Posts Tagged ‘randomness’

W, V, U, L or Z: What Direction Is The Economy Going?

Mark Sunshine discusses the possible shape of the eventual economic recovery – pick a letter, any letter.  Welcome Mark!

W, V, U, L or Z: What Direction Is The Economy Going?

Economic Nostradamus, predictions on economyCourtesy of Mark Sunshine at The Sunshine Report

Almost every day I am asked about the economic recovery and whether or not it is sustainable.

People ask because there is a constant barrage of economic predictions by economists that pretend that they know what will happen in the future even thought they still can’t figure out what happened in the past. Listening to economists and TV talking heads it’s clear that while everyone has an opinion, no one really knows if the recovery will take the form of a “W”, “V”, “U”, “V” or “Z” (I am not really sure what a “Z” recovery is but some really confusing economists are predicting it).

This time around almost all of the TV pundits are going be able to claim that they are the economic Nostradamus of our time because sooner or later graphs of economic growth are going to have the profile of most, if not all, of the letters of the alphabet. For the foreseeable future, economic growth is going to be volatile and somewhat random and almost every prediction will be right.

Rorschach test There is going to be a level of randomness to the growth trajectory of the economy as it inevitably grows, then grows at a slower pace, then grows at a faster pace, then shrinks a little, and then grows again. Unfortunately, given the seriousness of the economy’s problems, I think it will be a while before the U.S. is back on a sustainable high growth trajectory that is sustainable (thereby making the L crowd right as well).

So, like a Rorschach Test, for the next few years there will be something for everyone in the economic statistics.

The U.S. economy is starting to bounce back because of the positive cumulative effects of (i) an inventory rebuilding cycle (i.e., production of new inventory is rising because inventory stocks in many industries are depleted and need to be replenished), (ii) a lot of fiscal and monetary stimuli and (iii) productivity growth (one tiny, positive side effect of layoffs). The bounce from inventory restocking will be temporary and, as a result, if all other things remain constant, growth will taper off to a much slower pace late in the 4th quarter
continue reading


Tags: , , , , , , , , ,




The importance of investment process

Vitaliy: "This article I’ve shared before and will share it again; it is by far my favorite article I’ve ever written as it really highlights what investing is about – the investment process.  It is a true story, with very few magnifications on my part.  I hope you enjoy it."

The importance of investment process

investing, gamblingCourtesy of Vitaliy Katsenelson at Contrarian Edge

“Any time you make a bet with the best of it, where the odds are in your favor, you have earned  something on that bet, whether you actually win or lose the bet. By the same token, when you make a bet with the worst of it, where the odds are not in your favor, you have lost something, whether you actually win or lose the bet.” – David Sklansky, ‘The Theory of Poker’

Over a lifetime, active investors will make hundreds, often thousands of investment decisions. Not all of those decisions will work out for the better. Some will lose and some will make us money. As humans we tend to focus on the outcome of the decision rather than on the process.

On a behavioral level, this makes sense. The outcome is binary to us – good or bad, we can observe with ease. But the process is more complex and is often hidden from us.

One of two things (sometimes a bit of both) can unite great investors: process and randomness (luck). Unfortunately, there is not much we can learn from randomness, as it has no predictive power. But the process we should study and learn from.

casinoTo be a successful investor, all you need is a successful process and the ability (or mental strength) to stick to it.  Several years ago, I was on a business trip. I had some time to kill so I went to a casino to play blackjack. Aware that the odds were stacked against me, I set a $40 limit on how much I was willing to lose in the game.

I figured a couple hours of entertainment, plus the free drinks provided by the casino, were worth it. I was never a big gambler (as I never won much). However, several days before the trip I had picked up a book on blackjack on the deep discount rack in a local bookstore. All the dos and don’ts from the book were still fresh in…
continue reading


Tags: , ,




 
 
 

Zero Hedge

Facebook Really Is Bad For You, Researchers Say

Courtesy of ZeroHedge. View original post here.

