Posts Tagged ‘Education’

The Greatest Traders

The Greatest Traders

Courtesy of Pivotfarm writing at Zero Hedge 

Moneybag

What separates the 10% that make money from the 90% that don’t?

10,000 hours.

In his recent book Outliers: The Story of Success, Malcolm Gladwell describes the 10,000-Hour Rule, claiming that the key to success in any cognitively complex field is, to a large extent, a matter of practicing a specific task for a total of around 10,000 hours. 10,000 hours equates to around 4hrs a day for 10 years. For some reason most people that ‘try their hand’ at trading view it as a get rich quick scheme. That in a very short space of time, they will be able to turn $500 into $1 million! It is precisely this mindset that has resulted in the current economic mess, a bunch of 20-somethings being handed the red phone for financial weapons of mass destruction. The greatest traders understand that trading much like being a doctor, engineer or any other focused and technical endeavor requires time to develop and hone the skill set. Now you wouldn’t see a doctor performing open heart surgery after 3 months on a surgery simulator. Why would trading as a technical undertaking require less time?

Trading success, comes from screen time and experience, you have to put the hours in!

Education, education, education.

The old cliché touted by politicians when they can’t think of anything clever to say to their audience. The importance of education to success in trading cannot be placed on a high enough pedestal. You have to learn to earn, the best traders work obsessively to…
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8 Reasons the US has Become a Nation of Slaves

8 Reasons the US has Become a Nation of Slaves

Courtesy of Damien Hoffman at Wall St. Cheat Sheet

[For a risk-free trial to Wall St. Cheat Sheet click here.]

These days, the idea of retirement seems like either a bad joke or a utopian fantasy. I’ve already covered some main reasons the US economy is screwed, but here are 8 reasons why the US has become a nation of indentured servants:

1) Stagnant wages

Are you partying like it’s 1999? That’s because you’re earning money like it’s 1999. Over the past 11 years, the median household income has been flat as a corpse’s pulse.

If everything gets more expensive over time but no one gets a raise, workers will afford less goods and services. This means people will either work the same amount for less stuff, or work harder for the same stuff. Either way, it’s a shitty deal.

2) Dual-income Nation

We’re a country of family values, right? Wrong. We’ve built an economy that requires two incomes to attain middle class status. It has even become a luxury for one spouse to stay home to raise children! (But that’s more of an existential issue …)

The graph above illustrates one of the most basic tenets of economics: if there is twice as much cash floating around the economy, the cost of things simply rises in direct proportion. In this case, adding an extra worker per household has increased household income. As a result, sellers of houses, child care, health insurance, cars, etc. have upped their prices to take more of our dollars.

3) Energy and Food Inflation

Remember $4 gas? Well, we’re back to $3 (double last year’s low). Every time a car ride costs more, that’s less money left over for things other than getting from point A to point B. As oil prices continue to rise with global demand (and diminishing supply), we will spend more hours working just to get to and fro.

Food is the ultimate necessity. So, when prices rise, there’s not much to do if you don’t care for the taste of cat food. It’s harder to notice 20-30% food inflation when a $2 item jumps to $2.40. But


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Why Teachers’ Unions Matter

Unions have become a divisive issue in the financial bloggosphere, so in the interest of presenting both sides, here’s an article supporting Unions. Another article showing a flip side to prevailing anti-Union wrath is Zero Hedge‘s Labor Unions Preparing To Take Goldman Sachs To Task, Push For Transaction Tax In Upcoming Widespread Rallies. – Ilene  

Why Teachers’ Unions Matter

Nurses, Teachers, Students And Firefighters Protest Schwarzenegger Event

By SHAMUS COOKE writing at CounterPunch 

Nowadays a newspaper cannot be opened — or a TV turned on — without one being subjected to anti-teacher misinformation. The anti-teacher hysteria looks diverse on the surface, but underneath, this public controversy seeks to dislodge teachers unions: the right-wing trashes teachers’ unions outright, while the “liberal” media takes a more subtle, sophisticated approach, blaming the state of public education on “bad teachers” who must be fired and replaced. Both styles are the same in essence. 

The bi-partisan goal is to undermine and dismember public education, so that public funds may be instead channeled into paying debts racked up by multiple wars and corporate bailouts. Also, as public education is gutted, rich investors parasitically benefit from it by opening for-profit “charter schools,” curriculum corporations, or the bevy of new companies that "certify" teachers for a fraction of the cost or time of universities, ready to serve at the new corporate McEducation institutes.

Obama’s Race to the Top campaign enshrines these odious goals into governmental policy, picking up where Bush’s anti-teacher union policies left off, and racing frantically in the same direction, to the bottom. 

