A question from Muntazir who has left a new comment on your post "The Perfect Trade?":Is it ok to buy XEG now.
Thanks
Monty
Answer:I would avoid the XEG (TSX Energy) because it is currrently under-performing the XIU (TSX60 Index) - The problem here is the XEG is a bad mix of energy trusts, O&G producers, integrated and oilfield services co's. I am now only interested in the oilfield service co's so some stock picking is needed
Bill Carrigan
Monday, January 18, 2010
Sunday, January 17, 2010
Seasonality, fact or Folklore?
I do not follow seasonality because from past experience I find in a bull market seasonality will have you buy - sell higher - and buy back even higher. In a bear market seasonality will have you sell - buy lower - and sell even lower.
Investing in platinum: According to Brooke Thackray and his book entitled, “Thackray’s 2009 Investor’s Guide” he notes that platinum has a period of seasonal strength from the end of December to the end of May. The trade has been profitable in 17 of the past 22 periods. Average gain per period was 8.3%. Question; how could a simple rule work so well for so many? The answer depends on the window of time you select to study the results. I selected the great bull advance from December 2001 to May 2008.
There were 14 trades with a total return of 172% (excluding trading costs) and a buy-and-hold netted 180%.
The problem is that few investors will stick to any model when over time, it stops working and with the big platinum calls such as the May 2001 and May 2008 “sells” being few and far between. One could also argue that in May 2008 you could have sold anything and be correct. Also investor glee with the sell-May 2008 and buy Dec 2008 call would have turned sour with the latest sell-May 2009 and buy December 2009 call.
At the moment the fact-or-folklore question needs more study – so over the next few weeks let us audit a few more seasonal trades before May when we all go away.
Investing in platinum: According to Brooke Thackray and his book entitled, “Thackray’s 2009 Investor’s Guide” he notes that platinum has a period of seasonal strength from the end of December to the end of May. The trade has been profitable in 17 of the past 22 periods. Average gain per period was 8.3%. Question; how could a simple rule work so well for so many? The answer depends on the window of time you select to study the results. I selected the great bull advance from December 2001 to May 2008.
There were 14 trades with a total return of 172% (excluding trading costs) and a buy-and-hold netted 180%.
The problem is that few investors will stick to any model when over time, it stops working and with the big platinum calls such as the May 2001 and May 2008 “sells” being few and far between. One could also argue that in May 2008 you could have sold anything and be correct. Also investor glee with the sell-May 2008 and buy Dec 2008 call would have turned sour with the latest sell-May 2009 and buy December 2009 call.
At the moment the fact-or-folklore question needs more study – so over the next few weeks let us audit a few more seasonal trades before May when we all go away.
Thursday, January 14, 2010
My buddy Weizhen Tang
I met Weizhen Tang back in 1999 in the Toronto offices of a small investment dealer owned by Ken Norquay. This was long before Tang billed himself as "the Chinese Warren Buffett" and “The King of 1% Weekly Returns.” I was recently surprised to learn Wiezhen remembered me on page 51 of his book “The Chinese Warren Buffett.”
Now according to the business media the Ontario Securities Commission (OSC) first raised allegations last March that Tang may have been operating a Ponzi scheme worth as much as $60 million (U.S.). Tang reportedly told investors that money from new investors was being used to pay out existing investors. Additional charges include securities fraud, unregistered trading in securities, illegal distributions of securities and making prohibited undertakings with the intention of effecting trades in securities, which were alleged to have taken place between Jan. 1, 2006, and March 31, 2009. The province's Securities Act states that no person or company can give written or oral representations on the future value or price of a security.
Well, here are the facts surrounding my knowledge of Tang. Firstly Tang’s book is filled with fantasy. This is assuming the misinformation and lies contained in the chapter “The Collapse of the Stock Market” are replicated throughout the book.
The reality is Tang never worked for the firm – he was never licensed or approved by any regulative authority. Tang had no industry accreditation having never written and passed any industry exams.
The reality is Tang was a terrible day trader than and apparently - still a terrible day trader today. Unfortunately Tang is a legend in his own mind. He believes his own lies. Tang is probably a sociopath, also known as an Antisocial Personality Disorder, a member of a diagnostic group known as ‘Personality Disorders‘. Without question, an Antisocial Personality is well aware they are telling a lie and in fact, lie very purposefully in an attempt to manipulate others, deny personal responsibility, escape the consequences of their behavior, or place them at some advantage. In his book he rambles on about being persecuted by clients who lost money and by “restrictions and pressure” from “government authorities.” Telling a lie is always an option for an Antisocial Personality, especially when their behavior has caused them some social or personal difficulties. Their lies range from daily excuses and promises, to complex schemes and scams that are based on a series of lies and deceptions.
I don’t think Tang ran a Ponzi scheme - he simply lost all the money in trading.
Unfortunately there no rules in place that can stop Tang from doing it all again, he will just operate under another name (he used is wife’s license back in the late 1990’s). Your only defense as a private investor is to understand – if it’s too good to be true, it isn’t true. And that’s the truth
Now according to the business media the Ontario Securities Commission (OSC) first raised allegations last March that Tang may have been operating a Ponzi scheme worth as much as $60 million (U.S.). Tang reportedly told investors that money from new investors was being used to pay out existing investors. Additional charges include securities fraud, unregistered trading in securities, illegal distributions of securities and making prohibited undertakings with the intention of effecting trades in securities, which were alleged to have taken place between Jan. 1, 2006, and March 31, 2009. The province's Securities Act states that no person or company can give written or oral representations on the future value or price of a security.
Well, here are the facts surrounding my knowledge of Tang. Firstly Tang’s book is filled with fantasy. This is assuming the misinformation and lies contained in the chapter “The Collapse of the Stock Market” are replicated throughout the book.
The reality is Tang never worked for the firm – he was never licensed or approved by any regulative authority. Tang had no industry accreditation having never written and passed any industry exams.
The reality is Tang was a terrible day trader than and apparently - still a terrible day trader today. Unfortunately Tang is a legend in his own mind. He believes his own lies. Tang is probably a sociopath, also known as an Antisocial Personality Disorder, a member of a diagnostic group known as ‘Personality Disorders‘. Without question, an Antisocial Personality is well aware they are telling a lie and in fact, lie very purposefully in an attempt to manipulate others, deny personal responsibility, escape the consequences of their behavior, or place them at some advantage. In his book he rambles on about being persecuted by clients who lost money and by “restrictions and pressure” from “government authorities.” Telling a lie is always an option for an Antisocial Personality, especially when their behavior has caused them some social or personal difficulties. Their lies range from daily excuses and promises, to complex schemes and scams that are based on a series of lies and deceptions.
I don’t think Tang ran a Ponzi scheme - he simply lost all the money in trading.
Unfortunately there no rules in place that can stop Tang from doing it all again, he will just operate under another name (he used is wife’s license back in the late 1990’s). Your only defense as a private investor is to understand – if it’s too good to be true, it isn’t true. And that’s the truth
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