The value of stocks always rise… except when you invest in them?

Wednesday, 11 December, 2013

I’m posting this one because the headline, “Why I don’t trade stocks and (probably) neither should you”, caught my eye. I’m no expert, but I think there’d be one or two people who might disagree with this:

Imagine Yves buys the stock today. His purchase raises the price up a bit (supply and demand) so the next buyer will pay a bit more. The buyer after that trades a bit higher still, etc. Eventually, the price rises higher than is “reasonable” even given the company’s rosy prospects. Cecil, who buys at this price, should expect to lose money. The problem: how do we tell if we are Yves or Cecil? There’s no way. In fact, current prices reflect consensus, so the very act of buying is more aggressive than average and therefore likely to be a mistake. Unless we see something no one else does (and have good reason to believe that no one else sees it), there’s no reason to expect any asset to go up. It’s already “up.” And unfortunately, unless we are trading on insider information, everyone has already seen what we see.

Certainly not all people see the share market as a non-starter when it comes to investing, but it’s food for thought, if you happen to be considering such options at the moment.

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Mountain high, stockprice low

Wednesday, 31 March, 2010

mountain range photo

During a recent trip to Mount Aconcagua in Argentina, Michael Najjar photographed a number of mountain ranges, and later realised their shapes bore a resemblance to a number of sharemarket indices from the last 20 to 30 years.

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Sharemarket betting, the ASX index will reach 5000 this month

Tuesday, 9 March, 2010

Here’s one way of making money through the sharemarket without actually investing in any stocks, bet on what the value of ASX index will be at the end of each month.

From today Australians can place a bet on where the S&P/ASX 200, the index of the nation’s 200 biggest listed companies, will finish at the end of the month. Centrebet’s bourse book shows that so far, most punters expect the market will rise in March. There are longer odds on a fall or steady result.

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Invest on the day of a blue moon but not a total solar eclipse

Friday, 24 July, 2009

Apparently many share investors are very superstitious, and tend to refrain from buying shares, and making other investment decisions, on days when there is an eclipse.

Using four broad indices of the U.S. stock market, we uncover strong evidence in support of our superstition hypothesis in four distinct ways. First, the occurrence of negative superstitious events (i.e. eclipses) is associated with below-average stock returns, which is consistent with a diminished buying pressure coming from the superstitious.

So… as I see it, buying shares or stocks on the day of an eclipse might be a good idea as you could be buying at a lower price, which you can later sell at profit once the superstitious investors have returned to the market and buoyed it back up again.

Via Marginal Revolution.

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