Afin's trading diary
- Thread starter afin
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Thanks 
Moving from a discretionary system to a mechanical system was the best decision made. With a discretionary system I never had peace of mind & have realized that I can never scale up properly to the level I intended to. I will go on record and say that when I was a discretionary trader I was always highly stressed and it extracted a lot of heavy toll on my internal physiology and health.
I am not a Shaktimaan bhai Can't be a multi tasker and wear multiple hats at the same time. I need to focus on one thing at a time and do what I can best.
Not here to win a popularity contest with my views and please everyone. It is their issue if it pisses them off
Moving from a discretionary system to a mechanical system was the best decision made. With a discretionary system I never had peace of mind & have realized that I can never scale up properly to the level I intended to. I will go on record and say that when I was a discretionary trader I was always highly stressed and it extracted a lot of heavy toll on my internal physiology and health.I am not a Shaktimaan bhai
Can't be a multi tasker and wear multiple hats at the same time. I need to focus on one thing at a time and do what I can best. Not here to win a popularity contest with my views and please everyone. It is their issue if it pisses them off
Thanks Moving from a discretionary system to a mechanical system was the best decision made. With a discretionary system I never had peace of mind & have realized that I can never scale up properly to the level I intended to. I will go on record and say that when I was a discretionary trader I was always highly stressed and it extracted a lot of heavy toll on my internal physiology and health.
I am not a Shaktimaan bhai Can't be a multi tasker and wear multiple hats at the same time. I need to focus on one thing at a time and do what I can best.
Not here to win a popularity contest with my views and please everyone. It is their issue if it pisses them off
Moving from a discretionary system to a mechanical system was the best decision made. With a discretionary system I never had peace of mind & have realized that I can never scale up properly to the level I intended to. I will go on record and say that when I was a discretionary trader I was always highly stressed and it extracted a lot of heavy toll on my internal physiology and health.I am not a Shaktimaan bhai
Can't be a multi tasker and wear multiple hats at the same time. I need to focus on one thing at a time and do what I can best.Not here to win a popularity contest with my views and please everyone. It is their issue if it pisses them off
1) buying options
2) trading intraday.
personally for me .... in this journey .... still long way to go. i am not sure anymore if i am even in the path.
Thanks for your good words. It has been through a lot of trial and error and only after a very painful process that I had finally arrived and zeroed in on a mechanical only system of my liking.
It hasn't been an easy process for me. I lost a lot of money but most importantly it was my peace of mind that got affected, to such an extent that it took an extremely heavy toll on my overall health and wellbeing (emotional well-being) also.
And then due to a pressing medical concern, I took a somewhat long break from my day job - I changed jobs and had a lot of time in between those two. That phase allowed me to introspect deeply over what I was doing wrong and where I was going wrong over the past few years. It then occurred as an epiphany that the answer was in front of me all along but I chose to ignore it all along. It was at that point that I had decided to ruthlessly cut off the sole root cause of my pain center - my discretionary trading mindset and shift completely to a mechanical one. The transition also took a lot of time - it was not as if everything fell into my lap that day and moment itself I had decided to work on which method to use and which instrument after countless hours of manual backtesting to do that.
Experts are like dart throwing monkeys. They perform hardly any better than monkeys in picking stocks that deliver. In fact when it came to those decisions, the monkeys performed far better - they outperformed the market Not my words - a Princeton University Study proved that:
“A BLINDFOLDED monkey throwing darts at a newspaper’s financial pages,” wrote Burton Malkiel in “A Random Walk Down Wall Street”, his 1973 bestseller, “could select a portfolio that would do just as well as one carefully selected by experts”.
PS: let me know if the pages won't open. I had hyperlinked them within the text itself but they can also be behind a paywall.
It hasn't been an easy process for me. I lost a lot of money but most importantly it was my peace of mind that got affected, to such an extent that it took an extremely heavy toll on my overall health and wellbeing (emotional well-being) also.
