Thursday, December 22, 2011

Freedom To Think.

Friends, I am not a day trader. It takes too much time and effort and I am not made of that fiery stuff. Hats off to those who are able to day trade successfully. For me, it is like sitting on a rocking chair, which keeps me busy and occupied whole day, but does not take me anywhere.
The point of saying the above is, I have identified a trend and have taken a trade in that direction. Now during the course of that trade, prices may go up or down, but so long the general trend is being maintained, I could not be bothered much. Unless of course, something extra-ordinary happens, like December 20, when the trend got too stretched and I saw an opportunity. So while I will keep an eye on the market happening, I would not possibly jump in action with every news or price swing.

I would consider them as mere noise and would rather devote my time and energy on other things of life. Also it will be useful to remember that nothing goes up in straight line for ever. Prices have to come down in between; corrections have to happen from time to time for the trend to follow its path. My point of saying it here is that if you see SPX closing in red one day between now and end of this rally do not panic. It has been scheduled to scare those naughty boyz who do not believe in Santa. If and when that happens, please know that everything is according to plan. Any decent dip is a buy.

I am trying to figure out if gold correction is over, if gold has de-coupled from equity. How far bond prices will correct themselves and what lies ahead in 2012. Are we facing deflation or hyperinflation? Why we are not seeing  hyperinflation yet, given that all the Central Bankers are printing money like there is no tomorrow. How to marry macro with micro economics and get a good risk adjusted rate of return. Getting a reasonably good answer to all these questions will help in getting an above average return from the market and we would not have to listen to all the crap from the talking heads of CNBC or paranoid conspiracy theories of Zerohead or endless waves of fairy tales from Prechter.

That is what freedom to me is! Free to think independently.