The Intelligent Investor - Chapter 1 Investment versus Speculation

"Knows the price of everything, and the value of nothing." - Oscar Wilde

The Intelligent Investor - Chapter 1 summery

What do we mean by "investor"? throughout this book the term will be used in contradistinction to "speculator". As far back as 1934, in our textbook Security Analisys, we attempted a precise formulation of the difference between the two, as follows: "An investiment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operation not meeting these requirements are speculative."

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Now our concern is of the opposite sort. We must prevent our readers from accepting the common jargon which applies the term "investor" to anybody and everybody in the stock market...

The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is a cause of concern. We have often said that Wall Street as an institution would be well advised to reinstate this distinction and to amphasize it in all its dealings with the public. Otherwise the stook exchanges may some day be blamed for heavy speculative losses, which those who suffered them had not been properly warned against. Ironically, once more, much of the recent financial embarassment of some stock-exchange firms seems to have come from the inclusion of speculative common stocks in their own capital funds. We trust that the reader of this book will gain a reasonably clear idea of the risks that are inherent in common-stock commitments-risks which are inseparable from the opportunities of profit that they offer, and both of which must be allowed for in the investor's calculation.

What we have just said indicates that there may no longer be such a thing as a simon-pure investment policy comprising representative common stocks - in the sense that one can always wait to buy them at a price that involves no risk of a market or "quotational" loss large enough to be disquieting. In most periods the investor must recognize the existence of speculative factor in his common-stock holdings. It is his task to keep this component within minor limits, and to be prepared financially and psychologically for adverse results that may be of short or long duration.

Two paragraphs should be added about stock speculation per se, as distinguished from the speculative component now inherent in most representative common stocks. Outright speculation is neither illegal, immoral, nor (for most people) fattening to the pocketbook. More than that, some speculation is necessary and unvoidable, for in many common-stock situations there are substantial possibilities of both profit and loss, and the risk therein must be assumed by someone. There is the intelligent speculation as there is intelligent investing. But there are many ways in which speculation may be unitelligent. Of these the foremost are: (1) Speculating when you think you are investing; (2) Speculating seriously instead of as a pastime, when you lack proper knowledge and skill for it; and (3) risking more money in speculation than you can afford to lose.

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Bill Gates speach at Harvard

IBOV - LTA

O motivo de 2010 estar andando muito vagarosamente, acredito eu, ou até mesmo com uma possivel retração em comparação com 2009 é devido à forte inflação junto com o pouco crescimento da economia. (colocarei gráficos da evolução do índice dow jones em um próximo post, mostrando os níveis de inflação e como isso afeta a evolução das ações.)
Apesar de tudo o ibovespa continua seguindo em tendencia de alta como podemos ver na primeira imagem. Porem acho importante ficar atento a uma possivel retração no mercado acionário nesse ano.
Mostrado na figura abaixo, o índice bovespa formou um topo duplo iniciando um movimento de queda dando motivos para ficarmos atento a um possivel rompimento da LTDA no que poderia vim acarretar em uma nova recessão no mercado acionário.

Soros Stagflation

Esse video sera comentado num proximo post mais detalhadamente.

Soros Bubbles

Introducao a Inflacao

A Crise de 1929 - Videos

CFR - JP Morgan

Zona de consolidacao no IBOV

Havendo rompimento de uma das linhas, entramos no trade na direcao desse rompimento.

Londres - revista Inve5tors

The Trader

Yup, it's a bear market...

the trader reflects on the fulfilment of his criteria for calling a bear market and what it means for the indices now.

(O trader reflete no potencial de seus criterios para chamar um bear market e no que isso siguinifica.)

The latest swoon in the stock markets finally provided the bearish signals I have been hanging on for. The Coppock indicator turned negative for both FTSE100 any many of the others top indices. More importantly, both Dow Industrials and Transports breached their June lows, thereby giving a Dow- Theory sell signals. As a result I believe this officially now qualifies as a bear Market.

(O ultimo desmaio no mercado financeiro finalmente provou ser os sinais de um bear market que eu estava esperando. O Coppock indicador tonou-se negativo para ambos FTSE100 e muitos dos outros principais indices. Mais importante, eh que tanto como o Dow jones Industrial e o Dow Jones Transportes rompenram suas minimas de junho, assim dando o sinal da Teoria de Dow para venda. Como resultado agora, acredito que esta oficialmente classificado como um Bear Market.)

In the grander scheme of things, I regard this new downtrend as the resumption of the process that began in 2000. As I argued most recently in June's edition of `Trader's Bigger Pictures`, we have been long-term bear market for the past decade, albeit one punctuated by spectacular bear narket rallies, such as that of 2003-07 and 2009-10. until last week, though, I thought the markets would exceed their April highs before the downtrend resumed. I no longer hold that view.

So, how far will the downtrend take us and over what period? the most optimistic view is that it will turn out to be the barest of Bear Markets. I referred on 2 June to a Morgan Stanley view that the sell-off was like that of 1998, where the market plunged by quarter in 56 days, before galloping on to new highs in short order. But I balk at comparing 1998 to the present. Back then, we were still in a long term bull Market. TODAY, WE ARE IN A LONG TERM BEAR MARKET.

At the very last, I belive the US and UK markets will ultimately revisit their lows of 2003 and 2009. In all probability, I see them going well through those levels - see the `Trader's Bigger Picture` for more detail on this. According to my cycle projections, the larger downtrend is likely to persist into late 2012. As things stand today, the most persistent selling could come in late 2011 and early 2012, when all of the S&P's long term cycles will be in their down-phases.

As with any bear market, we should not expect one-way traffic. Dramatic rallies will occur along the way. While short selling will naturally offer the best opportunities overall, I will certainly be ready to play the market from the long side at strategic moments. But I obviously do not expect buy-and-hold investing to prosper in this environment. I sold my personal FTSE100 holdings earlier this year and switched into gilts. This has paid of so far.

... Is this wise, considering that I now reckon we are in a bear market? On the whole, I believe in trading in the same direction as the larger trend. If the opportunity looks good enough, though, I can allow myself to break this, as a long as I run a tight stop-loss.

Venda ITUB4

Razao BTC,

Venda de CSNA3

Venda de CSNA3

Stop acima da maxima de ontem

Razao, ilha de reversao

Grafico diario de vale, porem essa jah nao eh a primeira vez que me ocorre esse tipo de situacao.
Na leitura de candlestick, encontramos sinais de reversao, porem na leitura de indicadores o de compra.
Se alguem por favor tiver uma resposta pra esse problema, por favor adoraria sabe-la.
Especialmente para esse caso, cruzamento de compra MACD vs Candle de reversao em resistencia. Qual sinal eh mais valido?

PETR4

PETR4 - Semanal, triangulo simetrico

Ombro Cabeca Ombro

Compra de mini indice, Petr4 e outros pricipais ativos que apresentam semelhancas graficas.