16th May 2006 Glad I didn't buy today. Everything is red again. Looks like it will be the third consecutive day of falls in the FTSE. Lessons learnt: a) always watch the prices in the morning, around 10 I'd say. Because when it starts to look green, you want to be there as soon as you can to maximise the gain on the upswing. b) Again, nobody knows anything. The analysts say that mining will grow because of demand from India and China, yet what's the first thing that they drop when there's a hint of a slowdown: mining. c) If you're cool about it, the drop is a good time to buy. Because you know what your stocks can achieve in terms of value and they're likely to return to that value soon (unless we're talking a crash) ; because the major part of an overall drop in the markets is due to fear and uncertainty. How many times have a looked at a stock and wished I'd bought at a lower point? Well, guess what, suddenly I'm seeing those shares reach those [cheap] levels again. The hedge fund thing. Nobody knows how to hedge - and even if you do, you have to be very conservative consistently to not lose in the long term. Hedge traders are not far from being standard equity traders only with the higher commission and profit share. If you were in the game, you'd operate as an equity house but call yourself a hedge fund - the difference being the Terms and Conditions you'd have to fulfil for the FSA to allow you to call yourself a hedge fund. |