Apparently, Chamath Palihapitiya was on to something when he revealed earlier this week that he felt “tremendous guilt” for the role that he played in Facebook’s success as a social-media company.

To wit, Facebook's director of research David Ginsberg and research scientist Moira Burke published a blog post this...



more from Tyler

Phil's Favorites

What Doug Jones's win means for Mitch McConnell, Steve Bannon and the Democrats

 

What Doug Jones's win means for Mitch McConnell, Steve Bannon and the Democrats

Courtesy of David C. BarkerAmerican University

Senate Majority Leader Mitch McConnell calls for Roy Moore to step aside. He later said “let the voters decide.” AP Photo/J. Scott Applewhite

Here’s the thing about selling your soul: The devil had better deliver. It’s one thing to be damned; it’s another to be a damned loser.

This is the difficult lesson that the Republican National Committee and much of the GOP are learning right now, in the wake of Ro...



more from Ilene

Chart School

Tape Reading - Dow Jones Price Waves

Courtesy of Read the Ticker.

This is a continuation of price wave analysis.

More from RTT Tv

RTT Volume wave analysis like this helps the retail investor find price action that is true. The reference to 'tape reading' is by the definition of Richard Wyckoff (section 5M of the Wyckoff Course), you can learn more about RTT Volume Wave here.





NOTE: readtheticker.com does allow users to load objects and text on charts, however some annotations are by a free third party image tool named Paint.net ...

more from Chart School

Insider Scoop

Attention Contrarians: This Analyst Says JD.com Set Up Could Be In Your Favor

Courtesy of Benzinga.

Related JD Want Some Exposure To China's Growth? Stifel Says Buy JD Or Alibaba Q3 13F Roundup: How Buffett...

http://www.insidercow.com/ more from Insider

Biotech

Designer proteins that package genetic material could help deliver gene therapy

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

Designer proteins that package genetic material could help deliver gene therapy

Courtesy of Ian HaydonUniversity of Washington

Delivering genetic material is a key challenge in gene therapy. Invitation image created by Kstudio, CC BY

If you’ve ever bought a new iPhone, you’ve experienced good packaging.

The way the lid slowly separates from the box. The pull...



more from Biotech

Digital Currencies

Not A Bubble?

Courtesy of ZeroHedge. View original post here.

Meet The Crypto Company - up almost 20,000% since inception in September...

To a market cap of over $12.6 billion...

Grant's Interest Rate Observer drew the world's attention to this 'company' yesterday.....



more from Bitcoin

ValueWalk

Tax Bill May Spark Exodus From High-Tax States

Courtesy of FinancialSense.com via ValueWalk.com

The following is a summary of our recent podcast, “Exodus – The Major Wealth Migration,” which can be listened to on our site here on on iTunes here.

It’s looking increasingl...



more from ValueWalk

Members' Corner

An Interview with David Brin

Our guest David Brin is an astrophysicist, technology consultant, and best-selling author who speaks, writes, and advises on a range of topics including national defense, creativity, and space exploration. He is also a well-known and influential futurist (one of four “World's Best Futurists,” according to The Urban Developer), and it is his ideas on the future, specifically the future of civilization, that I hope to learn about here.   

Ilene: David, you base many of your predictions of the future on a theory of historica...



more from Our Members

Mapping The Market

Puts things in perspective

Courtesy of Jean-Luc

Puts things in perspective:

The circles don't look to be to scale much!

...

more from M.T.M.

OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



more from OpTrader

Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



more from Promotions

Kimble Charting Solutions

Brazil; Waterfall in prices starting? Impact U.S.?

Courtesy of Chris Kimble.

Below looks at the Brazil ETF (EWZ) over the last decade. The rally over the past year has it facing a critical level, from a Power of the Pattern perspective.

CLICK ON CHART TO ENLARGE

EWZ is facing dual resistance at (1), while in a 9-year down trend of lower highs and lower lows. The counter trend rally over the past 17-months has it testing key falling resistance. Did the counter trend reflation rally just end at dual resistance???

If EWZ b...



more from Kimble C.S.

All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David



FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>