Share or stock trading

Trading the stock or equity share market is how the pension companies loose your pension fund for you.

Most pension funds managers get paid regardless of performance so fail to keep managed funds up to even the average rise in nominal share prices. While those who, like Warren Buffet, bother to learn about the stock market business pick those businesses that will do better than the average depending on the current phase of the economic cycle.

Remember the Stock Market is a Net Zero game (although this is better than net loss games like war & economics) – meaning for you to win other amateurs have to lose an equivalent amount and the nominal price of the shares is set by the Market Makers, who see all the planned transactions before setting the price to produce as many buyers as sellers.
Scammers know the Market Makers must increase the price of new company shares (to attract amateur buyers) before they adjust it to reflect its worth as indicated by the number of buyers = number of sellers at that price. It takes time for the market to adjust – it took over 2 years to adjust to the Dot.com bubble although with no customers online the dot.com companies were worthless. This is because most investing decisions are based on greed or fear rather than rational behaviour.

Professional stock traders have a system to manage their risk and emotions. So only trade when return to risk ratio is at least 3 so make money even when they only get half of their predictions right and know when they are leaving before they enter a trade.

The near record highs of the nominal stock price indexes is not a measure of the value of the share but how much the money has fallen in value in the 40 years since the US Government started introducing fake money to pay for imports instead of correcting the defects of the economy. When share prices are measured in terms of Gold (who’s price only goes up when people are uncertain about their future) share prices are at an all time low.

6 Responses to “Share or stock trading”

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  6. Graceland says:

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