In an effort to better understand why the returns on my invested money are decreasing rather than increasing, I decide to open a self-directed trading account. Like everything I do in life, I put on my research hat and set out to learn everything about it in the shortest amount of time possible. After all, how hard can it be? Not as hard as that dang Russian Cinema class I took in Uni. Those Russian names are so long and hard to remember!
I give myself one day to accomplish the task of becoming a investment wizard in the the hours between late morning and tea time. Anything longer would just eat into my biscuit eating time, and that just won’t do.
I spend approximately 4 hours researching everything on the topic, then spend another 2 hours delving even deeper by watching snippets from the greatest finance movies of all time including, “The Wolf on Wall Street“, “Inside Job“, “The Big Short” and that one where Bradley Cooper takes a magic pill that makes him super smart and rich, but unfortunately ensnares him into a life of violent crime. Then I have a cup of tea, and waste approximately an hour considering all the smart things I would do if I had access to this drug and start making plans for an indoor bunker in my house to hide all of my money.
How much space does a lot of money take? Scrooge McDuck needed a warehouse for his giant money pile, but he needed a bit more extra space so he could swim in it. But money is dirty and I’m a germaphobe so I’ll just display my money pile behind plexiglass like a modern art piece.
So all in all, a perfectly productive day and if you don’t mind me tooting my horn a bit, I’m pretty sure I’m a market genius now. Buy low, sell high. Buy fear, sell greed. Short sell, high yield, bonds, ETF, yes yes, I feel very smart now!
The next day after watching one “Market Call” show on BNN, I admit that the people on the show may know a bit more than me. Also, Jason Donville seems like a nice, honest guy. He wears smart glasses and speaks with a bevy of financial lingo, whereas I still speak in investment cave person speak.
Jason says I should buy Valeant stock. It’s one of Canada’s biggest drug companies with a stellar record and an excellent management team. Done deal! The stock is pretty pricey at $301 a share, but Jason seems confident, so I take the plunge. I buy a couple more of his stock recommendations and figure I’m going to be rolling in money pie any day now.
6 months later.
Valeant stock plummets to $45 a share. I’m 85% down. SHHHHH##***T. I curse the stock market. I vow to never get involved with the dirty dealings of the market again. Both Jason Donville and Bradley Cooper lied to me. This was supposed to be easy with my excellent knowledge of the market and my eagerness to learn about it in one day.
1 day later.
The fact that I’m down a considerable sum of money eats away at me. I start jamming my brain full of the Financial Times, the Globe and Mail investor section, and Motley Fool. I can do this. I can win win win. I stay up all night plotting my stock picks. I feel like an evil mastermind. I chuckle to myself at how sinister it all is.
I go big that morning, betting on another rocky health stock. I buy low and sell high later that afternoon and make $1000. I’m pumped and totally hooked. I read everything and anything I can get my eyeballs on. I buy dodgy diamond stocks, failing airline stocks, tanked energy stocks in the hopes that I, like Bradley Cooper, turn my $1000 into a million dollars. Buy low, sell high! It should only take a couple of days.
My progress is slow as some of my dodgy stocks go down and I have no choice but to keep them another day, and then another, and then I’m down. Down in a gully of my own incompetent doing.
2 weeks later.
I’m exhausted from staying up all night reading the Financial Times, I’m drinking way to much coffee, and I’ve developed a mild twitch in my eye. I find myself yelling a lot of random words and feeling very unsafe. Clearly, I don’t have the bollocks to day trade.
I will however, offer financial advice to anyone wishing to make a quick 40% gain followed by a 60% loss. It all evens out in the end, right? You do the math ;)
Duane Storey
March 31, 2016 at 11:39 AMI’m a big fan of passive investing since it’s nearly impossible to keep picking winners with active investing. One of the best websites on the topic is the Canadian Couch Potato. Even Warren Buffet says most people should just buy index funds and be done with it.
Mostly Lisa
March 31, 2016 at 11:41 AMWarren Buffet is a man that knows many things. I should listen to him and stop buying dodgy stocks. PS How are you?? Long time!!
Duane Storey
March 31, 2016 at 11:45 AMI am good thanks! Where are you these days? We should grab a drank sometime if you’re someone close. I live up at Cultus Lake now in BC, but do lots of traveling too!
Mostly Lisa
March 31, 2016 at 11:50 AMComox :) If you are ever on the island let me know! I sometimes come up that way on trips to the Rockies as well.
Duane Storey
March 31, 2016 at 11:54 AMCool.. Ahh Comox, I had a girlfriend from there years ago. Interesting little community! But will do. If you’re ever out my way swing on by with the hubby, I always have lots of wine and beer, and it’s a pretty area!
Sathya
March 31, 2016 at 11:50 AMHa ha ha ! After trying my hands at stocks and being in a similar boat, its glad to know that I am not alone :)
When I hit the bottom, starting looking at options, and automated investing seems to be promising. May be some thing like Betterment (https://www.betterment.com/) might give better returns. As for me, am yet to just on that option, might be soon !
