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Old 08-23-2012, 08:23 PM   #41
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INTJ's are normally analytical, conceptual and have objective methods that they have developed in life that could be applied to the subject.
That's exactly why we aren't active stock traders. We've done all of that analysis, and our experiences have led us to conclude that the output is largely proportional to the amount of work input.

I have enough money to ER. I can't meet the criteria of the "Spend $10K!" thread. Why would I work harder to raise the size of the portfolio, especially when the downside risk is not insignificant?

As an INTJ ER, I'm happy to achieve 70% of the returns with about 10% of the labor. My "active" investing consists of (1) seeking startup companies for angel investments and (2) occasionally selling options on a stock or an ETF. Even then my experience indicates that I probably shouldn't be doing the former, and the latter is just part of forcing ourselves to rebalance.
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Old 08-23-2012, 08:35 PM   #42
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That's exactly why we aren't active stock traders. We've done all of that analysis, and our experiences have led us to conclude that the output is largely proportional to the amount of work input.

I have enough money to ER. I can't meet the criteria of the "Spend $10K!" thread. Why would I work harder to raise the size of the portfolio, especially when the downside risk is not insignificant?

As an INTJ ER, I'm happy to achieve 70% of the returns with about 10% of the labor. My "active" investing consists of (1) seeking startup companies for angel investments and (2) occasionally selling options on a stock or an ETF. Even then my experience indicates that I probably shouldn't be doing the former, and the latter is just part of forcing ourselves to rebalance.
That is all fine and good - I do a lot of the same. I do not depend upon my success in it for my ER needs either - I would never count for its success to base my retirement on. For that I invest like everyone else - Mutual Funds, Stocks that pay dividends, etc.

For me it is something that I do that I also enjoy - I like the thought that it requires. I use the money I make with my active trading to pay for extra vacations and extra toys. If and when the time comes that I can no longer do it actively and or profitably then I will invest the money I use in this category into a Mutual Fund or something and go on with life, but for now it is something that I like to do and it keeps my mind active and for me that is important...
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Old 08-23-2012, 09:16 PM   #43
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Way more data than a person can review on their own... but having that information is a fun challenge for computers. Track which stocks do best and then see which of those 2,000+ data fields that have in common... then try to understand why and how that group out performed the rest. Was it just a coincidence that Week? that Month? that Year?... and how likely are they to continue into the future.
Ok. I have a good idea of what you are doing. In my other life, I basically spend my time building numerous statistical and other models out of noisy, crappy, & sparse data to make similar types of predictions (although not in stock market).


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T
As an INTJ ER, I'm happy to achieve 70% of the returns with about 10% of the labor.
I haven't been following all of the most recent work in this area, but most of what I've seen suggests that there's no loss in expected returns for following a passive/indexing approach.


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I agree it is much easier to let the computer do it, but it still takes someone to tell the computer what to look for. I have been unable to find a reasonably priced tool that lets me alter and test rules at a whim and has download support. Fidelity's Active Trader Pro and Wealth Lab Pro offer some capabilities, but will not allow unique tweaks without major effort.
If you have the inclination, try a statistical programming environment like R (it's free). Any sort of canned tool almost always has far too many limitations.
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Old 08-23-2012, 09:58 PM   #44
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Ok. I have a good idea of what you are doing. In my other life, I basically spend my time building numerous statistical and other models out of noisy, crappy, & sparse data to make similar types of predictions (although not in stock market).

I haven't been following all of the most recent work in this area, but most of what I've seen suggests that there's no loss in expected returns for following a passive/indexing approach.

If you have the inclination, try a statistical programming environment like R (it's free). Any sort of canned tool almost always has far too many limitations.
That is kind of what I am doing. Getting live streaming data to my hard drive is the problem and or getting the logic I want in the canned tools is the other problem - they are all setup to use the standard type analysis methods - not home grown logic. I built predictive analytical type logic for a living for years. A lot of what I did was build logic that figured out other logic. Back in 2003 I started working to see what I could do with the stock market. I have done it on and off in my free time. On a small scale it works pretty good and since for me it is a hobby then small scale is fine. Fine tuning the logic keeps my mind active to boot...
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Old 08-26-2012, 12:58 PM   #45
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I actively trade, but consider my approach more cycle trading. I'm a product of the 90s and housing crash, so I take a very pessimistic view of the market. My view is the entire system is one big over-leveraged flame, so I try to ride bubble stocks up and get out before the crash.

