when i first came across the BS model, without yet knowing the success and eventual downfall in its application to real markets, i was very skeptical. the subsequent hour where my lecturer proceeded to explain how LTCM failed during sustained market panic proved my initial worries were right. of all the factors in it, tail-risk, volatility risk, there was no factor to quantify fear, or more accurately, contagious sentiment. to be fair, there was liquidity risk calculations but its assumptions were based on stable markets, which, over the last few years, was very apparently the biggest myth.
over the years, as the ideas of momentum trading, risk-on risk-off took the spotlight, i felt my very early bias towards sentiment-based trading was validated. in the long run, if you ride your profits and stop your losses, it is very hard to lose money in trading. in the long run. the biggest macro-trend i see missed by a number of investors is the 10, 50, even 100 year growth trends of total market cap for each exchange after adjusting for inflation. it grows at such a phenomenal rate the only way to lose money consistently is to be ill-disciplined. i believe the trend is your friend, and i hope bros with differing views can share their opinion on such matters.
i'm very bullish on commodities right now, because the fundamentals are strong. and by that i don't mean market fundamentals, but the fundamental sentiment across price-setters and price-takers. i am convinced news is only useful when you believe it has the power to move other people (in great numbers), not so much your own beliefs. i find it more profitable to bet on what most people believe, than applying logic, fundamental or technical analysis. when i hear of a wheat export ban, i react because i believe other people will react, not so much because i think there will be a shortage. not that i have access to products like wheat (are retail investors like me even given access in any way to speculate on softs?)
i wonder if there are other bros who also assess investments in this manner?
to stay mildly on course, i recall reading bro justime's thread a few years ago, and hearing bro ansonha's story has moved a long-time lurker in this thread to just say that i have the utmost respect for people like bro justime, who reach out to strangers and lend a helping hand. good karma will follow, i'm sure of it.
there, i kissed his ass too. what you going to do, hang flowers on me?