And then due to a pressing medical concern, I took a somewhat long break from my day job - I changed jobs and had a lot of time in between those two. That phase allowed me to introspect deeply over what I was doing wrong and where I was going wrong over the past few years. It then occurred as an epiphany that the answer was in front of me all along but I chose to ignore it all along. It was at that point that I had decided to ruthlessly cut off the sole root cause of my pain center - my discretionary trading mindset and shift completely to a mechanical one. The transition also took a lot of time - it was not as if everything fell into my lap that day and moment itself
I had decided to work on which method to use and which instrument after countless hours of manual backtesting to do that.Experts are like dart throwing monkeys. They perform hardly any better than monkeys in picking stocks that deliver. In fact when it came to those decisions, the monkeys performed far better - they outperformed the market
Not my words - a Princeton University Study proved that:“A BLINDFOLDED monkey throwing darts at a newspaper’s financial pages,” wrote Burton Malkiel in “A Random Walk Down Wall Street”, his 1973 bestseller, “could select a portfolio that would do just as well as one carefully selected by experts”.
PS: let me know if the pages won't open. I had hyperlinked them within the text itself but they can also be behind a paywall.
Last edited:
The following is the expanded link if in case any of you would want to read the full article.
Blindfolded Monkey Beats Humans With Stock Picks
https://www.wsj.com/articles/SB991681622136214659
For the second straight round, the primate stock picker made a monkey out of his professional and amateur rivals. Though he got the last laugh, the simian investment guru didn't manage to swing into the black. From Nov. 7, 2000, to May 7, 2001, his picks lost an average of 2.7%, dragged down by MediGene AG , a Neuer Markt-listed biotech company that fell 64%. Otherwise, the monkey made money. Canadian Alcan Aluminum Ltd. bought the monkey's original pick, Swiss Alusuisse Group AG , and Alcan rose 40.7%. The French road builder Colas SA climbed 8.5% and Securitas AB, a Swedish security company, rose 4.3%.
The Neuer Markt also put the biggest dent in the amateur's portfolio. On Track Innovations AG , listed on the German growth exchange, fell 50.8%. The other Neuer Markt pick, Qiagen NV, did slightly better, but still lost 34.5%. Philips Electronics NV fell 21.4%, and L'Oreal SA was down 7.7%. On average, the amateurs lost 28.6%.
The pros also fared poorly. British bookseller W.H. Smith rose 15.9%, but the rest of the fund managers' picks were in the red. Losses from the Italian energy company Edison SpA, information-technology-services company RM PLC. and perennial favorite Nokia Corp. combined to give the professional portfolio an average return of -13.4%.
Despite the difficulty of picking winners in bear markets, the show must go on. Four new contestants have agreed to face off against the top two professional and amateur investors from the last round. Hopefully they haven't overlooked the monkey, eager to extend his winning streak to three rounds.
Was it luck or skill? Consider Princeton University economist Burton Malkiel's "efficient markets theory." In his 1973 book, "A Random Walk Down Wall Street," Mr. Malkiel argued that if the market is truly efficient and a share price reflects all factors immediately as soon as they're made public, a blindfolded monkey throwing darts at a newspaper stock listing should do as well as any investment professional.
Every two months we test this theory. Four amateurs, four professionals and the monkey go up against the market, as measured by the Morgan Stanley Capital Index for Europe.
Our two amateur winners took their winning picks into the next round.
Kathy Flynn, a 47-year-old chemist, came out on top last time with L'Oreal. She works for Procter & Gamble Co., which gives her some insight into the French rival.
"They are the No. 1 beauty-care company world-wide, but they aren't resting on their laurels," Ms. Flynn says. "They've made important strategic acquisitions like Maybelline and also in the area of African-American hair care." Though she doesn't own L'Oreal shares, she does own others. She began investing in 1983 through her U.S. retirement plan. There have been some down times, though overall she has done well by investing conservatively. "I remember 1987, so I could have given lessons to all those dot-commers," she says, referring to the U.S. market's plunge that year. L'Oreal shares rose 2.2% on Friday in Paris to close at 78.15 euros ($66.27)
Eurico J. Ferreira Jr., a 34-year-old financial controller, is standing by Philips Electronics despite the stock's recent poor performance. Mr. Ferreira used to work for the company's North American division, and he liked what he saw there. "They've always been extremely efficient at making changes if things aren't going the way they want them to," he says. "The mobile-phone business didn't pick up the way they had expected, so I'm looking for them to spin that off." Philips represents a rare venture into the tech sector for Mr. Ferreira, who says he's generally a risk-averse investor. He may have gotten this from his father, a finance professor. Philips shares rose 1.10 euros, or 3.5% to 33 euros on Monday in Frankfurt. The two newcomers are also betting on a tech recovery.
