Market Timing Can't Be Done? Well, That's What Market-Makers Do Every Day [View article]
polly,
my understanding of SA's policy is that articles containing only, or based largely on technical analysis will no longer be accepted for publication. The use of that style, in support of a largely fundamental or behavioral analysis presentation probably will be allowed.
The impression I have is that there is little enthusiasm in the SA management for any reliable evidence of investment decision support resulting from the use of technical analysis.
As may be inferred from my response to aarc above, that has also been my posture, although I'm quite willing to be convinced otherwise, if it is possible. How useful a tool it actually may be remains to be indicated.
We have substantial specific evidences of productive entry and exit guidances as a result of over seven million forecasts made daily (ex-ante) during more than a decade on 2000+ stocks and ETFs. So naturally we believe that ours is a better approach.
Market Timing Can't Be Done? Well, That's What Market-Makers Do Every Day [View article]
investinginvestor,
If you think you can compete in the milli/nano-second world, then give it a shot. But you probably will find very little company among either contributors to or readers of Seeking Alpha. These are folks who live in, and profit from, far longer time horizons, with far larger chunks of gain than are offered anywhere in the HFT environment. Such opportunities for more ordinary investment pursuits exist in abundance, well beyond the reach or influence of HFT.
When honestly pursued HFT can assure market liquidity in large volume, but it usually comes in costs of a decimal fraction of a penny per share. Big-money funds have needs to be aware of the potentials when share volume in tight markets are involved. Lots of other more conventional trades, both professional and individual, have larger objectives and are of a type that move prices in meaningful amounts over time periods that can be recognized and appreciated.
The HFT game is a very expensive one to play, involving lots of communications equipment and compute power, along with high-priced legal compliance resources. Seeking Alpha's community typically chooses to put its capital to work elsewhere.
Equity investing is a dangerous game, so be prepared to protect yourself at all times. Especially at tiny, rapidly-repeated ones where other competitors can put one at a fatal disadvantage.
Good luck in your continuing education. You may need it.
Market Timing Can't Be Done? Well, That's What Market-Makers Do Every Day [View article]
aarc,
I understand your need to find some way to promote technical analysis, given that Seeking Alpha has now restricted that form of stock forecasting from its contributed analytical articles, and limited it to the blogosphere.
Since my continuing exposure to your art form is infrequent, I would like to add to my knowledge of what may in the past few years have developed to lend some credibility to the general field.
Over the years I have been impressed by the virtually total absence of any hindsight-proof studies offering evidence of how "technical analysis" has provided any investment advantage over even long-term buy-and-hold results for meaningful time periods involving statistically-significant numbers of stocks or ETFs.
Can you please direct me to any such peer-evaluated studies?
Market Timing Can't Be Done? Well, That's What Market-Makers Do Every Day [View article]
investinginvestor,
I suggest you do a little relevant research before so liberally spewing poorly-founded opinions. If you start with my profile on SA, you will find that in my 50+ years of investment experience, much of it as a CFA, my understanding and involvement with arbitrage and the people actively engaging in it is extensive. For the benefit of SA readers I would suggest that they check out your SA profile as a comparison, as I have done.
The Coming Price War Between Crude Oil And Natural Gas [View article]
Brian G,
Thanks for the reminder that politics is an important part of how this will all play out. My notion is that the quantities of NG available to be liberated domestically at costs likely to be profitable in domestic markets, once delivery infrastructure is in place, will ultimately be a consumer benefit.
Meanwhile, the spread of extraction technology advances to other world consuming areas will convert many of them into producing sources and will soon enough end the existence of double-digit NG export prices.
Not overnight, but it likely can happen in only a few years, and the US's NG patrimony can't be dissipated to any huge degree.
The Coming Price War Between Crude Oil And Natural Gas [View article]
ron,
thanks for adding to our sense of how extensively this worldwide conversion has proceeded. It encourages my belief that similar developments are ultimately inevitable here. But we better expect strong resistance from some of the smartest business executives in the world. In the process they will get the most out of it that can be had.
Still, there is major economic benefit for the US, largely due to the technological skills of the energy extraction community here.
