but it would be sure fun if EVERYONE files a lawsuit against them till they are rendered BANKRUPT.

[Gambles]

However, the downturn and been so sharp that many price movements were fairly indiscriminate. Maybe a hedge fund had to sell stock etc.. The same happens in very sharp upswings. Prices of certain stocks literally disconnect with their fundamentals. So if a stock is trading at half net cash per share, it is say, very hard to say it isnt cheap (unless it is bleeding cash.)

So, from my perspective, it wasnt so much at matter of calling the bottom of the market but simply that there were loads of investments that were bound to come right with a bit of patience. It is a harrowing time though I bought a stock on a PE of 3x only to find it was trading on 2x a week later. Also, in terms of hindsight, it doesnt bother me if I sell something and it doubles but it does when I fail to spot value. I find the current markets incredibly difficult and actually very 'risky'.

Agreed - but then over a year later and the quality stocks haven't been the ones that most benefitted so it remains an impossible macro situation to read with any confidence...some things appear inevitable (rise of gold, appreciation of Asian currencies, de-linking of surplus and deficit economies, sovereign bond weakness) but I said in January that in all of these cases I wouldn't be surprised to see gold, Asian currencies (relative to US$) and EM equities weaken before appreciating and US$ and sovereign debt appreciate before weakening...it's not clear to me where we are in this process and that's what makes the markets so hard to read right now......it may be therefore that each asset actually requires a different strategy - with gold average into gold equities, with Asian currencies just try to rotate from now to Asian bias and accept that the timing will be neccessarily imperfect but the theme is ultimately valid, with equities take a long short/hedged approach and with sovereign debt there's a valid case for relative value plays as the various global debt crises move inexorably

This is where traders can come into their own and exploit these situations knowing the risks which is why nickels and bulldozers are so fascinating right now but I would generally assert that from my perspective I'd prefer to cover this off with limited allocations to managed futures and global macro managers

These are fascinating times and there is money to be made but there are exreme risks and when markets are so hard to read, always, always, alwasy make sure that your back is covered,,,,,

[Gambles]

that might apply to Abrak and a bunch of others but not to me Honourable Sir Gambles, Esq. as i am not talking about a stupid stock casino but about subordinated bonds which traded at or above par 12 months before spring 2009 but could be picked up at a fraction of their "fair" and former prices for several months (mar-aug 2009). a bond that traded at par when (as mentioned above) the sun was shining that could be picked up at 12 or 15 (or even below 10!) can hardly be called a "falling knife".

for an approach like yours I agree but it was still a falling knife. There were bargains in pretty much all corporate debt and in Feb '09 in The Bangkok Post, The Nation and on Money Channel, Scott highlighted corporate debt, gold and emerging equities as the main areas of upcoming value but it would be re-writing history to say that the valuation triggers made the bottom evident - an example that we used at the time of how difficult it was to pick the bottom is that if an asset falls 80% in value and you buy it and it ultimately ends up falling 90% you bought somewhere 'near' the bottom but you still ended up overpaying 2:1 compared to the actual bottom...in addition the biggest value was in the areas where you had to be the most concerned about corporate failures.....getting in at anything remotely approaching value should be considered success just as exiting again at the right time is....the general subordinated/perp markets look best exited right now

[Naam]

"the general subordinated/perp markets look best exited right now"

basically i agree but admit that i still hold three subs (average yield in € 9+%), with (in my view) strong fundamentals and good market liquidity.

[badge]

<BR>

<BR>Ignoring the other rather more obvious points inferred, such as spread, <B>I pay min 10GBP max 25GBP, any size, on DMA LSE shares. So 0.0001% on $250k.</B><BR>

<BR>you are talking shares, i am talking bonds. my opinion is that those who buy shares are speculators and those who buy bonds are investors  <IMG class=bbc_emoticon alt=:jap: src="http://static.thaivisa.com/forum/public/style_emoticons/default/jap.gif"> but then... opinions are like àrseholes, everybody got one  <IMG class=bbc_emoticon alt= src="http://static.thaivisa.com/forum/public/style_emoticons/default/tongue.gif"><BR>

<BR><BR><BR><BR>Indeed. <BR><BR>Call it whatever makes you happy.   <BR><BR>Seeing as you brought up share commissions, I was replying to both yourself, and Abrak.<BR><BR><BR><BR><BR>

