reminders about irrationality of the market and knowing our limits

-

 Some reminders never go out of date.

do we know our circle of competence

We have limited knowledge, funds and time to research. Overhearing a conversation at a bar is not research. what we know is good but what we think we know can be a pitfall. Do not move away from what we understand in-depth.

markets can stay irrational for a very, very long time

"The market can remain irrational longer than we can remain solvent" - John Maynard Keynes 

The price of a stock does not always reflect the value of the business. But when a sufficient difference is in our favour, we can consider buying or selling.

Comments

Post a Comment

Popular posts from this blog

A dive into the inflation numbers with bonds, oil & trade (09 Oct 2022)

-
Image
A dive into the inflation numbers The most important news in the coming week should be the Consumer Price Index (CPI) update on 13 Oct 2022.  CPI represents inflation in the economy.  Inflation is the "invisible" tax on all (affecting especially the lower income demographics as prices are rising, leading to a lesser disposable income and thus, reduced spending power.  With the "favourable" unemployment number of 3.5% announced on 7th Oct 2022, this will be a key reference for the Federal Reserve's coming interest rate hike.  It is expected that the inflation to remain elevated and the market seems to be factoring in a 75 basis points rate hike . Monthly 12-month inflation rate in the United States from January 2020 to August 2022 From the chart above, inflation may have peaked.  However, it is to note that this is based on a "12-month rate".  This meant that the inflationary impact prior to the periods before the 12 months was removed from the calculat...
Read more

Trading Tips: Tracking trend momentum using volume

-
Image
Each stock has 3 components as per the 1D Tesla chart below: price time volume   Tesla 1D chart as of 6th Apr 2022 The components of price and volume affect the movement of the stock as this moves along a linear scale of time.  There cannot be any reversal or going back in time as the ticker moves forward in one direction, unless you drive a nuclear powered Delorean.   Back to the Future with DeLorean  
Read more

List of best small cap companies from 2021 - Forbes

-
Here is the list of best small cap companies from #Forbes for 2021. we have sorted out these by their 52-week return, with the top performers listed on top.   As always, this is a good list for us to start our research with.  Please do our own due diligence before investing. Forbes list of best small cap companies 2021 https://www.forbes.com/lists/best-small-cap-companies/#60bc3ec647db Rank Company Industry 52-Week Return Revenue 1 IDT Telecommunications Services 498% $1.4 B 2 Joint Corp Health Care Equipment & Service 389.10% $70.2 M 3 Big 5 Sporting Goods Retailing 326.50% $1.2 B 4 Gritstone bio Drugs & Biotechnology 321.30% $44.8 M 5 Aviat Networks Technology Hardware & E...
Read more