Mostly Lisa
March 31, 2016 at 12:00 PMyou are certainly not alone! will check out that site :) thanks for sharing.
David Davidson
March 31, 2016 at 1:41 PMI’ve enjoyed following your photography, but this is a side of you I hadn’t seen before. You may not be the world’s greatest investment counselor, but you write very entertaining short stories. Keep it up!
Mostly Lisa
March 31, 2016 at 2:23 PMwhat do you mean? you aren’t going to put your life savings into my stock picks? :( :P
Volker Maschmann from Denmark
March 31, 2016 at 2:11 PMHey Lisa. Ive been working in investment banking for 22 years. I have a large portion of my savings in stocks and even with my extensive experience I find it difficult like you to achieve returns as the current market situaition. I also own stocks in Valeant, fortunately I bought the first time after it had dropped about 50% from the top and I trippled yesterday as the stock looks oversold now. When contemplating the stock market try to apply Warren Buffets trading rules (google them!). They have inspired me for many years during my career and contributed greatly to my success, especially during the financial crisis during 2008-2009. On Valeant you could maybe apply Buffets rule: “Be fearful when others are greedy and greedy when others are fearful” what do you think, is it time to get greedy on Valeant now, and is it a wonderful company?
Mostly Lisa
March 31, 2016 at 2:30 PMThank you for your advice. Warren is the man. There are a great many who are betting on Valeant’s triumphant return and a few who made a killing with short sells during some of those minor rises in the last few weeks.There is no good news about the company right now and that is certainly creating an extremely volatile environment. I am worried about their debts and the fraud allegations. I am holding my stock for now, but I know it will never go back up to $300, so the question is, do I buy more betting on some more minor upswings or wait and sell when it is not such a huge loss? I’m already betting on a minor recovery, so I may just average down, although that is surely to cause some sleepless nights.
Mostly Lisa
March 31, 2016 at 2:32 PM–> http://www.theglobeandmail.com/report-on-business/valeant-directors-ceo-ordered-to-cease-trading-shares/article29472115/
canar
March 31, 2016 at 5:42 PMMutual funds don’t make you significant money but you will be away from loosing money. Otherwise, it is a small ball of a big Roulette!!!
Volker Maschmann
April 1, 2016 at 5:27 AMYes Lisa I know all the bad stories about Valeant and I’ve also read your link. The big question is wether all the bad news has all been priced in by now? The CEO and managament are banned from trading the stock as they probably have insider knowledge so thats not really surprising. The debt issue needs to be addressed but Im convinced that the banks/creditors will be very motivated to find a good and stable solution for the company as the company has a strong business model with good brand name and growth perspective. So it only leaves us with 2 questions as I see it:
1) Are there more bad surprises to come? (one of them may be diluting the stock by rights issues or stock payments to investors)
2) Is the company fairly valued at current levels considering all the bad news imbeded in the price already?
At an estimated P/E of 2,9, an earnings forecast of US$ 8,9 for 2016 and 10,9 for 2017 (that will probably be corrected downwards, but still…) and a stock price at only US$ 26,3 the company to me looks very cheap, no matter how you twist and turn the bad news surrounding it, unless of corse you think it will eventually go bust and stock holders will get flushed out.
I think its worth taking the risk and buying some more at these low levels. I read that Fidelity Investment just added a decent % of stock to their holding.
Wether we ever go back to 300 doesnt really matter, you have to look at the current pricing and decide if you think it is cheap or not and if you think the company will survive in its current form without diluting or erasing shareholder stocks , thats all ;-)
Mostly Lisa
April 1, 2016 at 11:04 AMI think you are right judging by the 11% rise today! Wow. Another crazy week for that stock. Hard to know when the best time to jump in again.
Joe Harlan
March 31, 2016 at 7:25 PMEnjoyed your story. Stick with it…I find the markets to be a good mix of art and science…should be right up your alley!
Perry Stanfield
March 31, 2016 at 8:45 PMHi Lisa, Sorry about your woes. Active investing can be rewarding but it takes a lot of time. For most people, including yourself, you could learn most of what you need to know about passive investing by reading ” The Coffeehouse Investor”. It’s a quick read, and will get you where you want to go quickly. Cheers.
Rıdvan
March 31, 2016 at 9:22 PMThat timothy sykes guy tells many things about hump and dump and how to use that stock promoting to your benefit. You kinda seem like a victim of that. I am not sure whether tims picks are accurate but what he is telling and experiences he told might be useful. Check it out for your own risk. http://Www.profit.ly. And I think you should definetely try Forex market and share the experience :)
Mostly Lisa
April 1, 2016 at 10:54 AMwill check it out! thanks :)
Imtiaz Ijaz
April 1, 2016 at 1:52 AMHello! I came to know you when you attended the TIME 100 gala dinner or something. I don’t know anything about photography. But, I could see that you love what you do. And so do I. I love investing in the stock market. It’s a wonderful opportunity to take advantage of other people’s mistakes of judgment. I suggest you read “The Intelligent Investor” by Benjamin Graham. Warren Buffett learned evrythng he knows about investing from this book. But, if you dont have time to read the whole book, read only chapter 8. If you dont have the time to read even a chapter, visit my twitter profile @beck723 ,i’ve summarized the whole book in a few quotes. If you just follow one of them throughout your investing life you’ll be successful. Good luck. Hope my summary will help you realize what you’ve been doing wrong.
