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THREE TYPES of Investors, & how to Win at Trading

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THREE TYPES of Investors, & how to Win at Trading

There are THREE TYPES OF INVESTORS

1. Value investors - who look deep into an investment and make calculations utilising fundamental factors like Book Value, Cash flow, and future dividends to see what a company might be worth, and whether it is trading at an interesting discount, sufficient to justify an investment
2. Momentum investors - who look at charts to see if money is flowing in, and raising the price, and to see where support and resistance levels might be
3. Narrative investors - who listen to stories they hear from others, to see what others are buying and hear what stories are in favour, or out of favour.  

Over time, skilled VALUE and MOMENTUM investors can make money,  With value investors often early and selling out to Momentum investors as a stock becomes more popular, and draws in more buyers,  NARRATIVE investors are often the source of profits of the other two, since they tend to be buying and the top and selling at the bottom.  The BEST investors tend to be those who use both fundamentals and technical chart cues.  They choose stocks that are fundamentally cheap, and then time their investments using charts.

(Translation? Paraphrasing what an experienced investor said as a reaction to this):

Value investors profit from Fear.  Technical investors from Greed. 

Narrative investors have no idea of how to make money (consistently)

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Rick RULE:  "Don't pay attention to the Narrative...

Pay attention to how it makes OTHER people feel". (they FEEL! more than think)

Rick Rule: Making Millions in Junior Resources

Going with narrative to the Regions of Fear & Greed, are a great way to give money-making opportunities to other people

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TIPS from a Momentum investor:

The answer to this problem of what to Trade, and How Much... is proper position sizing.

1. Be aware that an issue is on a vertical trajectory
2. Be realistic with the gains you are expecting
3. Be ready to cut at the level you have previously determined.
4. The size of your position should be “inversely proportional” to the height of the momentum. If it has been flying high then the position size should be smaller

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This could be a great example of Narrative Investing... in the Property market...

This couple JUST KNOWS that property prices are going to go up.

So they SWAPPED from a P 10 Million studio (of 40 sqm, ie P250k psm) to a 1BR unit "about double the price", and they may live there.

We Changed Our Mind About The Condo... (want to buy a larger one)

 

The 1BR is "like double" the price.  And Lucy sees that as a good thing... LOL:  "the fact is... this property is going to GO UP in value, so there will be more value to go up."  hahaha

She whispers: "This building allows pets, George.  I can get a cat."  Ah, the advantages!

===

The next video, AFTER they make up their minds...

"Hundreds of people responded to earlier video, and 99% said we should go for the 1BR Unit"

Buying a 1 Bedroom Condo in Manila! WE UPGRADED & ARE MOVING

 

 

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TAKE SOME RISK, people.  But do it intelligently. 

"Fall forward".  LEARN from your mistakes /
Denzel Washington's Life Advice Will Leave You Speechless (MUST WATCH) >

 

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NARRATIVE investing in the Property market

This Post is a great example:8D1tuUa.png

LOL.  She has it exactly BACKWARDS. 

Rents at 900 per sq is Reality - (Or maybe even less!). The P200k "market price" is delusional.  The imaginary price will correct towards reality, because rents are not rising anytime soon

BTW: 1% of value Monthly Rent= is a 12% Gross Yield.  WHERE can I get that, please?  I am ready

150 x monthly Rent is maybe more realistic.   that's 1/150= 0.67% a month x12= 8% per annum. The lower end of my 8-10% Target range

If rents are 25k at rise, then 8% yield is 25k x150=  P 3.75M.  That is the direction the prices are headed towards, as rents stay at 25K, or less for Bare.  The girl needs to learn how to use a calculator, if she wants to be a successful property investor.  The Rental market is not going to move to the level where the last delusional buyer paid the highest price to buy something already overpriced

/ 2 /

At least she knows she should be getting X amount for her investment. Soon she will realize you can't force the market to cough up what you think you deserve, it will be a harsh wake up call and an expensive lesson

I'm exploring this "pasalo" of condos (ie deals where the Buyer Assumes the balance still due to the developer) but it seems even the balance remaining with the bank or developer is still higher than the Realizable value,

( Sure,  in the last few years, people overpaid by 20-40% (or even more in some cases) and the will have to pay their way thru this delusional premiums, before they can recover the  remaining amount of payments still due to the developer )

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