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sobering thoughts - trading is hazardous

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Not applicable
Warran Ingram's article on Moneyweb . Well worth a read for all traders that are able to keep an open and objective mind. http://www.moneyweb.co.za/mw/view/mw/en/page311172?oid=573549&sn=2009+Detail&pid=287226
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12 REPLIES 12
THRESHOLD
Super Contributor
He has forgotten to address the issue of taxation. Clearly this is a major negative for traders. Even more so from a cash perspective - when one considers that profits are taxed and due in cash while losses are notional benefits against possible future profits. Also - investors benefit from dividends at low tax rates while traders benefit from the movement in the stock ex dividend at full marginal (much higher) tax rates.
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Peg
New Contributor
Warren Buffet reads five newspapers a day so I doubt very much he doesn't get any "noise". He just knows how to filter it
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SimonPB
Valued Contributor
noise is different for traders vs. investor .. trader wants zero noise, investor needs the noise coz it how they respond .. trade the price .. invest the noise ..
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kicc
Frequent Contributor
Does the same not apply for the fund managers that manages the big unit trust funds - they must also be reading the noise and im certain they cannot always filter the noise from the real news - also how many fund managers fall in that 2%?
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THRESHOLD
Super Contributor
Most fund managers underperform the market apparently. They are even worse though - they have a huge incentive to invest for dividends (rather than growth) since they can strip these for their own account. They may also "churn" to generate fee revenue.
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SimonPB
Valued Contributor
only half can beat, and then add costs so less than half beat .. last stat I saw, 15% general equity beat the market after costs ..
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Peg
New Contributor
Yes agreed. The article is saying that he thinks one of the reasons that Warren Buffet is so successful is that he lives in the back and beyond and only uses a computer to play bridge (ie it implies that he is starved of information.) It fails to mention that he reads five newspapers a day so one of the reasons he may be such a successful investor is shear hard work.
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Rams
Super Contributor
So the current market, is it noise...and one should invest?
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SimonPB
Valued Contributor
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Fredsed
Super Contributor
You must first clear your own eye such that you have rightful ownership of your perspective before you seek to help others to see it. Those who make a living from their views have tainted spectacles.
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Not applicable
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Fredsed
Super Contributor
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