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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: shades who wrote (67083)	7/30/2006 12:34:42 PM
From: Moominoid	Respond to of 110194

As long as there are long equity only mutual funds and small investors put their money in them through 401k etc. plans or in taxable accounts when the market is hot (and pull it at the bottom again) there will be uninformed traders to prey on. This I have been saying for a long time. The average mutual fund investor apparently only makes 3% p.a. Some of what MF managers do is value motivated but a lot is putting money in and out to meet net redemptions of fund units. The article also claims that many MF and HF managers are really uninformed but got lucky and opened a fund. I am happy to admit that I am still a fledgling trader. But I am not a futile trader. I have learned, my returns and alpha have increased over time. Over time I made about as much as the index. At first I made less and now more. A learning curve. Mostly on the longer term investing side. Trading initially lost money for me. Now I admit it is breaking even. But I am trying to learn from the mistakes and develop systems. Hopefully, I soon graduate to technical trader :) My losses in trading in recent times were due to lack of discipline rather than making initially bad trades. Mastering the psychology I hope is the final step.

To: shades who wrote (67083)	7/30/2006 2:48:10 PM
From: Moominoid	Respond to of 110194

The more I think about it the more it is exactly like an ecosystem. Plants = long term investors active and passive - they introduce the real productivity to the system. Though they are continuously nibbled on and suffer from diseases they endure. Animals = traders - don't introduce any productivity just live off the plants but they help structure the ecosystem and give oppotunities for some plants to prosper that otherwise would not by eating their competitors. Herbivores = unskilled traders - they all end up getting eaten. Carnivores = skilled fundamental and technical traders - profit from the unskilled traders. Scavengers/parasites - the hyenas, vultures, and fungi and pathogens. These are the sophisticated traders - the market makers, arbitrageurs etc. They survive off lots of little bits dropped and left behind by the carnivores and by infecting the animals. There are lots of chick and cub carnivores trying to make it and not all survive to adulthood.