Typically, I find high flying IBD stocks that have undergone significant corrections related more to the overall market behavior rather than the individual stock. I usually select stocks that had a prior rise of 30-50% in the last leg up and buy after a correction/dip (typically 2-3 months after peak). I get in early, let the market take the stock up, and generally get gains of at least 20%. Not all selections are winners, so i do use technical indicators for selling out early. This is very important in my system because the number of losers and the related losses would overshadow the winners.

There's obviously more than I'm willing to tell, but the amount of loss on any individual trade is generally less than 5%. After an initial rise, I will quickly move stop orders up to guarantee a profit (short of an algorithmic flash crash). I'm an INTJ / electrical engineer, and while I have no finance background, I do feel ashamed that with my signal processing experience my system isn't more sophisticated. I do recommend finding a system that can recognize cycle lows and highs and proving to yourself that these will work within reasonable probabilities (ie > 70%). I use relatively simple software, matlab for playing with ideas and tc2000 for implementing the system.

Company 401ks are a different matter, and I'm forced to hold for significantly longer periods of time. I use my wife's account as a control group for buy and hold in an age based retirement and compare to my account. I move money in my account at the bottom (or low) of a major cycle and out near the top. So far the cycle approach has twice the performance of the buy and hold approach.
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Old 08-26-2012, 03:48 PM   #46
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I am interested in how you define a cycle. Is this typically months, or perhaps shorter time frame? Or is it something driven by company specifics, so not easily applied to other companies?
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Old 08-27-2012, 09:36 AM   #47
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That is kind of what I am doing. Getting live streaming data to my hard drive is the problem and or getting the logic I want in the canned tools is the other problem - they are all setup to use the standard type analysis methods - not home grown logic. I built predictive analytical type logic for a living for years. A lot of what I did was build logic that figured out other logic. Back in 2003 I started working to see what I could do with the stock market. I have done it on and off in my free time. On a small scale it works pretty good and since for me it is a hobby then small scale is fine. Fine tuning the logic keeps my mind active to boot...
My method of choice is transferring the data into SQL databases and crunching numbers and coding in PHP for a web based portal. C languages might be a little faster at the recursive and processor intense calculations... but I love how easy PHP was to pick up and how it interfaces with HTML...

I enjoy building websites in my spare time so its been a great way to keep up with the latest technologies. Also having the data accessible from the web means I can 'play' with my tools, even from my phone, if a new idea hits me while I'm well anywhere.
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Old 08-27-2012, 10:08 PM   #48
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My method of choice is transferring the data into SQL databases and crunching numbers and coding in PHP for a web based portal.
Very interesting.

Is there a stats package in PHP or other libraries to make analysis easy (besides a database connection)? How do you do basic model fitting or significance tests etc.? What do you do for graphics and visualization?

I've used PHP for my own websites but didn't know people used it for data analysis.
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Old 08-28-2012, 02:13 AM   #49
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Regarding trading, while I don't usually get into returns since this apparently is an element of the discussion I will provide the following. As a long term holder my average holding period is 712 days or 1.95 years. The S&P Gain over this period was 25.81%, my average gain over this period, including dividends received, is 36.40% which is below my average gain over a longer period. As cited above, my focus is on commodity oriented equities-Agriculture, Energy, Precious Metals, Base Metals -- which comprise 79% of my investments, the balance being in banking, comp/tech, and miscellaneous. btw I am INFJ. All my best,
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Old 08-28-2012, 02:08 PM   #50
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Very interesting.

Is there a stats package in PHP or other libraries to make analysis easy (besides a database connection)? How do you do basic model fitting or significance tests etc.? What do you do for graphics and visualization?

I've used PHP for my own websites but didn't know people used it for data analysis.
Yep, PHP has all of those things and I've used a lot of Google searching to find and learn how to use them

For Graphics I'm using the following free software (requires Flash 10 capable browser):
PHP/SWF Charts > Introduction

It's amazing the kinds of things you can do with it from pie charts to interactive graphs. Basically takes PHP code and data and turns it into Flash on the fly. A bit of a steep learning curve at first, but after 3 months playing around with it daily I became a semi-expert. Helps that I enjoy working with this stuff... otherwise it would not be fun.