<BR>

quite obviously you never bought a bond Badge  <IMG class=bbc_emoticon alt= src="http://static.thaivisa.com/forum/public/style_emoticons/default/tongue.gif">  by the way, my trading cost buying stocks is 0.85%, buying bonds is 0.15%. where's the beef?  <IMG class=bbc_emoticon alt= src="http://static.thaivisa.com/forum/public/style_emoticons/default/huh.gif"><BR>

<BR>And your trading cost for buying stocks clearly shows you have never bought stocks before. My trading costs (commission and tax but not including the spread) in Thailand is 0.11% to 0.15%. My trading costs with my private bank in stocks is 0.25% to 0.5%.<BR>

[Gambles]

"details please Gambles. we all like heroes.

just economic? or generally?

performance 2007, 2008 and 2009 > "it was their portfolios that I was referring to..."

sorry about that - It's best to read through the pdf and see the picture in totality, warts and all ,Osmium-Iridium-Portfolio-Final.pdf but for the headlines the average of the base currency performance of Martin Gray as a manager(to May 09)/The Osmium unitised portfolio (since June 09) in Sterling base class and the average of the 3 separate core Iridium portfolios under Scott Campbell's guidance 2007 to date is as follows:

2007 14.6%

2008 -2.9%

2009 5.9%

2010 YTD +1.6%

Edited July 5, 2010 by Gambles

[Gambles]

Ahaaa.... now I know why you dont like equities. It is not because of the volatility and uncertainty of the fundamentals but because of the volatility and uncertainty of the price relative to the fundamentals.

Very interesting point - this and Badge's point below

Lots of people 'called the low' in 2008/09.Lots of people advocated; 'dip[ing] his toes into specific equities' , or 'accumulating select companies' in 2008/09 etc...the financial market equivalent of aquarium gravel.

re: sentiment/technicals. I pity anyone who does not see the use of any form of price graphs in financial markets; theyre a silent, unemotional snapshot, of a very noisy and emotionally charged market place. Understanding this mindset sees myself surrounded by the good and the great in trading circles; peripheral commentators need not apply. The term 'technicals' applies to much more than simple price graphs or moving averages or oscillators etc in my vocab.Sentiment will always follow fundamentals, and vice versa. However, as mentioned just yesterday I think, the disconnect between being able to identify the 'lag-time' or;even just forseeing these opportunities, and actually capitalising from them, is impossible for most.

I think that we all know about the market's ability to remain irrational for as long as it dam_n well pleases. To me (and I'm expecting to be shot down here by Badge & co) the longer term the investment horizon the greater the value of fundamentals, the shorter term the trading horizon, the greater the value of technicals. Pragmatic asset allocation should be open to both but in both cases there's a whole lot of hokum floating around and the last couple of years have tended to cause yours truly to retreat deeper into my shell of being far more selective about who my heroes are. I have no doubt that good traders made 100% returns in 2009 and many will have avoided the worst excesses of '08. Good luck to them. These are the conditioins where the best performances will come from the best traders and IMHO the worst perfromances will come from the worst traders and the most reliable consistent delivery of return while providing protection for invested capital will come from pragmatic asset allocation. To me this question is all about understanding the value that you genuinely have at risk and matching that and your horizons. At the end of the day however you dress it up, managed futures are really computerised traders and we're open enough to MF as an asset class.

I'm not saying it well but IMHO - based on my experience rather than on any great received theory- fundamentals should provide strategic allocation, technicals should provide tactical allocations but, as I'm increasingly realizing, largely thanks to the excellent tutelage of Naam, Abrak and Badge, each to their own.....

[Gambles]

You are a Marxist you said way back in this thread.

Well, when I said I was a Marxist, I meant that my investment strategy was largely based on the Marxist analysis of risk and my philosophy is inherently dialectic (Hegel/Marx). So to some extent, Marx believed that say capitalism which by its nature put wealth in the hands of the few which will move from being productive to anti-productive and ultimately be replaced. If you pursue a particular policy of self interest it will eventually end up as a policy that works against your interests. This could apply to regulation, deregulation, globalisation, a pegged Chinese US$ exchange rate etc.

