Portfolio management strategies for technical analysts

By Lucia Lepe

"We believe that calling actively trading institutions investors is like calling someone who only enjoys one-night stands a romantic."

The crazy trading associated with mutual funds is almost never-ending. They buy stocks when interest rates decrease by 0.25% and a month later sell them when interest rates increase by 0.25%. They employ a

• Language: English
• Publisher: Lucia Lepe
• Release date: Feb 1, 2024
• ISBN: 9798869216144

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Portfolio management strategies for technical analysts

Portfolio Management Strategies For Technical Analysts

Copyright © 2023 by Lucia Lepe

All rights reserved

TABLE OF CONTENTS

CHAPTER 1 : I WOULD HAVE BEEN A BEGGAR IF THE MARKET WORKED EFFICIENTLY.

CHAPTER 2 : THE ABOVE IS AN EXAMPLE OF INFORMATION STORED IN ANALOG FORM.

CHAPTER 3 : INVESTMENT PROCESS OF TECHNICAL INVESTORS

CHAPTER 4 : I TOOK THE RISK TO ANSWER BECAUSE THEN AS NOW

CHAPTER 5 : TOO MANY CUSTOMER SURVEYS ARE DISGUISED MARKETING CAMPAIGNS

CHAPTER 6 : INFLATION

CHAPTER 1 : I WOULD HAVE BEEN A BEGGAR IF THE MARKET WORKED EFFICIENTLY.

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In the investment world there is an assumption that the stock market operates based on efficiency, that stock prices accurately represent the value of the stock during the day based on the information published about it. From a short-term perspective, the stock market is relatively efficient, but short-term efficiency often brings valuation errors from a long-term perspective. What this means is that over the long term, the stock market is often inefficient. Warren often cites her investment in the Washington Post Company, which owns the Washington Post newspaper, Newsweek magazine, and four other television channels for a total value of at least $500 million - yet the stock market overvalues it. The entire company is only worth $100 million. Why is it so cheap? Because if you look short term, Wall Street doesn't think the stock price will increase within a year, but yes, it won't. But from a long-term perspective, this is an extremely good buy; and Warren bought $10 million of its stock. Thirty years later this number of 10 million has increased to 1.5 billion. The thing to remember is that short-term effectiveness often does not create long-term effectiveness, which you can take advantage of to make yourself extremely rich.

WORD NO. 122

In my opinion, the stock market does not exist. It just appears as a parameter to see if anyone offers to do stupid actions.

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Wall Street is always talking about whether the stock market is going up or down and its ability to predict its next direction. Warren doesn't care at all about the direction of the market, he only cares whether there are people managing mutual funds and buying and selling stocks with a foolishly short-term view when viewed from a long-term perspective. To do this, he reads the Wall Street Journal, always recording all these short-term stupid actions.

WORD NO. 123

We believe that calling actively trading institutions investors is like calling someone who only enjoys one-night stands a romantic.

The crazy trading associated with mutual funds is almost never-ending. They buy stocks when interest rates decrease by 0.25% and a month later sell them when interest rates increase by 0.25%. They employ a tactic called inertial investing, in which they must buy a stock when it rises rapidly in price and sell it when it falls rapidly. If there is just a slight decrease in revenue, they sell the stock, and if there is just a slight increase in revenue, they buy it. If there is just a little sign of war, they sell, and if there is just a little sign of peace, they buy. All of these actions were taken in a bid to be named the most successful foundation of the year, an honor that would bring them millions more dollars from a short-term-minded and converted public. from one fund to another based on a quarter's performance. This method cannot be called investment, it is just prediction under the guise of investment. Investing is buying part of a company and watching it grow; Predicting or speculating is throwing the dice in the short-term direction based on stock prices. Investing makes you extremely rich, speculation makes fund managers throwing hot dogs extremely rich.

WORD NO. 124

We have no opinion, have never had an opinion, and will never have an opinion on the future of the stock market, interest rates, or business actions a year from now.

*

Imagine how to earn billions from the stock market without having an opinion about the stock market or interest rates. How can Warren keep it that way? He was able to do it because everyone was worried about stock market swings and profit forecasts for the next year, which meant they would fall into the trap of doing stupid things like selling a company. The company has a very good long-term economic structure just because the Federal Reserve can raise interest rates by 0.25%. And when these sensible investors sold great companies for stupid reasons, Warren sat waiting to buy them back, and once they were in his hands, he wouldn't let them go. So if you want to be super rich, just ignore the rumors and boasts about where the stock market is headed, forget about the Federal Reserve and interest rates, and just focus into determining the long-term structural economic value of companies with sustainable competitive advantages, and then determining where the stock prices are relative to their value. When they are undervalued, buy them, when they are overvalued, stay away. If you're serious and keep at it long enough, you'll eventually accumulate a portfolio of great companies that will make you super rich later, just like Warren did.

WORD NO. 125

Among the billionaires I know, money only makes them more obvious. If they were cowards before they had money, they're just cowards with a billion dollars.

*

Money only emphasizes your inherent nature. If you were kind and generous before you were rich, you will be even more kind and generous after you are rich. If you were cheap and stingy before you were rich, you will still be cheap and stingy when you are rich. You only need to remember Ebenezer Scrooge (a character in Charles Dicken's novel A Christmas Carol, symbolizing the change in nature from evil to good) to understand immediately. However, Scrooge had to meet a ghost to realize the problem. In the end, good people are still good people whether they are rich or poor, the important thing is that they are good people, not whether they are rich or poor.

Introduction

Gold is currently the most popular investment channel in Vietnam and around the world. But, like stocks, the gold investment field also requires investors to equip themselves with the necessary knowledge so as not to invest in a risky gambling style. In fact, investors value gold very much, but few people deeply understand its role in the world financial market. Considered a safe haven asset, this precious metal can increase in value when the stock market declines and even when the economy is in recession.