For statistics and analysis there are a lot of great functions in PHP that take care of the busy stuff. I love all of the array functions that manipulate data quickly without having to write functions to do what you want to do (example: finding correlation coefficients, standard deviation, CAGR (Compound Annual Growth Rate), or Sharpe ratios is a single line of code most of the time.

I used to do a lot of the same modeling in C and although you have a little more control, it is A LOT more code and work to get to a result.
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Old 08-28-2012, 03:06 PM   #51
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Yep, PHP has all of those things and I've used a lot of Google searching to find and learn how to use them
Okay, you have talked me into it at least. It has been added to my list. I sure will be glad when I finish my renovation projects. I would much rather be doing this kind of stuff over painting, replacing ceilings, flooring, plumbing, etc... But, you gotta do what you gotta do...
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Old 08-28-2012, 03:22 PM   #52
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Regarding trading, while I don't usually get into returns since this apparently is an element of the discussion I will provide the following. As a long term holder my average holding period is 712 days or 1.95 years. The S&P Gain over this period was 25.81%, my average gain over this period, including dividends received, is 36.40% which is below my average gain over a longer period. As cited above, my focus is on commodity oriented equities-Agriculture, Energy, Precious Metals, Base Metals -- which comprise 79% of my investments, the balance being in banking, comp/tech, and miscellaneous. btw I am INFJ. All my best,
2010 was my worst year in trading (3% overall). It was when I learned a hard lesson in taking chances. I took a lot of long shots with companies that were realigning lets say - not an area I normally delved in, but I thought I would try it for the potential of big returns on the other end... Did not work out as I had planned. Now I stick with what works and avoid trouble...
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Old 08-28-2012, 04:04 PM   #53
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Yep, PHP has all of those things and I've used a lot of Google searching to find and learn how to use them
Thanks for the info. Although I prefer the statistical programming environments for small scale stuff I can definitely see using PHP for this in the future. R has great graphics that include all the visual information you need but look like crap.
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Old 08-28-2012, 04:56 PM   #54
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Yep, PHP has all of those things and I've used a lot of Google searching to find and learn how to use them
I understand and took a quick look at the site cited; but having done a lot of database programming in the 70's and early 80's as well as a bit of C, I don't think this really pays in terms of practical technical analysis. I have been using Worden for many, many years and also subscribe to Stockcharts.com, the latter to handle those symbols not available on Worden. It really makes no sense to me to write a new program when several excellent ones exist as there are a multitude of functions, sortings, et al available on the latter two. All one has to do is enter a symbol to come up with both technical and fundamental data using Worden which is available free if you accept ads-- I don't -- or at a cost of approx $300 per year which is tax deductible whether or not you make a profit one year providing you do make and take a profit over the years; the latter is subject, obviously, to your review and that of your accountant(s).

Using Worden I have some 70 chart layouts available, some of which I configured & others which were provided. I basically utilize 11 different layouts I created, all of which are selected using a Function key. And I view the charts in the daily, weekly, & monthly time periods.

My fundamental data is in columns and specific for each stock and I have an enormous choice therein as well. I currently have set up the following 10 columns of data:
Symbol, P/E, Current Price as a Percent of the 52 Week High, Return on Assets (ROA), Market Cap, Current Book Value/share, Debt to Equity Ratio, Volume, Dividend Yield, Beta.

StockCharts.com has excellent tutorials available as does Worden, though for beginners StockCharts is probably a better site. In the upper left hand area one clicks on 'Chart School' to get there. As far as texts, the following are all excellent:

Murphy, Johh J., Technical Analysis of The Financial Markets -- this is one of the bibles of TA.
Meyers, Thomas A., The Technical Analysis Course --This relatively short book is one of my favorites.
Pring, Martin J., Techical Analysis Explained: The Successful Investor's Guide to Spotting Investment Trends and Turning Points -- This is also considered 'the bible' of TA

Regarding purchasing any 'books' I always search abebooks.com first, where one can find the above books all at decent discounts depending on the edition et al.

all my best,
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