What is KJ's problem?

To cater to retail investors, there are essentially two species of sales person.

The first species caters to investors with your view. They will therefore try to sell you some kind of managed product. Behind this will be some kind of superstar trading team/investment managers. Their product brochures will be filled with the kind of serial correlated trading performance to convince you that this will be replicated in the future. This is preferred product to sell because such funds have high management charges and hence give the sales person much higher comissions.

The second species caters to investors who are more cynical after having lost money or seen friends and family who have lost money. To persuade them to invest, they use a mutated form of the EMH to sell ETFs and/or low load funds. To make their pitch more convincing, they will even run down the first species as being "conmen". As the comissions are much lower, the species that preys on such investors will try to make this up by volume. Often they will try to convince investors to invest their life savings in such "safe" "statisically proven" investments.

Between the 2 species, they have caused untold losses to small retail investors hoping to put a little money away for their future and their retirement.

Thick Face Black Heart said:

It seems to be, after all the twists and turns that the EMH has gone thru, that what we need is actually an IMH - Inefficient Markets Hypothesis!

I have always invested on the presumption that there will always be portions of markets that are inefficient on either short or intermediate time horizons.

Most of the financial managers I follow operate on the axiom that markets are inefficient and sometimes hugely inefficient. They have made good money over the decades.

Stock prices (and prices of financial instruments in general) are caused IMO by sentiment and money flow, rather than "information". Information that is the handmaiden of volatility, the real driver is capital flows which are based on a multitude of factors, many of which totally ignore the FACTS.

Should I be sent to Buangkok green for thinking like this???

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So much theory, still such a loser in life, even with your 2-1. You really thought 2-1 is the same as KJ's 2 1s.

aurvandil said:

To cater to retail investors, there are essentially two species of sales person.

The first species caters to investors with your view. They will therefore try to sell you some kind of managed product. Behind this will be some kind of superstar trading team/investment managers. Their product brochures will be filled with the kind of serial correlated trading performance to convince you that this will be replicated in the future. This is preferred product to sell because such funds have high management charges and hence give the sales person much higher comissions.

The second species caters to investors who are more cynical after having lost money or seen friends and family who have lost money. To persuade them to invest, they use a mutated form of the EMH to sell ETFs and/or low load funds. To make their pitch more convincing, they will even run down the first species as being "conmen". As the comissions are much lower, the species that preys on such investors will try to make this up by volume. Often they will try to convince investors to invest their life savings in such "safe" "statisically proven" investments.

Between the 2 species, they have caused untold losses to small retail investors hoping to put a little money away for their future and their retirement.

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You sound like you are advertising for different types of instant coffee.

cass888 said:

So much theory, still such a loser in life, even with your 2-1. You really thought 2-1 is the same as KJ's 2 1s.

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Previously I had mentioned that there is survey data showing public resistance among Europeans to provide money to help other Europeans. The following is a well followed polling site that is quoted ocassionally on the BBC. From a survey done in May 2012, the incidence of respondents OPPOSED to providing assistance to other countries was

http://www.pewglobal.org/2012/05/29/european-unity-on-the-rocks/

UK 62%
France 56%
Germany 48%

These 3 countries are the main expected contributors to a bailout of Europe. As can seen there is little public support for the kind of extensive bailout LT and other market traders are hoping for. Hence the assertion that perhaps the risk of the nightmare scenario happening might be understated.

The poll numbers could of course change if the crisis worsens. This could spur an awakening of enlightened self interest that see the people of these countries emptying out their treasuries to save Europe. Or it could trigger a sense national self preservation that sees violent protest to the use of national funds to bailout anyone.

Going one step further, it is also useful to consider how the richer Europeans (French, German and even the British) see their poorer cousins. My impression (largely consistent with the survey data) is that the perception is not too different from the way Singaporeans see Pinoys, Thais, Ah Tiongs and Ah Nehs.

none of you protesting outside Istana or parliament yet? How about writing more letters to the IMF?

cass888 said:

So much theory, still such a loser in life, even with your 2-1. You really thought 2-1 is the same as KJ's 2 1s.

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Aurvandil is not GMS. The real GMS thinks it is beneath contempt to reply to a "WP insect" like me.

aurvandil said:

The second species caters to investors who are more cynical after having lost money or seen friends and family who have lost money. To persuade them to invest, they use a mutated form of the EMH to sell ETFs and/or low load funds. To make their pitch more convincing, they will even run down the first species as being "conmen". As the comissions are much lower, the species that preys on such investors will try to make this up by volume. Often they will try to convince investors to invest their life savings in such "safe" "statisically proven" investments.

Between the 2 species, they have caused untold losses to small retail investors hoping to put a little money away for their future and their retirement.

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I have a friend who has been been saving all her money in physical gold, buying gold pieces, gold pendants, gold coins, everything gold, and putting it all in her little metallic safe deposit box besides mattress at home. I think over past several years she beat most professional managers hands down -- including those who invested in gold stocks.

Thick Face Black Heart said:

I have a friend who has been been saving all her money in physical gold, buying gold pieces, gold pendants, gold coins, everything gold, and putting it all in her little metallic safe deposit box besides mattress at home. I think over past several years she beat most professional managers hands down -- including those who invested in gold stocks.

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Her main opponents are not professional managers, but professional burglers. :o

jw5 said:

Her main opponents are not professional managers, but professional burglers. :o

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If you want to do precious metals like gold, cheapest and safest way would be to do futures and then rollover before expiry. The cost is very much lower than the lowest gold based ETF / low-load gold based unit trust.

aurvandil said:

If you want to do precious metals like gold, cheapest and safest way would be to do futures and then rollover before expiry. The cost is very much lower than the lowest gold based ETF / low-load gold based unit trust.

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Unless you are an institutional investor with direct mkt access, even futures are not risk free, as the case of M.F. Global has demonstrated.

The best way to safeguard your wealth is to buy a gold coin or bar from UOB Treasury desk every month. You don't have to start big, you can start with 1/10 ounce and work your way up as your income increases.

Futures are a leveraged instrument. Assuming you had a smallish sum (eg $100k) to invest, it is not too difficult to structure the investment so that 80% or so of the investment is covered by deposit insurance. Futures brokers are not banks and a mistake many retail investors make is to treat them as such and leave large amount of deposits with them.

Thick Face Black Heart said:

Unless you are an institutional investor with direct mkt access, even futures are not risk free, as the case of M.F. Global has demonstrated.

The best way to safeguard your wealth is to buy a gold coin or bar from UOB Treasury desk every month. You don't have to start big, you can start with 1/10 ounce and work your way up as your income increases.

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