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35 million years of evolution and we are as risk adverse as monkeys... 
http://www.ted.com/talks/laurie_santos.html
http://www.ted.com/talks/laurie_santos.html
A Monkey Economy
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So_Cynical
The Contrarian Averager
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Nice find Gav...i need to work on my loss aversion.
Wysiwyg
Everyone wants money
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Mistakes are necessary.
When a cheetah chases a gazelle, leaps for the kill, and misses is part of the unique balance among organisms. A kill every time would see the population of gazelles dwindle and the population of cheetahs rise creating an imbalance. Not good for future cheetahs.
Everyone can't be right.
Laurie Santos did not mention the fact that for someone in the financial markets to profit, another must lose. Everyone can't make the right choice every time (there would be no market) but some can make the right choice most of the time.
Lesson = learn what it takes to make profits greater than losses.
When a cheetah chases a gazelle, leaps for the kill, and misses is part of the unique balance among organisms. A kill every time would see the population of gazelles dwindle and the population of cheetahs rise creating an imbalance. Not good for future cheetahs.
Everyone can't be right.
Laurie Santos did not mention the fact that for someone in the financial markets to profit, another must lose. Everyone can't make the right choice every time (there would be no market) but some can make the right choice most of the time.
Lesson = learn what it takes to make profits greater than losses.
So_Cynical
The Contrarian Averager
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Different time frames and objectives means that sometimes both party's to a trade can profit and be winners.
Wysiwyg
Everyone wants money
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Well in the markets basic form there is simply a transfer of money from one person or group to another. Every single transaction either makes money, loses money or breaks even while the in between team (deal brokers) scrape some cream off the top.
One has to be conscious of the basics when dealing with the financial system otherwise it will eat our lunch and strip the less experienced clean (I know
). A complex intellectual approach is all pee and wind, a big charade. The game itself is not complex but there is money on the sides by making it 'appear' that way. What do you think?
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Well in the markets basic form there is simply a transfer of money from one person or group to another. Every single transaction either makes money, loses money or breaks even while the in between team (deal brokers) scrape some cream off the top.
One has to be conscious of the basics when dealing with the financial system otherwise it will eat our lunch and strip the less experienced clean (I know
What do you think?
From a traders prospective you are right. But then from an investors perspective you are definitely wrong. Trading is an unproductive use of money it is useful only as a means of transfering assets from one person to another at a price. The cost of these transactions is an asset loss. Investing ,on the other hand is a use of money to fund real production of goods and services. If that money is used to create more value than the cost of creating that value then it does result in real gains. Even my trades are real investments. Take AUT. I trade to accumulate. I accumulated to invest in the search for oil and gas. I hold AUT because it is now a producer of real wealth in the form of oil and gas which I believe to be of greater value than the cost of finding and producing that oil and gas. I can justify holding all my stocks on that basis.
So_Cynical
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Agree..however there is complexity for those needing or wanting to make it complex...perhaps different people are just happier and more comfortable dealing with the game in there own way...and for some people (like me) its a very simple straight forward game.
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I fear that the stock market has become far more of a game to make money in itself as distinct from a mechanism to raise capital for business purposes.
In theory a group of people form a company to pursue some business. They sell shares on the market to bring in fellow investors. The mangers of the company try to make the company successful on behalf of the long term shareholders - the actual owners.
In practice however I suggest we can see a number of different events.
1) A group of people set up a company and immediately allocate themselves say 40% of the shares valued at $40 million.
2) They create a story to attract other investors who buy the other 60% of the shares for $60 m. Suddenly the paper shares the original owners gave themselves are now worth a real $40 on the market if they can just find some new people to come on board.
3) To get new people to come on board the "you beaut" company puts out very impressive stories, projections of huge future earnings, perhaps even short period successes. New investors pile in increasing the share price and helping to create an even create demand for the shares.
4) The managers of the company also hold a quarter of the shares and start to pump the price focusing on short term profits while taking out huge salaries.
All the time of course the Stock Exchange is getting it's cut from all sales, as are stock brokers and various fund groups which invest our super funds and take a regular 2% a year from the capital (win lose or draw).
So in the end who makes the money? As I see it the initial company developers turn initial paper scrip into real cash. The Managers take large chunks from whatever profits are generated. All the ticket clippers get a piece of the action.
The small investor shareholder overall seems to gain the least in the process.
Does this sound unreasonable? Ask a simple question. What are the actual long term returns to investors who buy into investment funds managed by the various insurance companies and super funds? When I have seen analysis by APRA of long term funds the results for investors have been very, very modest.
In theory a group of people form a company to pursue some business. They sell shares on the market to bring in fellow investors. The mangers of the company try to make the company successful on behalf of the long term shareholders - the actual owners.
