Applied Materials No-Politics Thread (AMAT) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Applied Materials No-Politics Thread (AMAT)

AMAT 252.25

+0.9%

Nov 28 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: willcousa who wrote (24648)	10/22/2010 3:53:42 PM
From: Sun Tzu	Read Replies (2) of 25522

I am not saying that program trading makes the market more stable, although if you were to look a 1930 or 1970 +/- 2-years, you can see that the next cycle, 2010 has been more stable. What I said was that quant program trading that is typically market neutral makes the market more stable. Algorithmic position trading that is mostly based on fundamentals makes the market more unstable. As to what environment you should trade in, that is a personal call, but I don't see how you could be beating the market based on trading advice in CNBC or WSJ or the finance and investment books. The reason has nothing to do with the quality of the advice; it has everything to do with the market mechanics and your resources. You simply cannot play the same type of game as bigger players. You are not equipped for it. So do yourself a favor: Get a sheet of paper and write on all your weaknesses and strengths. Then look at what the strengths and weaknesses of the pros are (and they come in several categories). Use this to devise a winning strategy. Here is an example: Your Weaknesses: expensive funding; lack of capital; execution limitations (make sure to write the limits of your execution); inability to sleep at night if holding too big of a position... Your Strengths: Can hold a position as long as you want, even if it is unpopular before quarterly reports; know industry X cold; and most importantly - not limited by a charter (i.e. can go long and short and concentrate in any industry and not limited by market capitalization rules, etc). Mutual Fund Traders' Weaknesses: Has to focus on short terms numbers; has to follow the charter even when it is clearly a mistake; measures self against peers and so will not take bold chances unless desperate; etc.. Mutual Fund Traders' Strengths: Access to a lot of news; dedicated traders; cheaper source of funds; faster execution; can sleep easy at night so long as performs better than peers; etc Hedge Fund Weaknesses: Has to invest in very liquid assets, etc. Hedge Fund Strengths: ... After you've built up your list, play to your strengths in such a way to not expose your weaknesses (i.e. don't use double edged swords). Likely what you will find is that you should keep 80% of your assets in a well balanced stock-bonds-commodities indecies and the other 20% is your "play" money that you will invest in either small stocks that are mostly out of scope of most institutions, or stocks that are very out of favor and you'll keep for an extended period of time, or insanely contrarian positions (like buys BP at its worst), etc. later, ST

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next