The schools that Bush’s No Child Left Behind labeled as “failures” are to be shut down under Obama’s Race to the Top. These schools are almost entirely in poor neighborhoods, where the social disease of poverty is an easy predictor of a child’s poor test scores.

But Obama ignores this obvious fact and blames poor grades and test scores on the teachers, exclusively. 

Thus, Obama cheered when every teacher at a Rhode Island “failing” high school was fired. He praised the past closures of dozens of public schools in both Chicago and New Orleans as examples for others to follow. Indeed, Detroit and Kansas City each have plans to close dozens of schools, while California is set to fire thousands of teachers. Under Obama’s plan, federal money is awarded to states that fire the most "bad" teachers and close the most “failing” public schools. 

Charter schools…
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University of California Campus Erupts In Riots; Student Loan Scam Drives Up Cost Of Education; Expect More Riots

University of California Campus Erupts In Riots; Student Loan Scam Drives Up Cost Of Education; Expect More Riots

Courtesy of Mish 

Inquiring minds are reading about student riots at the University of California.

Students at the University of California’s flagship Berkeley campus took to the streets on Friday night, vandalizing university buildings, burning trash cans and clashing with police in the latest expression of frustration over cuts to the educational budget in California.

In November, the University of California Board of Regents voted to raise tuition by 32 percent. At the same time, professors were asked to take pay cuts or be furloughed, classes were eliminated and class size increased. Protests erupted across the University of California system, particularly at UC Davis and UCLA.


Student Loan Defaults Soar

Please consider Defaults on student loans rising

Every year, tens of thousands of college students and graduates stop making payments on their student loans.

For more than a decade, that loan-default rate was in decline because the federal government toughened penalties for schools with high shares of defaults. Now, the rate is increasing again and not just because of the economy.

The problem is particularly acute in Arizona, which has the nation's highest overall default rate on federal student loans: 9.8 percent in fiscal year 2007, the latest figures available.

But more than default rates, it is the high levels of debt that are provoking alarm among consumer advocates. That has heightened scrutiny of for-profit schools.

Tuition at for-profit schools can easily top $10,000 a year. The average loans for a student who earned a bachelor's degree totaled $32,650 in the 2007-08 school year, compared with $17,700 at public universities. At community colleges, the average for two-year degrees was $7,125.

In Arizona, for-profit schools are booming. They have more than doubled the number of students they serve in the past five years, and


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Study: Option Collar Strategy Beats Buy and Hold by 65%

From the Options Industry Council:

The results of a new study examining the use of options in a collar strategy (both active and passive implementations) on the PowerShares QQQ™ exchange-traded fund (ETF) show it provides superior returns to the traditional buy and hold strategy while reducing risk by almost 65%.

The Options Industry Council (OIC) is pleased to note the study reaffirms the risk management potential of equity options, finding that during the entire 10-year study period, including the sub-periods around the tech bubble and credit crisis, collars significantly outperformed the QQQ, providing much needed capital protection.

Loosening Your Collar: Alternative Implementations of QQQ Collars,” by Edward Szado and Thomas Schneeweis, looked at data from March 1999 to May 2009. It concluded that over the entire 122 month period the passive collar returned almost 150%, while the QQQ lost one-third of its value. The active collar outperformed both strategies and returned more than 200%. 

Additionally, the study simulated a collar on a small-cap mutual fund. The return of the active mutual fund collar was four times the return of the fund, while the standard deviation was about one-third lower. The study was conducted by the Isenberg School of Management’s Center for International Securities and Derivatives Markets (CISDM) at the University of Massachusetts.

Typically, you want to employ a collar to protect a dividend-paying stock from losing value.  We employed this strategy successfully in our last $100K Virtual Portfolio with KMP, who pay a healthy 7.6% dividend but had fallen 35% in 6 months in March.  As we were re-entering the position back at $40 (with a 10% dividend), we were happy to be in it just for the premiums

The study makes for a very interesting read.  We do not employ full collars very often but they are a very useful strategy to know as you can "lock down" your positions when the markets get rough and it's also a great way to vacation-proof your virtual portfolio without having to alter your existing positions.  Also, as noted in the study, an active management approach – like the one we employ in our buy/writes (rolling the short positions along) leads to the greatest benefits over time.  As the OIC says about the strategy:

This strategy offers the stock protection of a put. However, in…
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“Recession’s Over, Recovery Underway”: What’s Missing in Action

"Recession’s Over, Recovery Underway": What’s Missing in Action

Courtesy of Charles Hugh Smith, Of Two Minds

The mainstream media is gleefully hyping "the recession is over, the recovery is underway." Nice, except for everything that’s missing in action.

