Category Archives: Opinion

Also known as ‘rants’

Secrets They Don’t Tell You About Trading

Distilled wisdom from approximately five years of battling markets as a retail trader. Classified most often in the category of ‘brilliant advice you won’t follow’ based on my experience, we all view ourselves as considerably above average. All of these points could be expanded on but represent a minimal guide to reality as I experienced it.

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1) Equity swings are brutal for your emotional health : you have to work out how to “game” your emotions so you can focus on your “average” day and making that better and not thinking  +/- 2 standard deviation days are normal.

2) Escape velocity is difficult to achieve : to make a living you really need a large multiple of a normal salary just for your trading stake. The cost of living can eat away at your capital base.

3) Reasonable expectations :  Warren Buffet does 22% p/a. Will you do better? And how consistently? Funds management is a very different thing to retail trading.

4) It takes years, not months : Just like chess mastery, to get to a high level in trading, the journey is measured in years and not months. Might your time be better invested in another area of income generation?

5) The education industry is dangerous : The skill to recognize sharks can only be gained by swimming with them long enough until you notice your own blood in the water (or words to the effect)

6) Opportunity cost can be significant : While you are engaging in this anti-social activity, you could be contributing to society in a  more meaningful way than just a “liquidity provider” in the capital markets.

7) You can lose your respect for money : When your equity swings are daily in the thousands of dollars range it is a simple thing to lose discipline in matters such as daily budgeting. Why bother to look after saving  a few dollars at the shopping center when it might be less than the brokerage on your next trade?

8> Variable reinforcement activities can lead to addiction : Beware of signs of addiction.

9) You can never truly win unless you have a finish line : Every day places you closer to ruin, unless you know when to walk away from the heat, it will eventually burn you.

10) Sometimes a zero sum game is good : As often the case, trading represents a negative sum game.

1000 years of cheap food.. Over?

One of the developing themes for the future of the world is that the era of cheap food might be coming to an end.

The world is kind of at an inflection point at the moment I believe, but it’s also possible that could be said of any time if you think about it. It looks like global crude oil production could well have peaked in May 2005 and for a world that is soaked in oil, from the clothes you wear to the food you eat this is no trifling matter, it’s not the sort of issue that is likely to go away if you ignore it anyhow. The role of cheap energy in the food production cycle is critical and if the cheapness part of the equation is tinkered with the rest of the equation suffers as well.

I’m predicting a likely chance that I will see the return of victory gardens in the Australian back yard in my lifetime.

Election.. November 24

Just a note to myself..

Remember… I Have to vote.. November 24, otherwise I will get a fine. Though I have heard that a good excuse will get you out of a fine if indeed you do forget to vote, say an excuse such as not voting for ‘religious reasons’ or something similar.

I’m voting in what is a very safe labour seat, Wayne Swan is the federal member and I’m not even aware of the other candidates for the seat as it’s an easy put away for the future Krudd goverment I imagine. I don’t have any strong political views other than there seem to be plenty of smart and plenty more not so smart people on either side, and the policies seem to be increasingly similar on a lot of subjects.

Not that I’m interested in changing the world in such a way but at some point in the future it would be nice to have a democratic system that actually made some sense, unlike the present one we have which clearly doesn’t. One vote, one value.. my hat. A few voters in marginal seats have a huge impact on the end result and the great majority of the population might as well just go fishing.

I thought the most telling piece of propaganda so far was how Kevin 07 stole honest J’s limelight from APEC, speaking Mandarin to the Chinese premier, that was just classic.. I imagine that won him a lot of votes with Gen X and Y voters who probably recognize the wisdom of closer ties with Asia and no desperate need to rush headlong into every oil soaked battlefield the US chooses.

More or less things will continue as they always have I predict, don’t overestimate other peoples role in your success, it will still be up to you, which is why Australia is really a great country I think!

ADSL2+ … About Time

I’m getting ADSL2+ connected this month, can’t wait.

The following graph is a list of the speeds you can expect for various connections related to your physical (as the kitty runs along the road rather than as the crow flies) distance from the exchange. I’m only 500m from my exchange so should be near the top level for speed, presently I’m only getting 0.54 MBPS download speed so it could be a welcome visit to the first world (almost) in terms of internet connectivity. There is only a 20 Gig D/L limit but I will take what I can get for the moment, hopefully one day Australia can take our place in the 21st century and such services will arrive faster.

I’m not quite sure what it will mean in practical terms but I will soon see.

ADSL2+