Liar Liar

It’s always good to read some smart investors who did really well in the past. Here are some other lies that investors blogtell themselves on a consistent basis, including many I’ve told myself over the years:

Who are you ? Are you a Trader or Investor, Most of the post on this blog is written under the background as investors not as a Trader.

If only I would have taken my own advice…

I’m not wrong, the market is. You’ll see.

Investing is easy.

I can predict when the next correction is coming. Continue reading “Liar Liar”

Regulations :) EMIR Trade Reporting – 2

Initially thought of sharing my review on the Wolf of Wall Street today, but I do not wanted to break the series of the EMIR blogregulations that we ended up yesterday choosing the Trade repositories (TR). Now we stand at the point from the Question no.4 of yesterday’s post.

a) Choose a 3rd Party Provider, following your decision to delegate

b) Decide which TR you will connect to, if you will self-report

c) Liaise with your counterparties to find out their requirements, if you will delegate reporting to them.

Question 4: What are the criteria to be taken into account before choosing my 3rd Party Providers?

The 3rd Party Provider should help you adapt to the new workflow for Trade Reporting as it will serve as the go-between with TRs.  Continue reading “Regulations 🙂 EMIR Trade Reporting – 2”

Richard Dennis and His Turtles

Many of you may not be familiar with the name Richard Dennis. Dennis began his trading career at the age of 17 as an order runner to the Chicago Mercantile Exchange and went on to become one of Chicago’s most successful traders.

Dennis firmly believed that successful trading could be taught. To prove his point, he recruited and trained 21 men and 2 women in two groups, one from December 1983, and the other from December 1984. This group was known as the Turtles and for only two weeks he taught them all they needed to know to become successful traders including a simple trend-following system, trading a range of commodities, currencies, and bonds as well as how to  buy within a certain range and how to cut a position size during losing periods.

When the two-week training period was over, Dennis opened a trading account for each of the Turtles and had them how to use the systems they had been shown in order to trade. During this one-month trading period, they were allowed to trade a maximum of 12 contracts per market. At the completion of the trial period, he gave those Turtles who had successfully traded the system during the one-month trial from $250,000 to $2 million of his own money to manage.

When his experiment ended five years later, his Turtles reportedly had earned an aggregate profit of $175 million, proving without a doubt that anyone can learn to trade. See more on The exact system taught to the Turtles by Dennis has been published in at least two books.Many of the Turtles continued to trade and became recognized figures in their field.   Continue reading “Richard Dennis and His Turtles”

Collateral and Clearing

A few good articles are up on the topics of collateral and clearing:   images

This article on Bloomberg highlights the fact that banks will be prepared to use the cheapest collateral possible, regardless of quality. That could of course have quite an impact on the objective of “systemic risk reduction”.

Similarly this article in IFR looks at the looming rules on Initial Margin on uncleared trades. If widely applied, it could discourage hedging by end users, thus also negating the desired system risk reduction of the rules.  Continue reading “Collateral and Clearing”

The Power of Passive investing

Guest post: The Power of Passive Investing

images-1Investing in the stock market is a bit counter-intuitive. It would seem that the investor that puts in more time and effort managing his investments should have an edge over other investors. However, this extra effort actually can create serious problems. A more hands-off strategy typically works out better for most investors. This is the power of passive investing.

Active vs. Passive Investing

An active investor is trying to get above average market returns by constantly buying and selling stocks. He hopes to find the most profitable stocks on the market through research and market timing. The problem with this is that only half of investors in the stock market can be above average each year. Continue reading “The Power of Passive investing”