Summary: When a broker calls you it is just to get the job done. The firm has to place so many shares and you are just one of the fellow investors who shall give your money for a couple of buzz words and potentially a sheet of paper that says: this stock will move to the upside. When you take the offer, it turns into your responsibility – and if you make or lose money, it is in your account.
Please Do NOT Blame Your Broker
Do we not all get those calls of the, let me fraise it that way: “give it all investment.” The one that cannot fail, because everything is lined up perfect and there is even a prospectus of how that share will fly through the roof and we will be so much better on. Three weeks ago when Gold was at $1253/oz I got all those calls that told me it is going to be at $1300 soon and I can buy a real complicated option chain and will make good. Today, July 6, 2010 we are at $1195 and I should have turned their offer into shorting gold, if I had, it would have made me $5,700 per contract – not too bad.
There is a common theory that says: “the public is wrong” and when you go continuously against the trend you are much better on. Indeed, I never got so many phone calls about buying into crude oil as it was at $145 a barrel and now we are at $72/barrel and even went to a low at $33.20 after the high of $147.27. Interesting, isn’t it. Hence I want those brokers to call and immediately I know which side to take. But this is too simplistic. Using technical analysis and trusting in clear readings of price patterns is the key to success.
Tonight I read a publication from June 15, 2010 where 7 chart breaking stocks of the Brazilian market were explained and in the best case, had we done the investment on June 16, we would have lost only 10% of our capital, in average 20% and 40% at worst. That’s a real achievement in e weeks.
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Tuesday, July 6, 2010
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