In the past 3 years, the Vietnamese gold market has been making strong progress and is increasingly fluctuating in line with the world market. Along with the decline of the stock market and the freezing of the real estate market, shifting to the gold business is an attractive choice for investors. However, we must admit the truth that gold trading is always an investment channel that contains many risks and is difficult to predict accurately. Therefore, careful preparation in terms of knowledge, bravery and investment experience is considered indispensable for investors to confidently participate in the game.

According to BIS (Bank of Intellectual Settlement), the structure of the global financial market is divided into two quite different parts: Trade and investment (physical transactions) account for only 15%, while Risk Prevention and speculation (position trading) accounts for 85%. Therefore, knowledge in analyzing and making investment and trading decisions in gold is essential for investors. A sad statistic is that according to recent statistics, up to 90% of gold investors in Vietnam suffered losses! The reason is that most investors mainly trade gold as amateurs. An objective reason is that we do not have many good experts on gold investment as well as very few books written on this topic. Meanwhile, professional gold investors require an understanding of the world economy, especially large economies such as the US, EU, Japan, China..., to operate. of Central Banks and large gold hedge funds, the strength of the USD, changes in the stock market, prices of raw materials on the world market, along with Vietnam's economic situation, government exchange rate book....

Currently, in Vietnam, there are very few books written about gold investment because gold business has only developed strongly in the past 3 years. Therefore, the book Investing in Gold by author Jonathan Spall is really useful. With more than 25 years of knowledge and experience as an investor in the gold industry and currently Head of the Commodities Division of Barclays Capital, Jonathan Spall has provided readers with detailed instructions on one of the the world's most valuable assets, from mining, gold refining, trading to market valuation trends. In addition, the author also shares knowledge and experience related to simple and complex gold trading processes; The important role of Central Banks in the gold market; How to trade gold; Risk prevention measures as well as investment strategies in gold... The book Investing in Gold has been voted by the website www.egold.com as one of the 10 best books in the field of gold business. .

I respectfully introduce this interesting book to readers and believe that it will provide a lot of useful information for those interested in the field of gold investment and trading.

Dr. NGUYEN TUAN Quynh

Deputy General Director of Phu Nhuan Jewelry Joint Stock Company - PNJ

1. Gold mining

WHO MINING GOLD?

South Africa is synonymous with gold, and in general, the country was once considered the world's largest gold producer. However, that is not the case anymore. Originally home to nearly a third of the world's gold output and once producing 1,000 tons of gold per year in the 1970s, South Africa now mines only about 270 tons per year.

In the second half of 2007, South Africa was overtaken by China for the first time, and China is now the world's largest gold producer. Indeed, South Africa's output has declined by about 5.6% per year over the past decade. Similarly, Australia, which increased production in the 1990s, is now also declining.

However, gold is still very important to the South African economy. According to data from the South African Chamber of Mines, this sector still creates jobs for about 160,000 people. As for how many people are increasingly dependent on the gold mining industry, this is a relatively difficult question. It is thought that around 5 million people depend on the 458,600 people working in all sectors of mining - a ratio of almost 11 to 1. In general, this number is confounded by polygamous marriages, but the average number is somewhere between 5-12 people dependent on a single mine worker. In fact, there are about 1,500,000 people who rely on salaries from the gold mining industry in South Africa.

It is not surprising that similar to the output figure, the employment rate has been decreasing by an average of about 8% per year over the past 5 years. During its peak in 1987, the Yellow newspaper in South Africa reported there were 530,622 jobs in the industry. In South Africa, gold is the second largest export earner after platinum group metals (or PGMs as they are more commonly referred to).

So what exactly did these countries produce in 2007? See table 1-1.

Table 1-1: Gold output of countries in 2007

GFMS estimates total global catch at 2,475.9 tonnes in 2007.

The top companies mining this metal based on global criteria are listed in Table 1-2.

The romantic notion of gold mining is that the metal is found in the form of sparkling nuggets. However, the truth is less exciting when companies are forced to remove a series of compounds to get this mineral.

Table 1-2: The world's leading gold mining companies

The two main types of mining are open pit mining and underground mining. Open-pit mining is common in North America and Australia, while underground mining is common in South Africa. However, some mines were initially open-pit mines because they were relatively easy to access, but later had to be converted to deep underground mining because the mines gradually dried up.

Gold has been mined for thousands of years - with some evidence showing that Egyptians have been mining gold underground since 2000 BC and rivers appropriated to pan for gold appeared even earlier. than. Over the past few thousand years, the forms of open-pit gold mining and underground mining have changed little in nature.

UNDERGROUND MINING

A few years ago, I was fortunate enough to visit the Tau Tona mine (the name means big lion in Sesotho), operated by AngloGold Ashanti, located about 65 km from Johannesburg. It's more interesting to visit a working mine than a visit to a VIP exhibition. After lengthy safety instructions, including not using cell phones, cameras, etc., without being guaranteed to avoid the risk of sudden explosions, we were taken deep into the depths. about 2,000 m underground. This mine is even deeper as the gold ore is still mined at an average depth of nearly two miles and the deepest point of the mine still goes down about 1,500 feet. At a depth of more than two miles, this is still not the deepest mine in the world. The world's deepest mine belongs to Gold Fields' Driefontein Mine with a depth of more than 4,120 m, followed by the same company's Kloof Mine with a depth of only about 4,020 m. These records may not hold for long as the identified gold reserves are still 5,600 meters underground, and although technology is advanced enough to exploit these reserves, the costs are still high. barrier – at least for now.

To be able to bring people down to work underground, a series of super-speed elevators have been designed and put into