"The recession is over, the recovery is underway." Exactly what will be driving this fabulous "recovery"? Let’s check in on the usual forces which have powered previous recoveries:

1. Autos/vehicles: missing in action (MIA). Annual sales have plummeted from 17 million vehicles a year to about 9 million a year, and the U.S. probably contains about 30 million surplus/lightly used vehicles ( a number snagged from economist David Rosenberg’s latest report). Modern vehicles can easily last 15-20 year, so the "need" to replace vehicles is rather low. Actual "necessary" replacement might require as few as 5 million vehicles a year.

With unemployment at 16%, assets down by $10 trillion and the FIRE economy (finance, real estate and insurance) in disarray, where does anyone think the consumer borrowing firepower will come from to finance an extra 8 million vehicles a year?

2. Housing/real estate: missing in action (MIA). Let’s see: new home sales down from 1.4 million a year to 350,000 a year and the headlines are screaming "recovery in housing" even as house prices are down 50% from the bubble peak and still declining. The Case-Shiller index just came in at a year-over-year decline of 17% and the market is cheering because it’s a few tenths of a percent "better than expected."

The U.S. has 18.7 million vacant homes and even if you bulldoze a couple million in shrinking rust-belt cities we still have 16.7 million vacant dwellings, plus thousands more foolishly being constructed every year.

Furniture sales and auctions of old furniture are in the ditch; ditto draperies, carpeting, hardwood flooring, etc. etc., much of which is still manufactured in the U.S. No wonder the manufacturing sector is still contracting as well.

The bubble in commercial real estate has yet to pop but the needle is currently being inserted into the balloon. Too many malls, too many strip malls, too many office towers, too many CRE buildings everywhere.

3. FIRE economy: missing in action (MIA). Finance, real estate and insurance were the boomtown industries in the housing bubble. They’re diminished and will never come back; the consumer must save now to avoid a retirement in…
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Investing Education Advice if You’re New to Options Trading

Investor EducationBy Travis W of PursuingWealth.com

Finding investing education advice for stock options trading can be a frustrating endeavor at times. New traders often share with me that it feels like the options trading community is a very tight-lipped community with a high price of admission. I’ve been through that process so I’d like to offer you some advice.

Learning to invest your own money is a journey, not a destination. It takes time, patience, and education. It’s a proactive journey for those who no longer desire to be a victim of the so called experts.

Over the years I’ve made enough mistakes and have had enough successes to know that the ability to master your money is not something that just happens. It takes a bit of work on your part.

Increasing your investment IQ is a key part, especially when you’re dealing with stock options. You have to find a qualified and trustworthy source for investing education. There’s quite a bit of hype out there so you have to filter out all the "noise".

You may have already searched online for information on stock options, or read a few books. Most people are drawn to options trading by the potential to create large sums of money in a short period of time.  Here is my forewarning; having a great deal of head knowledge about stock options doesn’t necessarily mean you’ll be a great trader. It’s going to take some real world practice.

Most of what I’ve learned about investing did not come from a classroom or a book; it came from real world experiences. I found people who were willing to give me unbiased investing education and I applied the knowledge through practice and a bit of trial and error.

Financial RoadmapInvesting Education is your Financial Road Map

Investing education has a purpose in our lives like a map has a purpose to a traveler. A map can take you from point "A" to point "B" when you’re traveling. Investing education can take you from school loans, credit card debt, and no budget to debt-free with money to burn. It’s your financial map so to speak.

You could try to figure out options trading on your own, but if you’re smart and value your time you’ll find a map that can get you to your destination quicker.  It’s extremely rare for me to meet someone who doesn’t want…
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Vacation-Proof Your Virtual Portfolio

A couple of years ago, Option Sage (Gareth) and I put up a very popular article titled "Vacation-Proof Your Virtual Portfolio."

In it we discussed several strategies for hedging existing positions, moving them into neutral positions ahead of a time when you would be going away and not able to keep your eye on the markets.  As we cashed out last week, it hasn't been much of an issue coming into this long weekend but some of you still have long postiions that need protecting and Sage has been kind enough to provide us with access to a free on-line seminar on the subject through his educational platform at www.MarketTamer.com.   