Hot Money Makes Apple #1 Concern Of The Market-Makers [View article]
Tippygod,
Thanks for your comment and questions.
The incremental capital calculation is made clear in the prior article linked to in the very early part of this one. The notion is hardly original, it has been around for years. But it only tells us what has already happened, even as recently as yesterday.
That data's inability to provide any reliable inference about what may happen tomorrow is the major weakness of most technical analysis that looks mainly at events of the past. Instead, we use a form of behavioral analysis that looks at the intelligent anticipatory (forward-looking) actions of well-informed investment professionals, the market-makers.
They must put their firm's capital at short-term risk in order to earn their million-dollar-a-year compensations, so they hedge those risks. Their presence in those hedging arenas is so intense that they dominate the prices of the risk insurance being bought and sold there. The public has little to no influence there, particularly on items like AAPL.
What the market-makers are willing to pay, out of what they would otherwise pocket from the trade spreads, tells quite clearly what their concerns are, both long and short, about where and how far prices may go. They are not always right, but their profit batting average is miles ahead of the public's.
So we play the odds and provide some guidance for our readers as to how well the MMs have been able to score in the past from prior before-the-fact forecasts that are as extreme as what we see today. And yes, as I indicated at the end of the article, we will be exploring with you what may be down the road for several of Apple's competitors, at least as the market-makers see it.
Why You Need A Sell Target For Each Stock Held - And How To Set Them [View article]
LeftBanker,
In a dangerous world as rife with misinformation and disinformation as stock investing, credibility becomes a precious dimension. No one in this business, except Madoff, ever batted 1.000. So here is my scorecard on all buy recommendations made in the 30 of my semimonthly Block Traders' ETF Monitor investment letters published on Forbes.com since the beginning of 2012.
There have been 182 such buy recommendations made, all with unchangeable sell targets set at the top of the forecast price range at the time, and fixed-date limits on holding patience, each at 6 months from date of the forecast.
Of the 182 buys, 134 have been profitable to date, and 48 have been timed out at a loss, a "batting average" of .705. Typical "star" hedge fund managers range from .550 to .650, I am told.
The per-day-invested rate of gain of the profitable positions has been 10% greater than the per-day loss rate, which when combined with the large proportion of winners has produced an annual net rate of gain of +20%. The annual rate of gain for the S&P500 during the same period has been at +17%, so we show a respectable 300 basis point advantage.
The very reason we publish behaviorally-derived expectations information from market-making investment professionals the way we do is to give individual investors a sense of how well or how badly the best players in this serious game have been able to do in guessing at the future on a stock-by-stock basis. That is a quality of investment information not to be found anywhere else.
Just FYI, my firm managed institutional equity investments for over a decade at the hundred-million dollar scale. The trades were handled by an associated Boston RIA firm whose trading desk was run by Harry Markopolis, the Madoff whistleblower. He understands what we do and stands ready to verify its authenticity and usefulness.
What you choose to do with what we can provide is up to you.
Why You Need A Sell Target For Each Stock Held - And How To Set Them [View article]
Paul,
Delighted to have you aboard. While we are converting our former institutionally-oriented site, blockdesk.com, to be of better service for individual investors, I'll keep on offering market-maker insights by articles like those seen recently. Stay tuned.
Why You Need A Sell Target For Each Stock Held - And How To Set Them [View article]
Chester,
you are absolutely right that you and I are not such great stock "pickers" (timers, actually) that we can correctly time a switch as C.Rick suggests. That is exactly why we lean so heavily on the pros whose job it is to have good insight into the near-term prospects of lots of such stocks, the market-makers.
Most favorite, reliable, dividend-paying stocks of interest are held importantly by the MMs big-money-fund clients. Their needs to adjust those portfolio holdings from time to time urges the MMs to develop a keen sense of the stock's price prospects, both to the upside and the down. That becomes a big help in our putting active investments appropriately into stocks where we can compound both dividends paid, and capital gains captured.
In most cases, dividends from the blue-chips are going to be paid on schedule, regardless of how under-priced or overvalued the market may have pushed the stock's price. But for many stocks their price swings during a year are many times the size of all the dividends paid. Either avoiding those price moves on the downside, or capturing them on the upside between dividends usually makes the effort worthwhile, even if a dividend gets missed here and there in the process. Just look at the gain as a special dividend.