Stephen Cotterell, a London-based management consultant, selected Psion PLC, a United Kingdom maker of computers and computer operating systems. He's been a fan of the company ever since a friend showed him a Psion computer several years ago. His interest in the company as an investment is more recent. "Someone told me a while ago that you should only invest what you can afford to lose," Mr. Cotterell, 44, says. "I haven't been able to afford to lose until recently."
On April 6 he snapped up some Psion shares, guessing that they'd hit bottom. In addition to the share price, Mr. Cotterell noticed that Nokia plans to use a Psion operating system in 15% of its mobile devices. "Look at all the people using mobile phones and pocket organizers," he says. "I know it's a big debate at the moment, but I fundamentally believe people will be looking for more value-added services from their mobile devices."
Psion shares rose six pence ($0.08 or 10 European cents), or 4.7%, to 134 pence in London on Monday.
Of course, dartboard fans have long pondered how a round would unfold if no one picked Nokia.
Christian Rybka, a 38-year-old Bavarian, made sure that no one will have to worry about the answer yet. He added the Finnish mobile-phone maker to the amateur's portfolio because he thinks it will profit from competitors' missteps. "Nokia has a very strong market position, and they are going to gain some of the customers that Ericsson and others are losing," he says. By November, he expects Nokia to trade at 47 euros.
Overall, he thinks the market is on its way back up. "Mr. Greenspan is doing a good job with the U.S. economy, and we are seeing the effects of this in Europe as well," he says. Mr. Rybka also hopes this will help his software business, RON GmbH, get off to a good start. The professional fund managers are still wary of the tech sector, though. Guy Monson, who won two consecutive rounds with W.H. Smith, switched to BP Amoco PLC. The 38-year-old chief investment officer at Sarasin Investment Management argues that it's the right time to shift into energy, despite the sector's high valuations. "The high oil price we are seeing now is here to stay," he says. "[The Organization of Petroleum Exporting Countries] is more effective now, and the West has neglected its production infrastructure for the past decade."
Mr. Monson says BP Amoco has an attractive valuation, with a price-to-earnings ratio of around 14.5 times 2001 earnings. It should also benefit from falling interest rates, he believes. BP Amoco shares closed at $54.09 (63.83 euros), up 52 U.S. cents on Monday.
Franceso de Astis, a fund manager with San Paolo Asset Management SGR in Milan, picked the Italian financial-services company Credito Emiliano SpA. He isn't confident about the market as a whole, or even individual sectors. Still, Credem is one of the stronger companies he's uncovered.
"Credem remains the asset manager that is growing strongly despite current market scenarios," the 39-year-old Mr. de Astis says. "And it's expected to have the strongest growth among all Italian asset-management companies." Mr. de Astis doesn't expect major changes in the Italian market now that Silvio Berlusconi is back in power. "The Italian market follows the major European markets," he says. Credem shares rose 2.7% to 7.04 euros on Monday in Milan. Andrew Parry, chief investment officer for equities at London's Northern Trust Global Investments Ltd., adds another conservative play to the professional portfolio. It's the Spanish building and services firm Actividades Construccion y Servicios SA, or ACS.
"In the 1990s, the Old Economy players really got squeezed because there was much more demand for things like fiber-optic cable as opposed to more traditional infrastructure," Mr. Parry, 39, says. Now that has changed. According to Mr. Parry, Spain will receive billions of euros in European Union funds to improve its infrastructure. ACS should benefit. ACS shares rose 1.5% to 32.39 euros Monday in Madrid.
