Tuesday, May 29, 2012

The Wall of Worry

Adapted from A Dash of Insight

Selected Quote:

Investors, business leaders, economists - Most of them feel more confident about their personal circumstances, but they are worried about everything else.  When it comes to the stock market, the fear is palpable.

The single biggest source of investor profit relates to evaluating what many call "market fundamentals" and others call "headwinds."

Readers should note that worries and headwinds are not quantified.  Anyone can deal in words and anecdotes.  It requires some expertise to include data.  Those of us who have been data-driven have beaten the anecdotal crew by a wide margin.

If you are an investor who is not mesmerized by fear, you will be able to join me in doing two things:
  1. Finding stocks that  have strong anticipated earnings and cash flow.
  2. Finding stocks with strong dividend yield.
The Wall of Worry is a difficult concept to explain, and even tougher to appreciate in real time.  The daily stories seem so tangible --- often augmented with TV video.


My Notes:

Investors who can identify the wall of worry should make above average profits buying when everyone is 'worried' with shares available at below normal prices.

Are we in India currently facing such a wall? Technical Traders like me, base our buy and sell decisions on hard, tangible charts and not on 'what I think may happen'. As of now, long term charts are NOT bearish. This may change, but I am describing the current scenario.

1 comment:

GP said...

Hi sir - Good Eve

Can you please explain the importance of open interest
in F/O Trading and Please the very Important
tell me how to read the open interest in the live market
- please explain me with an example
i will be very great full to u sir thanks - Girish girish.s.powar@gmail.com

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