The trick is to be able to do it reliably enough so that the winning actions significantly outweigh the losing ones. That is why we keep careful track of what proportion of the MMs' forecasts are likely to be winners. Not just their overall batting averages, but made specific to the balance between upside and downside prospects that they are seeing now, in comparison to similar ones seen in the past.
We daily update our actuarial tables to show how well the MMs have understood the prospects, at all levels, for over 2,000 stocks. Typically they show good ODDS of success with dividend-payers at key points of market valuation, with sizeable PAYOFFS when executed in time-disciplined constraints.
Your comment indicates you are not opposed to changing horses when a better one can be found to ride. With the MMs help, you should be able to improve your investment results. I hope so. We soon should have things ready to be of assistance.
Why You Need A Sell Target For Each Stock Held - And How To Set Them [View article]
Paul,
Thanks for the catch. My bad, the low forecast in the picture is actually $75+, while the bottom figure in that stack of numbers is $85+, which was the "price now" quote.
In answer to your info source question, takeone1 has the partial answer. Blockdesk.com is in transformation from serving institutional investors to being aimed more appropriately now (in my semi-retirement) to individual investors, We hope to make it available soon, but in the meantime we will continue to provide info on specific stocks we see ones that should offer favorable odds on attractive price-gain payoffs in time-disciplined periods.
I'll try to proofread more carefully next (each) time, and always welcome reader assistance to clarify. Thanks again for your help.
Market Timing Can't Be Done? Well, That's What Market-Makers Do Every Day [View article]
my understanding of SA's policy is that articles containing only, or based largely on technical analysis will no longer be accepted for publication. The use of that style, in support of a largely fundamental or behavioral analysis presentation probably will be allowed.
The impression I have is that there is little enthusiasm in the SA management for any reliable evidence of investment decision support resulting from the use of technical analysis.
As may be inferred from my response to aarc above, that has also been my posture, although I'm quite willing to be convinced otherwise, if it is possible. How useful a tool it actually may be remains to be indicated.
We have substantial specific evidences of productive entry and exit guidances as a result of over seven million forecasts made daily (ex-ante) during more than a decade on 2000+ stocks and ETFs. So naturally we believe that ours is a better approach.
But let's see what the TA crowd can come up with.
Thanks for your interest.
Peter
Market Timing Can't Be Done? Well, That's What Market-Makers Do Every Day [View article]
If you think you can compete in the milli/nano-second world, then give it a shot. But you probably will find very little company among either contributors to or readers of Seeking Alpha. These are folks who live in, and profit from, far longer time horizons, with far larger chunks of gain than are offered anywhere in the HFT environment. Such opportunities for more ordinary investment pursuits exist in abundance, well beyond the reach or influence of HFT.
When honestly pursued HFT can assure market liquidity in large volume, but it usually comes in costs of a decimal fraction of a penny per share. Big-money funds have needs to be aware of the potentials when share volume in tight markets are involved. Lots of other more conventional trades, both professional and individual, have larger objectives and are of a type that move prices in meaningful amounts over time periods that can be recognized and appreciated.
The HFT game is a very expensive one to play, involving lots of communications equipment and compute power, along with high-priced legal compliance resources. Seeking Alpha's community typically chooses to put its capital to work elsewhere.
Equity investing is a dangerous game, so be prepared to protect yourself at all times. Especially at tiny, rapidly-repeated ones where other competitors can put one at a fatal disadvantage.
Good luck in your continuing education. You may need it.
PFW
Market Timing Can't Be Done? Well, That's What Market-Makers Do Every Day [View article]
I understand your need to find some way to promote technical analysis, given that Seeking Alpha has now restricted that form of stock forecasting from its contributed analytical articles, and limited it to the blogosphere.
Since my continuing exposure to your art form is infrequent, I would like to add to my knowledge of what may in the past few years have developed to lend some credibility to the general field.
