August 1, 2011- Things I Focus On

Trading Tools/Ideas You Can Definitely use:

1.) Bloomberg Insights –

It’s one thing to stay up to date with news, data and information.  It’s another entirely to dig past the surface, make meaningful connections and generate insights.  Let us show you what others miss.-  Bloomberg Insights

http://www.bloomberg.com/insights/unhappy-millionaires/

– Video above only reinforces with hard data-that you need to put customer service on top of your priority 😀

Pardon, I couldn’t embed the video here in wordpress, which I also find odd. Just click the link above and check all the stuffs in their gallery when you have time.  It’s a goldmine of insights.

2.) The Father of Financial Planning Was Lazy – c/o I Heart Wall Street

Here’s a geeky video about the Polish mathematician, the most intelligent and laziest person he’s ever met.   He’s the father of Monte Carlo simulations.  

What’s a Monte Carlo? In layman’s terms, you play 100 games of Solitaire, and it gives you a statistical result.  That “average” result is your Monte Carlo result.  Thus— The trial and error method- is the computer’s best way to approximate solutions of our toughest problems 😀 Pretty neat? or Pretty common sense?

3.) Masters- once just a way to kill time waiting out economic downturns, the master’s is now the fastest-growing degree.

He calls the proliferation of master’s degrees evidence of “credentialing gone amok.” He says, “In 20 years, you’ll need a Ph.D. to be a janitor.”

Comment: I just read in recent headlines that HSBC just slashed around 30K jobs, while RIMM just slashed 2K jobs a few weeks ago, and as I write- the market is tanking on the ISM readings that is worse than July 2009.  I don’t want to augur some sense of (The chickens are falling! or some sort of doomsday reporter).  I’m just reading headlines.

4.) Active Value Investing and New “Ben Graham” – Mr. Vitaliy Katsenelson and his blog “Contarian Edge”

Highlights:

In these crazy times, all one could ask for is sanity. Yes, sanity – a clear mind, free of noise, to with which to face the insanity that the volatile, noisy stock market thrusts upon us. We find ourselves glued to our computer screens or CNBC, waiting to find out what the Dow’s next tick is going to be. What do we get out of it? Only a headache and wasted time.

Here is my advice: read. Read books that will bring you sanity, the ones that will snap you back into the mindset of investor and out of being a nervous observer of the daily stock market melodrama. – Contrarian Edge “aka Vitaliy Katsenelson”

For Mr. Vitaliy Katsenelson’s complete recommended book list, please read them here:

5.) The Value of Time – Mark Buchanan’s Opinion on Einstein on Wall Street and the Time Continuum

Highlights:

1.) Discounting 4 percent for 500 years in a row means dividing the future value by a number close to 500 million. So those future benefits contribute virtually zero in the calculation to determine if eventual benefits justify the upfront costs.

2.) Economic discounting as currently practiced is logically incorrect and, as a result, the cost/benefit analyses done by such authorities as the International Panel on Climate Change and the U.S. Environmental Protection Agency may drastically undervalue the future.

3.) Going back to the example of the marine sanctuary, and using the Geanakoplos-Farmer formula, you find that the present value of benefits 500 years from now gets multiplied millions of times compared with the standard analysis. A thriving marine ecosystem in the future, linked with a much larger fishing industry, might well be worth investing in today.

In effect, today’s standard economic methods make the distant future count for almost nothing. And those who always thought this seemed hopelessly naïve turn out to be right

4.) Everything about discounting depends on what assumptions you make about how variables fluctuate with time. A fixed interest rate doesn’t work. And neither does the strong exponential discounting to which it leads — even though most economists continue to use it.

5.)  Economists calculating the value of the future to perform cost-benefit analyses that influence how we take care of our world have been making some astronomically large mistakes.

Commentary:  Remember in college or perhaps when you’re studying for your CFA, or whatever financial text book you have your hands on, people always talk about discounting.  Well, all traders know that DCF analysis can’t always be relied upon.  How can we buy projects where earnings are too far out in the future?  Do we consider these as zero value?  Mr. Mark Buchanan, thank you for enlightening the world that what economists and our financial textbooks have always been wrong at, but which the market—at least some market professional investors, have not overlooked at.   I believe this is what one calls- informed speculation.  Despite not registering any revenues, this explains why some companies have 10 or perhaps 50 Bil peso market caps (wink 😛 )

6.)  Very Touching!  A Woman Forgives the Man Who Poured Acid on Her Eyes, got her disfigured and blinded her forever. – Compassion is never read- it is just showed.  This woman just showed us what true Iranian compassion is to the whole world.
http://i.cdn.turner.com/cnn/.element/apps/cvp/3.0/swf/cnn_416x234_embed.swf?context=embed_edition&videoId=world/2011/07/31/sayah.acid.attack.mercy.cnn

Highlights:

A woman blinded in an acid attack seven years ago said Sunday she stopped the “eye for an eye” punishment for her attacker because “such revenge is not worth it.”

A physician was to drop acid — under legal supervision — into the eyes of Majid Movahedi on Sunday, according to Fars News Agency, to punish him for throwing acid in Bahrami’s face. The act disfigured her face and blinded her.

She said two men were instrumental in bringing about her change of heart: a doctor at a clinic inSpainand Amir Sabouri, an Iranian who helped her get medical attention. Sabouri told her to forgive Movahedi and prove to the world that Iranians are kind and forgiving, she said.

– The Faceless Trader

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