Thursday, 9 March 2017

Crumbs and Black October (1987)

Regarding my You Win, You Lose, You Just Can't Choose post, Jamie had this to say:

He has dropped crumbs but not actually explained how he avoids premium charge. It has taken different guises from losing on Betfair and winning on another exchange, to trading on someone else's behalf using their account. If he is making good money trading and avoiding the PC then my feeling is as he is part of the vendor team that provides the Bet Trader software from Racing Traders and he also does them day trading courses also, I can only assume that a deal has been struck between vendor and Betfair. Otherwise I can't see it myself.
The crumb dropper is a Tony Hargraves, a.k.a. @SportsTrader_AU and if he has a special arrangement with Betfair, he should probably just not mention the subject rather than make up the nonsense about losing on Betfair while winning elsewhere. Of course it's quite possible that he isn't in Premium Charge territory anyway, because why would he be costing himself money in the form of time and future profits by teaching others how to trade?   

James commented on my Compensation For Losing post saying:
I have been considering tracking the indices with derivatives. Probably a CFD but not at market top. I don't have spare margin for any near term correction. After a downturn, going in with a 9 month contract and rolling it over at expiry for a number of years.
Needs more research.
CFDs are Contracts For Difference which have their advantages (e.g. higher leverage) but also their disadvantages (e.g. paying the spread on entry and exit).

When the next market correction occurs is anyone's guess - I'm sure an "expert" somewhere has predicted it for just about every month since the current bull market started - and the one who ultimately wins this "musical chairs" of stock market analysis, gets five minutes of fame, is seen as a guru for predicting future market moves until it becomes apparent it was all just a lucky guess.
Trying to time the market is an exercise in futility, a lesson I learned relatively early in life in 1987.

Black Monday, October 19th, saw the FTSE drop 10.84%, and with a little cash to spare, young Cassini, barely out of short trousers, decided this was a prime opportunity to put on his big boy trousers, and pile in to buy some great stocks at now bargain prices.

Cue Black Tuesday, and an even bigger loss of 12.22%, which remains the worst one day percentage decline in FTSE history!

Thursday 22nd October saw a further loss of 5.69%, and the following Monday another drop of 6.19%.

It was an exciting week, and while it wasn't the cheapest of lessons, it was certainly a valuable one. 

1 comment:

James said...

I agree that market timing is as fruitful as using 99.9% of tipsters but I still wouldn't want to start an index tracker with a one shot CFD at market top.

If you are drip feeding capital into an index tracker then that is okay because in the long run you can do harm. If buying a single contract CFD then market top is not a good idea as you will no doubt need a lot of margin in the short term.