Over the years I have been impressed by the virtually total absence of any hindsight-proof studies offering evidence of how "technical analysis" has provided any investment advantage over even long-term buy-and-hold results for meaningful time periods involving statistically-significant numbers of stocks or ETFs.
Can you please direct me to any such peer-evaluated studies?
Respectfully yours,
Peter F. Way, CFA
Market Timing Can't Be Done? Well, That's What Market-Makers Do Every Day [View article]
Cheers!
Thanks for your insight.
Peter
Market Timing Can't Be Done? Well, That's What Market-Makers Do Every Day [View article]
I suggest you do a little relevant research before so liberally spewing poorly-founded opinions. If you start with my profile on SA, you will find that in my 50+ years of investment experience, much of it as a CFA, my understanding and involvement with arbitrage and the people actively engaging in it is extensive. For the benefit of SA readers I would suggest that they check out your SA profile as a comparison, as I have done.
Peter F. Way, CFA
The Coming Price War Between Crude Oil And Natural Gas [View article]
Thanks for the reminder that politics is an important part of how this will all play out. My notion is that the quantities of NG available to be liberated domestically at costs likely to be profitable in domestic markets, once delivery infrastructure is in place, will ultimately be a consumer benefit.
Meanwhile, the spread of extraction technology advances to other world consuming areas will convert many of them into producing sources and will soon enough end the existence of double-digit NG export prices.
Not overnight, but it likely can happen in only a few years, and the US's NG patrimony can't be dissipated to any huge degree.
Thanks again for your observation.
Peter
The Coming Price War Between Crude Oil And Natural Gas [View article]
thanks for adding to our sense of how extensively this worldwide conversion has proceeded. It encourages my belief that similar developments are ultimately inevitable here. But we better expect strong resistance from some of the smartest business executives in the world. In the process they will get the most out of it that can be had.
Still, there is major economic benefit for the US, largely due to the technological skills of the energy extraction community here.
Thanks again for a major contribution.
Peter
The Coming Price War Between Crude Oil And Natural Gas [View article]
my friend Charley Maxwell, a renowned street oil analyst told me that a few years ago that is what many "conventional" drillers thought, too.
regards,
pfw
Hot Money Makes Apple #1 Concern Of The Market-Makers [View article]
Thanks for your comment and questions.
The incremental capital calculation is made clear in the prior article linked to in the very early part of this one. The notion is hardly original, it has been around for years. But it only tells us what has already happened, even as recently as yesterday.
That data's inability to provide any reliable inference about what may happen tomorrow is the major weakness of most technical analysis that looks mainly at events of the past. Instead, we use a form of behavioral analysis that looks at the intelligent anticipatory (forward-looking) actions of well-informed investment professionals, the market-makers.
They must put their firm's capital at short-term risk in order to earn their million-dollar-a-year compensations, so they hedge those risks. Their presence in those hedging arenas is so intense that they dominate the prices of the risk insurance being bought and sold there. The public has little to no influence there, particularly on items like AAPL.
What the market-makers are willing to pay, out of what they would otherwise pocket from the trade spreads, tells quite clearly what their concerns are, both long and short, about where and how far prices may go. They are not always right, but their profit batting average is miles ahead of the public's.
So we play the odds and provide some guidance for our readers as to how well the MMs have been able to score in the past from prior before-the-fact forecasts that are as extreme as what we see today. And yes, as I indicated at the end of the article, we will be exploring with you what may be down the road for several of Apple's competitors, at least as the market-makers see it.
Continued good luck with your investments,
Peter
Hot Money Makes Apple #1 Concern Of The Market-Makers [View article]
it does appear that all those things are poised to take hold. Thanks for your comment.
Peter
Why You Need A Sell Target For Each Stock Held - And How To Set Them [View article]
In a dangerous world as rife with misinformation and disinformation as stock investing, credibility becomes a precious dimension. No one in this business, except Madoff, ever batted 1.000. So here is my scorecard on all buy recommendations made in the 30 of my semimonthly Block Traders' ETF Monitor investment letters published on Forbes.com since the beginning of 2012.
There have been 182 such buy recommendations made, all with unchangeable sell targets set at the top of the forecast price range at the time, and fixed-date limits on holding patience, each at 6 months from date of the forecast.