In practice however I suggest we can see a number of different events.
1) A group of people set up a company and immediately allocate themselves say 40% of the shares valued at $40 million.
2) They create a story to attract other investors who buy the other 60% of the shares for $60 m. Suddenly the paper shares the original owners gave themselves are now worth a real $40 on the market if they can just find some new people to come on board.
3) To get new people to come on board the "you beaut" company puts out very impressive stories, projections of huge future earnings, perhaps even short period successes. New investors pile in increasing the share price and helping to create an even create demand for the shares.
4) The managers of the company also hold a quarter of the shares and start to pump the price focusing on short term profits while taking out huge salaries.
All the time of course the Stock Exchange is getting it's cut from all sales, as are stock brokers and various fund groups which invest our super funds and take a regular 2% a year from the capital (win lose or draw).
So in the end who makes the money? As I see it the initial company developers turn initial paper scrip into real cash. The Managers take large chunks from whatever profits are generated. All the ticket clippers get a piece of the action.
The small investor shareholder overall seems to gain the least in the process.
Does this sound unreasonable? Ask a simple question. What are the actual long term returns to investors who buy into investment funds managed by the various insurance companies and super funds? When I have seen analysis by APRA of long term funds the results for investors have been very, very modest.
Basilio,
All too true in a lot of cases. There are all kinds of con men and spivs around. Directors have too much power to pay themselves much more than their real worth. However that is where fundamental investing pays off and DYOR becomes the most important in an investment program. There are many genuine companies with genuine products or services, managed by genuine people that will give good returns and make investing profitable. In between there are opportunities to join the game and enjoy the chase without losing your shirt to the con. It is a game played by consenting adults with no one forcing another to participate.
Hang on there is the government forcing people to participate. Super fund investing.
All too true in a lot of cases. There are all kinds of con men and spivs around. Directors have too much power to pay themselves much more than their real worth. However that is where fundamental investing pays off and DYOR becomes the most important in an investment program. There are many genuine companies with genuine products or services, managed by genuine people that will give good returns and make investing profitable. In between there are opportunities to join the game and enjoy the chase without losing your shirt to the con. It is a game played by consenting adults with no one forcing another to participate.
Hang on there is the government forcing people to participate. Super fund investing.
wayneL
VIVA LA LIBERTAD, CARAJO!
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I fear that the stock market has become far more of a game to make money in itself as distinct from a mechanism to raise capital for business purposes.
In theory a group of people form a company...
....Does this sound unreasonable? Ask a simple question. What are the actual long term returns to investors who buy into investment funds managed by the various insurance companies and super funds? When I have seen analysis by APRA of long term funds the results for investors have been very, very modest.
That describes a lot of junior explorers. It works because the punters go for it...
...actual, re-jig the above a bit and it's a good description of government.
People get the market (and government) they deserve.
In the market we get to choose our own rules as individuals. We can play the game with the wide boys and fleece cash from muppets, or do the DD as Nioka says and only purchase good value.
Basilio,
All too true in a lot of cases. There are all kinds of con men and spivs around. Directors have too much power to pay themselves much more than their real worth. However that is where fundamental investing pays off and DYOR becomes the most important in an investment program. There are many genuine companies with genuine products or services, managed by genuine people that will give good returns and make investing profitable. In between there are opportunities to join the game and enjoy the chase without losing your shirt to the con. It is a game played by consenting adults with no one forcing another to participate.
Hang on there is the government forcing people to participate. Super fund investing.
But superannuation is merely a vehicle - you don't have to have your "super" invested in shares, most funds allow the option of cash, fixed int and property, and you can manage your own super if you wish via smsf
But superannuation is merely a vehicle - you don't have to have your "super" invested in shares, most funds allow the option of cash, fixed int and property, and you can manage your own super if you wish via smsf
Cash not an option, inflation kills that avenue. Fixed interest, returns usually only match inflation, so that option almost rules itself out. Property I agree with property as long as you stick to commercial, tennants from hell and their "rights" rule out housing for me. So that gets back to being forced into the investment market with compulsory savings one way or another even if you manage your own fund.
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This is the way many countries are run in the world - running amok...
https://www.msn.com/en-gb/video/wat...use-tense-scene-at-zoo/vi-AAA56HF?ocid=HEA000
The chimps in the video are almost walking proof for evolution – and that is simply what makes them so scary. How human and violent they are with their pumped up muscle and anger.
https://www.msn.com/en-gb/video/wat...use-tense-scene-at-zoo/vi-AAA56HF?ocid=HEA000
The chimps in the video are almost walking proof for evolution – and that is simply what makes them so scary. How human and violent they are with their pumped up muscle and anger.
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