# Are These 7 Myths Why Investors Are Financially Poor?



## new dog (Jun 21, 2016)

I know many don't like zero hedge but he does put up an interesting argument to debate here. The suggestion is certain myths in investing have kept the average Joe investor poor.

http://www.zerohedge.com/news/2017-07-06/7-myths-investing


----------



## lonewolf :) (Sep 13, 2016)

Not everyone @ a poker table can walk away with more money then they brought to the table. The money will flow to the strongest player/players most will lose. The market is the same way no way can everyone walk away with more money then is put on the table money will flow to the strongest plus to keep the market well oiled the middleman is well paid.


----------



## new dog (Jun 21, 2016)

In the first myth it says you can't time the market. He claims that indeed you can't time it like you know the future but a simple use of a timing average for example can get you in and out of the market. I put a 5 year 100 day average on the XIU and it does appear to work if you sold when it crosses to the upside or the downside. Hard for people to follow this discipline I would think and also it may not work so well in a choppy sideways market where you would trigger too many trades possibly.


----------



## new dog (Jun 21, 2016)

In the second myth it claims buy and hold or DCA doesn't work so well because of the discipline of the investor.

On this forum people seem to hold true to their selections and stay invested. However this market is manipulated and not normal as the market always has a bid under it and proper corrections are stopped from happening. 

The third one of more risk equals more return is a problem. Sure if you invest in general equities it should give one more return if time is given then cash. But one could invest in penny stocks and expect much more return because the risk is much higher however that payoff usually doesn't happen the way an investor might expect. So in a broad sense using higher value investments it can work in general.


----------



## lonewolf :) (Sep 13, 2016)

Just before a market crash put options are the least expensive this a time when risk is lowest to buy put options. @ historic bottoms when risk is lowest stocks are the cheapest. For the majority of poker players to be wrong their perception of truth must be wrong. Replace that which is false in ones mind replace it with that which is true


----------



## Rusty O'Toole (Feb 1, 2012)

I know when I got into investing I had to revise my whole line of thinking. Everything I learned in school and from my family and friends was wrong and counter productive to making money.


----------



## lonewolf :) (Sep 13, 2016)

Robert Prechter has often said he knew he made a bad call when he never got any negative phone calls. He knew he made a good call @ historic market turns when he would get lots of negative phone calls. Tim wood when he called the top in oil in 2008 lost a lot of clients. The same when he called the top in gold in 2011 LOL Then when investors realize a good calls were made & track record good they subscribe untill next big turn then they take comfort in the herd drop service send hate mail & negative phone calls.


----------



## humble_pie (Jun 7, 2009)

lonewolf :) said:


> Just before a market crash put options are the least expensive this a time when risk is lowest to buy put options. @ historic bottoms when risk is lowest stocks are the cheapest. For the majority of poker players to be wrong their perception of truth must be wrong. Replace that which is false in ones mind replace it with that which is true




wolf the problem is that you have been going on about buying put options for 3 or 4 years now. I remember discussing with you when you were buying farthest-out 2015 LEAPs puts in SPY, that must have been in 2014 or possibly as far back as 2013.

alas all those puts have been disastrous failures. The market has romped from one record high to another record high.

the good side of the strategy is that puts are not as risky as shorting stock, although continuously buying puts that decay down to zero in value is a less profitable strategy than investing in HISA.

it is possible, though, that one day your ship will come home.

.


----------



## new dog (Jun 21, 2016)

Of course the market will drop very hard one day but the question is when and from what level? It is very hard to have much success in predicting downturns when there is intervention in the market holding back market declines. On the other hand printed money equals inflation and it has to show up somewhere.


----------



## lonewolf :) (Sep 13, 2016)

I have said max 2% on table. I have my eye on possible buy end of Sept to play possible another 7th year Oct Decennial crash though must wait for price pattern set up. Have not bought puts since I think before fall of 2016 or 2015. In 08 I made a lot of money with puts. Long GICs Manitoba online credit unions from the money made from 08 put SPX & SPY. Max 2% of this money per a year I put on table. Im highly confident I will make money hand over fist in a 3rd wave decline. I sometimes jump the gun the proper set up is waiting for 5 up from 09 low to complete then short an ABC rally of a second wave after an initial 5 wave decline. From experience hopefully I have learned my lesson to wait for proper set up. The set up is not there yet though when it arrives 100 to several thousand fold on money I do believe is possible to make. Your right Humble trying to constantly play can nickle & dime you to death. Based on cycles alone fall of 2017 looks dangerous though price patter is most important set up in my work.


----------



## humble_pie (Jun 7, 2009)

lonewolf :) said:


> Im highly confident I will make money hand over fist in a 3rd wave decline



each: my favourite lupine speaks

now if you'd stop the bilge about brown-refugees-are-ruining-canada, you'd be a whole barrel of fun


----------



## canew90 (Jul 13, 2016)

He concludes with: 
"In the end, only three things really matter in investing for the “long-term:”
The price you pay.
When you sell, and;
The “risk” you take.
Get any one of those three things wrong, and your outcome will be far less than you have been promised by Wall Street."