I don't recommend many services but Sage was an original member who went on to write many of our educational posts over the years and went on to develop an on-line trading education system that is very, very good for learning stock and options trading.  PSW members get a special offer of $99/month, which is 1/3 the going rate AND he will give you that $99 back if you are not satisfied after the first month!  So check out the link above, there are 3 free lessons there and read through the article.  If you plan on going away with positions open this summer in this crazy market – I think it will be time well spent…

Those of you who know Sage have probably already linked over but for those of you who didn't get a chance to meet him when he was on-line with us all the time, here's a copy of Market Tamer's recent press release, which tells you a bit about Gareth and the company he's been building:

Taming The Market
 
A shockingly simple yet amazingly powerful concept has been ignored by major hedge funds, mutual funds, and retail traders alike.  On their quest to outperform the market, Wall Street's best often get sucked into a single style of investing or trading:  long only, long/short, distressed, diversified and the list goes on.  They use a single approach to exploit a changing market.  And often a single approach works – for a while.  Bill Miller of Legg Mason was regarded as one of the stars on Wall Street until his virtual portfolio…
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Phil's Favorites

5 reasons the coronavirus hit Italy so hard

 

5 reasons the coronavirus hit Italy so hard

A nursing home resident in Rome is moved to a hospital. Mauro Scrobogna/LaPresse via AP

Sara Belligoni, University of Central Florida

Italy is one of the nations worst hit by the global coronavirus pandemic. As a scholar in the field of security and emergency management who has studied and worked in Italy, I have determined that there are at least five major reasons why the country is suffering so much.

1. Lots of old people

Italians have the ...



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Biotech/COVID-19

5 reasons the coronavirus hit Italy so hard

 

5 reasons the coronavirus hit Italy so hard

A nursing home resident in Rome is moved to a hospital. Mauro Scrobogna/LaPresse via AP

Sara Belligoni, University of Central Florida

Italy is one of the nations worst hit by the global coronavirus pandemic. As a scholar in the field of security and emergency management who has studied and worked in Italy, I have determined that there are at least five major reasons why the country is suffering so much.

1. Lots of old people

Italians have the ...



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Zero Hedge

Stocks Bid Into Month-End Despite Americans' Unprecedented Scramble For Cash

Courtesy of ZeroHedge View original post here.

Amid an ever-escalating guess at the size of pension fund re-allocations funds (latest we saw was $150 billion) into month-end, both bonds and stocks were bid early on today, but as the day wore on, bonds weakened as stocks gained (driven by record IG issuance-driven rate-locks)...

Source: Bloomberg

But while some are rebalancing into stocks, the scramble for cash among average Americans has almost never been more panicky...



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Kimble Charting Solutions

Tech Testing 9-Year Support, With Fear Levels At 2009 Highs!

Courtesy of Chris Kimble

Is an important Tech Index sending a bullish message to investors? It is making an attempt!

Does that mean a low in this important sector is in play? Humbly it is too soon to say at this time!

This chart looks at the Nasdaq Composite Index over the past 25-years on a monthly basis.

The index has spent the majority of the past 9-years inside of rising channel (1), as it has created a series of higher lows and higher highs. It created bearish reversal patterns in January & February as it was kissing the underside of the top of the channel and...



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Insider Scoop

With Everybody Stuck At Home, Investor Conferences Are Going Virtual

Courtesy of Benzinga

With the world at a COVID-19-induced standstill, many conference organizers have either gone online (Benzinga is one of them) or had to cancel upcoming events altogether. There is no clear timetable on how much longer we will be in this state.

Publicly traded companies are already limited in wh...



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Members' Corner

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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The Technical Traders

These Index Charts Will Calm You Down

Courtesy of Technical Traders

I put together this video that will calm you down, because knowing where are within the stock market cycles, and the economy makes all the difference.

This is the worst time to be starting a business that’s for sure. I have talked about this is past videos and events I attended that bear markets are fantastic opportunities if you can retain your capital until late in the bear market cycle. If you can do this, you will find countless opportunities to invest money. From buying businesses, franchises, real estate, equipment, and stocks at a considerable discount that would make today’s prices look ridiculous (which they are).

Take a quick watch of this video because it shows you ...



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Chart School

Cycle Trading - Funny when it comes due

Courtesy of Read the Ticker

Non believers of cycles become fast believers when the heat of the moment is upon them.

Just has we have birthdays, so does the market, regular cycles of time and price. The market news of the cycle turn may change each time, but the time is regular. Markets are not a random walk.


Success comes from strategy and the execution of a plan.















Changes in the world is the source of all market moves, to catch an...

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ValueWalk

Entrepreneurial activity and business ownership on the rise

By Jacob Wolinsky. Originally published at ValueWalk.

Indicating strong health of entrepreneurship, both entrepreneurial activity and established business ownership in the United States have trended upwards over the past 19 years, according to the 2019/2020 Global Entrepreneurship Monitor Global Report, released March 3rd in Miami at the GEM Annual Meeting.

Q4 2019 hedge fund letters, conferences and more

The Benefit Of Entrepreneurial Activity ...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.