Amateurs, professionals and the monkey have now completed three rounds of competition from July 2000 through May 2001. If percentage gains are converted into dartboard points, the monkey has moved into the lead with 13.3 points, followed by the professionals with 4.4 points, and the amateurs with -81.22. The market, as measured by the MSCI Europe, scored -17 points.
Blindfolded Monkey Beats Humans With Stock Picks
https://www.wsj.com/articles/SB991681622136214659
For the second straight round, the primate stock picker made a monkey out of his professional and amateur rivals. Though he got the last laugh, the simian investment guru didn't manage to swing into the black. From Nov. 7, 2000, to May 7, 2001, his picks lost an average of 2.7%, dragged down by MediGene AG , a Neuer Markt-listed biotech company that fell 64%. Otherwise, the monkey made money. Canadian Alcan Aluminum Ltd. bought the monkey's original pick, Swiss Alusuisse Group AG , and Alcan rose 40.7%. The French road builder Colas SA climbed 8.5% and Securitas AB, a Swedish security company, rose 4.3%.
The Neuer Markt also put the biggest dent in the amateur's portfolio. On Track Innovations AG , listed on the German growth exchange, fell 50.8%. The other Neuer Markt pick, Qiagen NV, did slightly better, but still lost 34.5%. Philips Electronics NV fell 21.4%, and L'Oreal SA was down 7.7%. On average, the amateurs lost 28.6%.
The pros also fared poorly. British bookseller W.H. Smith rose 15.9%, but the rest of the fund managers' picks were in the red. Losses from the Italian energy company Edison SpA, information-technology-services company RM PLC. and perennial favorite Nokia Corp. combined to give the professional portfolio an average return of -13.4%.
Despite the difficulty of picking winners in bear markets, the show must go on. Four new contestants have agreed to face off against the top two professional and amateur investors from the last round. Hopefully they haven't overlooked the monkey, eager to extend his winning streak to three rounds.
Was it luck or skill? Consider Princeton University economist Burton Malkiel's "efficient markets theory." In his 1973 book, "A Random Walk Down Wall Street," Mr. Malkiel argued that if the market is truly efficient and a share price reflects all factors immediately as soon as they're made public, a blindfolded monkey throwing darts at a newspaper stock listing should do as well as any investment professional.
Every two months we test this theory. Four amateurs, four professionals and the monkey go up against the market, as measured by the Morgan Stanley Capital Index for Europe.
Our two amateur winners took their winning picks into the next round.
Kathy Flynn, a 47-year-old chemist, came out on top last time with L'Oreal. She works for Procter & Gamble Co., which gives her some insight into the French rival.
"They are the No. 1 beauty-care company world-wide, but they aren't resting on their laurels," Ms. Flynn says. "They've made important strategic acquisitions like Maybelline and also in the area of African-American hair care." Though she doesn't own L'Oreal shares, she does own others. She began investing in 1983 through her U.S. retirement plan. There have been some down times, though overall she has done well by investing conservatively. "I remember 1987, so I could have given lessons to all those dot-commers," she says, referring to the U.S. market's plunge that year. L'Oreal shares rose 2.2% on Friday in Paris to close at 78.15 euros ($66.27)
Eurico J. Ferreira Jr., a 34-year-old financial controller, is standing by Philips Electronics despite the stock's recent poor performance. Mr. Ferreira used to work for the company's North American division, and he liked what he saw there. "They've always been extremely efficient at making changes if things aren't going the way they want them to," he says. "The mobile-phone business didn't pick up the way they had expected, so I'm looking for them to spin that off." Philips represents a rare venture into the tech sector for Mr. Ferreira, who says he's generally a risk-averse investor. He may have gotten this from his father, a finance professor. Philips shares rose 1.10 euros, or 3.5% to 33 euros on Monday in Frankfurt. The two newcomers are also betting on a tech recovery.
Stephen Cotterell, a London-based management consultant, selected Psion PLC, a United Kingdom maker of computers and computer operating systems. He's been a fan of the company ever since a friend showed him a Psion computer several years ago. His interest in the company as an investment is more recent. "Someone told me a while ago that you should only invest what you can afford to lose," Mr. Cotterell, 44, says. "I haven't been able to afford to lose until recently."