I agree with the 1st and last, but have found the one is better Not selling, but holding for the growing Income (as I only bought Income producing stocks).


----------



## humble_pie (Jun 7, 2009)

new dog said:


> On the other hand printed money equals inflation and it has to show up somewhere.



so true. If you can't afford to buy anything then you have to buy stocks just to keep up with inflation.


----------



## lonewolf :) (Sep 13, 2016)

new dog said:


> On the other hand printed money equals inflation and it has to show up somewhere.


 I kinda thought that also though if people hoard money take it out of circulation i.e., hide in mattress result would not be the same as when there is high velocity of money. Baby boomers past peak spending swimming in clutter down sizing wanting to work less is perhaps the new trend.


----------



## lonewolf :) (Sep 13, 2016)

humble_pie said:


> each: my favourite lupine speaks
> 
> now if you'd stop the bilge about brown-refugees-are-ruining-canada, you'd be a whole barrel of fun


 Thanks Humble 

Recently read a study of the top 200 artists over the years revealed that their best work was done when they were @ an age of 62% of there total life i.e., if they lived to 100 their best art work was done @ age 62. Which is very close to fib ratio of .618, Would be interesting if countries reached their peak @ fib ratio of .618 of their life expectancy.

When Canada was young People were not burdened with taxes, rules & regulations as the country gets older we tax the responsible more have more rules & regulations i.e., increase minimum wage to $15, 10 days off for personal reasons, companies having to pay for stat holidays, now talk of basic income for everyone.

150 years ago there was an incentive to be responsible & support yourself if you were not responsible like each wolf, fox , rabbit bird etc & take responsibility life would be short. Infrastructure has been built up over the years that has been a positive compared to when their was no infrastructure. Rule of law was needed to help make Canada great though as we get older government has become to big & perhaps past the positive point where it is now a burden with to much rules & regulation & promises made such as pensions that most likely can never be funded for ever. 

We can destroy our country from within do not need the help of anyone it is just part of our destiny cycles of life & death. This market should crash in the next 10 years even if cycles invert & high is made @ a latter date.

Based on my fit bit I have resting hart rate of 41 Max hart of @ least 171 which achieved twice during workout this summer which is 7 beats more then is standard for my age. I plan on living to 100 plus. Right now 56 so I m lucky enough to not be to far off from fib ratio of my life where should be like the artists & be most creative right around the time I m looking for a 1929 1932 style of crash.

A younger person with less experience & study would have lower odds of turning lemon into lemon aid. Though no need to reinvent the wheel if a younger investor were lucky enough to find a mentor they could achieve better results sooner though in one of the market wizard books every single wizard lost money until they perfected their craft.


----------



## new dog (Jun 21, 2016)

lonewolf :) said:


> I kinda thought that also though if people hoard money take it out of circulation i.e., hide in mattress result would not be the same as when there is high velocity of money. Baby boomers past peak spending swimming in clutter down sizing wanting to work less is perhaps the new trend.


However many have been looking for assets like Real Estate, stocks, art and crypto-currencies because of possible future currency risk. The Central banks keep the price of PM's down using undeliverable paper on the COMEX to keep currencies from losing confidence because of massive money printing.


----------



## Rusty O'Toole (Feb 1, 2012)

If you really want to make your fortune wait till the decline starts, then buy your puts. Use a moving average cross if you can't think of anything better. Catching 80% or even 50% of a move is better than pissing away your account trying to outguess the market.


----------



## Rusty O'Toole (Feb 1, 2012)

By the way, now may be the time. The NASDAQ is already down and the S&P is only being held up by the strength of 5 or 6 big companies. This is typical of market down turns. Is this the big bad bear we have been waiting for or will the market recover? I don't know but I'm mostly out of the market right now, waiting to see which way it goes.


----------



## new dog (Jun 21, 2016)

It really depends on the PPT and if they want to trap the shorts or let it go and pin it on Trump. Trump has tried to own the upturn so that means he would own the downturn and that is a good opportunity for those who want to put him down.


----------



## lonewolf :) (Sep 13, 2016)

Rusty O'Toole said:


> If you really want to make your fortune wait till the decline starts, then buy your puts. Use a moving average cross if you can't think of anything better. Catching 80% or even 50% of a move is better than pissing away your account trying to outguess the market.


 Play options a little differnt then stocks best not to short the top unless deep in the money puts used with little to no premium. Best to short near top of wave 2 rally with out of money puts , unlike stocks best to buy puts on an up day the stronger the better & sell max momentum down. Best place to buy top of wave 2 sell near bottom o wave 3 (out of the money can be real big money maker esp down markets in this position of price structure other wise deep in the money), 2nd best top of wave 4 sell bottom of wave 5. I learned from the best Robert Prechter who won the US trading championships & set all time record option division ( still stands ?) Over half winners since used Elliott wave read a few years back. To handle the stress Prechter had to lie in the fetal position on occasion. His life was under stress from his wife being pregnant with complications which resulted in him being down in the first half or so of the championship when he got the phone call everything was good his performance turned around to the positive. He used mostly deep in the money calls & puts as market was not in strong trending pattern


----------