One of two things must be true. Either the Democrats are unfathomable idiots, who ignorantly pursue ever more destructive policies despite decades of contrary evidence, or they understand the consequences of their actions and relentlessly carry on anyway because they somehow benefit."

So entrenched political and economic philosophies will inevitably become destructive in the end (communism being one of the best examples.) I also believe that individuals are inherently fairly smart (4 million years of evolution of excessively big brains should justify that) while Governments tend to be inherently stupid (the problem of aggregation again- not a great Marxist concept.) It is also why I am not a great believer in conspiracy theories because I essentially dont think Governments are competent enough to create one. A good example of dialectics is the Chinese currency peg to the US$, which essentially has moved from being mutually constructive, to mutually destructive which will eventually lead to change.

Einstein said (a good way to start a sentence, people anticipate something deep, intelligent and meaningful) that 'We can't solve problems by using the same kind of thinking we used when we created them.'

Now as a quote it is more likely you would see that as 'common sense' rather than 'intelligence.' However, if I think about what irritates people most in this thread is that Government's have essentially tried to solve underlying problems using the same kind of thinking that created it them.

Finally, a Marxist analysis of risk would suggest that the most productive way forward is to reduce global imbalances. I am not talking about the rich and the poor but for surplus countries to reduce their surpluses which would result in deficit countries reducing their deficits. And the point about dialectics is that if you think that reducing deficits, which reduces surpluses is the same answer to the same question you are wrong.

And the major difference between Marx and Goldman Sachs on capitalism, is that GS believes that ruthlessly pursuing self interest ends up with everyone getting a new plane while Marx thought they would end up getting shot. Now the question over who is right here is debatable on the basis the GS employees did all get new planes but in the meantime they destroyed the banking system they were trying to create. So the likes of 12D would probably have preferred to have them all shot.

Interesting....

I believe that Marx (and therefore Popper and Soros) had a much better understanding of capitalism than GS does. It was just communism where Marx was way off course. Ironically, GS will ultimately probably do far more, unwittingly, to damage capitalism than Herr Naam's compatriot...

[Gambles]

we all have our stories

i lost 2 times - dot com and the FC

then made it all back on one share

plus lots up upside to come

now looking at how to keep it (shhhhhhh)

Now that I have a single idea lodged in my brain - it occurs to me that that's another good way at looking at technical trading versus fundamental investing - making money versus keeping it.............

more arrows from the traders headed my way and probably from the fundamentalists as well this time too!

[BlackJack]

I see a woman in the USA won the Lotto 4 times now

is this luck or a punt or planned?

its relevant as it shows what kind of financial punters we are.

[Gambles]

But it is high time the governments got to grips with this issue. But they won't, because it is easier to do very little and just keep on hoping for the best.

Well you have to give Cameron some credit for trying - although I dont whether they

will let him get away with this ?!

Cameron orders Ministers to draw up 40 per cent spending cuts - the biggest in history

Read more: http://www.dailymail...l#ixzz0sldvnDeW

I thought that giving credit was the cause of all this??????????

[midas]

I certainly dont share Marx's political ideologies. I for instance see no conflict between Marx and my belief that it is wise and healthy to become exceptionally wealthy. I dont happen to know of any Governments based on Marxist principles but I am sure it would be disastrous.

But surely that may not be YOUR decision and I would never have faith

that your somewhat Utopian vision of Marxism would work the way you would like it to be ?

To me based on the experience in countries i listed earlier, there

seems a real conflict in believing a government that

starts applying Marxist principles would necessarily allow you to even think

of " becoming exceptionally wealthy " ?

You could never tell this to too many people or the next thing you could risk ending up

in some Gulag

Edited July 5, 2010 by midas

[Gambles]

"the general subordinated/perp markets look best exited right now"

basically i agree but admit that i still hold three subs (average yield in € 9+%), with (in my view) strong fundamentals and good market liquidity.

yes, for sure there will be exceptions but fewer and further between as time goes by - 3 probably sounds right!!

[Abrak]

Ignoring the other rather more obvious points inferred, such as spread, I pay min 10GBP max 25GBP, any size, on DMA LSE shares. So 0.0001% on $250k.

Well Badge I hope you are doing your own dealing and not letting them deal for you.

Because, if not, if they can convince you that GBP25 on a US$250k transaction is 0.0001%, when it is 0.01%, then they might be screwing you on the price too.