On April 6 he snapped up some Psion shares, guessing that they'd hit bottom. In addition to the share price, Mr. Cotterell noticed that Nokia plans to use a Psion operating system in 15% of its mobile devices. "Look at all the people using mobile phones and pocket organizers," he says. "I know it's a big debate at the moment, but I fundamentally believe people will be looking for more value-added services from their mobile devices."
Psion shares rose six pence ($0.08 or 10 European cents), or 4.7%, to 134 pence in London on Monday.
Of course, dartboard fans have long pondered how a round would unfold if no one picked Nokia.
Christian Rybka, a 38-year-old Bavarian, made sure that no one will have to worry about the answer yet. He added the Finnish mobile-phone maker to the amateur's portfolio because he thinks it will profit from competitors' missteps. "Nokia has a very strong market position, and they are going to gain some of the customers that Ericsson and others are losing," he says. By November, he expects Nokia to trade at 47 euros.
Overall, he thinks the market is on its way back up. "Mr. Greenspan is doing a good job with the U.S. economy, and we are seeing the effects of this in Europe as well," he says. Mr. Rybka also hopes this will help his software business, RON GmbH, get off to a good start. The professional fund managers are still wary of the tech sector, though. Guy Monson, who won two consecutive rounds with W.H. Smith, switched to BP Amoco PLC. The 38-year-old chief investment officer at Sarasin Investment Management argues that it's the right time to shift into energy, despite the sector's high valuations. "The high oil price we are seeing now is here to stay," he says. "[The Organization of Petroleum Exporting Countries] is more effective now, and the West has neglected its production infrastructure for the past decade."
Mr. Monson says BP Amoco has an attractive valuation, with a price-to-earnings ratio of around 14.5 times 2001 earnings. It should also benefit from falling interest rates, he believes. BP Amoco shares closed at $54.09 (63.83 euros), up 52 U.S. cents on Monday.
Franceso de Astis, a fund manager with San Paolo Asset Management SGR in Milan, picked the Italian financial-services company Credito Emiliano SpA. He isn't confident about the market as a whole, or even individual sectors. Still, Credem is one of the stronger companies he's uncovered.
"Credem remains the asset manager that is growing strongly despite current market scenarios," the 39-year-old Mr. de Astis says. "And it's expected to have the strongest growth among all Italian asset-management companies." Mr. de Astis doesn't expect major changes in the Italian market now that Silvio Berlusconi is back in power. "The Italian market follows the major European markets," he says. Credem shares rose 2.7% to 7.04 euros on Monday in Milan. Andrew Parry, chief investment officer for equities at London's Northern Trust Global Investments Ltd., adds another conservative play to the professional portfolio. It's the Spanish building and services firm Actividades Construccion y Servicios SA, or ACS.
"In the 1990s, the Old Economy players really got squeezed because there was much more demand for things like fiber-optic cable as opposed to more traditional infrastructure," Mr. Parry, 39, says. Now that has changed. According to Mr. Parry, Spain will receive billions of euros in European Union funds to improve its infrastructure. ACS should benefit. ACS shares rose 1.5% to 32.39 euros Monday in Madrid.
Amateurs, professionals and the monkey have now completed three rounds of competition from July 2000 through May 2001. If percentage gains are converted into dartboard points, the monkey has moved into the lead with 13.3 points, followed by the professionals with 4.4 points, and the amateurs with -81.22. The market, as measured by the MSCI Europe, scored -17 points.
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Absolute rookie mistake made yesterday that had nothing to do with my entries or exits. I was sitting pretty comfortable on an impressive 82% profit made intraday and shut my terminal down. In my over enthusiasm however, I did not cancel the short side orders I had earlier placed. That mistake proved costly and my over all profits got erased and minimized to 15% on capital EOD.
Indian Economy In For A Couple Of ‘Nasty Years’, Warns Fitch Chief Economist
Read more at: https://www.bloombergquint.com/econ...le-of-nasty-years-warns-fitch-chief-economist
Copyright © BloombergQuint
Read more at: https://www.bloombergquint.com/econ...le-of-nasty-years-warns-fitch-chief-economist
Copyright © BloombergQuint
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