Of the 182 buys, 134 have been profitable to date, and 48 have been timed out at a loss, a "batting average" of .705. Typical "star" hedge fund managers range from .550 to .650, I am told.
The per-day-invested rate of gain of the profitable positions has been 10% greater than the per-day loss rate, which when combined with the large proportion of winners has produced an annual net rate of gain of +20%. The annual rate of gain for the S&P500 during the same period has been at +17%, so we show a respectable 300 basis point advantage.
The very reason we publish behaviorally-derived expectations information from market-making investment professionals the way we do is to give individual investors a sense of how well or how badly the best players in this serious game have been able to do in guessing at the future on a stock-by-stock basis. That is a quality of investment information not to be found anywhere else.
Just FYI, my firm managed institutional equity investments for over a decade at the hundred-million dollar scale. The trades were handled by an associated Boston RIA firm whose trading desk was run by Harry Markopolis, the Madoff whistleblower. He understands what we do and stands ready to verify its authenticity and usefulness.
What you choose to do with what we can provide is up to you.
With polite regards,
PFW
Why You Need A Sell Target For Each Stock Held - And How To Set Them [View article]
Delighted to have you aboard. While we are converting our former institutionally-oriented site, blockdesk.com, to be of better service for individual investors, I'll keep on offering market-maker insights by articles like those seen recently. Stay tuned.
Regards,
Peter
Why You Need A Sell Target For Each Stock Held - And How To Set Them [View article]
Thanks for your very constructive reply to Chester. I have tried to add to it for his benefit. Keep up the great encouragement.
Best regards,
Peter
Why You Need A Sell Target For Each Stock Held - And How To Set Them [View article]
you are absolutely right that you and I are not such great stock "pickers" (timers, actually) that we can correctly time a switch as C.Rick suggests. That is exactly why we lean so heavily on the pros whose job it is to have good insight into the near-term prospects of lots of such stocks, the market-makers.
Most favorite, reliable, dividend-paying stocks of interest are held importantly by the MMs big-money-fund clients. Their needs to adjust those portfolio holdings from time to time urges the MMs to develop a keen sense of the stock's price prospects, both to the upside and the down. That becomes a big help in our putting active investments appropriately into stocks where we can compound both dividends paid, and capital gains captured.
In most cases, dividends from the blue-chips are going to be paid on schedule, regardless of how under-priced or overvalued the market may have pushed the stock's price. But for many stocks their price swings during a year are many times the size of all the dividends paid. Either avoiding those price moves on the downside, or capturing them on the upside between dividends usually makes the effort worthwhile, even if a dividend gets missed here and there in the process. Just look at the gain as a special dividend.
The trick is to be able to do it reliably enough so that the winning actions significantly outweigh the losing ones. That is why we keep careful track of what proportion of the MMs' forecasts are likely to be winners. Not just their overall batting averages, but made specific to the balance between upside and downside prospects that they are seeing now, in comparison to similar ones seen in the past.
We daily update our actuarial tables to show how well the MMs have understood the prospects, at all levels, for over 2,000 stocks. Typically they show good ODDS of success with dividend-payers at key points of market valuation, with sizeable PAYOFFS when executed in time-disciplined constraints.
Your comment indicates you are not opposed to changing horses when a better one can be found to ride. With the MMs help, you should be able to improve your investment results. I hope so. We soon should have things ready to be of assistance.
best regards, and good luck on your investing.
Peter
Why You Need A Sell Target For Each Stock Held - And How To Set Them [View article]
Thanks for the catch. My bad, the low forecast in the picture is actually $75+, while the bottom figure in that stack of numbers is $85+, which was the "price now" quote.
In answer to your info source question, takeone1 has the partial answer. Blockdesk.com is in transformation from serving institutional investors to being aimed more appropriately now (in my semi-retirement) to individual investors, We hope to make it available soon, but in the meantime we will continue to provide info on specific stocks we see ones that should offer favorable odds on attractive price-gain payoffs in time-disciplined periods.
I'll try to proofread more carefully next (each) time, and always welcome reader assistance to clarify. Thanks again for your help.
Peter