Mostly Lisa
April 1, 2016 at 10:53 AMwow long time ago! I just bought the book on amazon, so I will definitely sink my teeth into Warren’s wise words. Thanks for the tip!
Imtiaz Ijaz
April 2, 2016 at 3:01 AMI don’t think you should try to figure out “when” is the best time to jump in again. What you should have done instead is try to calculate the intrinsic value of the company and buy when the market price is substantially below that and sell when the market price exceeds the intrinsic value. You’ll understand what i’m talking about once you go through the chapter 8 of The Intelligent Investor. It’s the only book you’ll ever need for investing. and to be honest, i don’t think if you’ve read the book first, you would not have bought the stock in the first place. because, you’d know that it’s far better to own a wonderful company at a fair price than a fair company at a wonderful price. When you bought Valeant at $301 a share it wasn’t a fair price and nor it was a wonderful company. I think you can learn a lot from this valeant trade, and i don’t think you’ve read the financial statements of the companies you’ve invested in. Just read the intelligent investor, it will change your investing life
Rob
April 1, 2016 at 2:58 AMI really hoped you were going to have had the kind of experience that would have tipped me over into a world I’ve secretly wanted to get into for a LONG time.
I’ve done well with some passive investments in the past, but your experience with the day-to-day stuff suggests it requires more effort than I’m probably willing to invest…
Mostly Lisa
April 1, 2016 at 10:47 AMValeant was a bizarre situation. Similar to Blackberry. My self-made portfolio is actually up 40%, thanks to Apple which I bought at $70/share. I’ve sold most of my sketchy ones now and bought some more stable ones like banks, but I’m still having fun gambling with a few. You do have to watch them everyday, but it’s kind of like watching a good gangster flick. #evilcorp ;)
Volker Maschmann
April 1, 2016 at 5:44 AMOn a different note, one of my friends asked me yesterday what I think about the stock market in general and I gave him this answer:
Volker Maschmann: “I believe we are stuck in a rangetrading market in Dax between 8700 and 10500 approx. I fear that stocks will have a hard time performing this year and that one can profit more from range trading the market rather than trying to pick a direction and stay with it all year. Yesterday I sold back 40% of the stocks I bought in january/february and I will sell the rest on any stock rally the next weeks. Im buying back those stocks cautiously beginning 9000 in Dax. In general I feal uneasy about the stockmarket and dont just want to be long and hold this year (as I’ve done previous years)”
Above I describe the levels of the German Dax index that currenlty trades at around 9800 (10000 yesterday morning) but my view is really relevant for all mayor western stock indexes. If you want to range trade the entire stock market as I suggest above and want to avoid bad news on single stock risk exposure like Valeant I suggest you trade ETF futures like Ishares S&P500 or Ishares EuroStoxx50.
These futures are tracking the index, so any single stock bad surprises have limited effect, they are very liquid, Blackrock the worlds largest investment company stands behind them, and the roundtrip cost (buy to sell) is very low.
Mostly Lisa
April 1, 2016 at 11:00 AMDo you think cashing out at this point is a good plan? I have a large portfolio with mainly blue chip stocks, but a few horribly performing energy stocks. Canadian energy stocks got hit hard this year. Do you foresee another crash? I have a few US iShare ETFs in health care and infrastructure. I’m looking more globally though. I worry about the future of the US with the impending election.
Imtiaz Ijaz
April 1, 2016 at 4:14 PMIf u want to invest in Bangladesh I have two suggestions for u. Take a look at RAK Ceramics (http://rakcerambd.com/investor-annual-reports.php) and Square Pharmaceuticals (http://www.squarepharma.com.bd/financial-reports.php). I can share my analysis with u if you’re interested in investing in my country. You might also wanna know that Norges Bank Investment Management just started investing in Bangladesh very recently. Remember, it’s unfashionable stocks that are the best deals.
Volker Maschmann
April 4, 2016 at 2:15 AMHi again just back from a very relaxing weekend in my country house by the beach :-)
To get back to your questions I would suggest that you sort your stocks into 2 categories:
1) The ones you love and never want to sell again – those are the ones where you would never forgive yourself if they doubled or tripled in price and you sold them too early so keep them (unless something dramatic changes)
2) The ones that you own just because you think its a good investment right now but are not convinced you want to keep until you’re old. Those are the ones you want to play around with. I would suggest starting to sell those into any market strength the next weeks and wait to pick them up again later this year when the market corrects. Set yourself a range target like I explained I did above with the Dax where you want to get in and out of the market. Dont set the range to tight and dont trade to often as your profits will deteriorate by fees. Play that range but do NOT expect to be able to hit bottom and top, so start buying when it starts to look cheap, the more it falls the more you buy and vice versa when it tops. The same you do with your ETF futures.
Dont play for money you can not afford to lose as it will push you to make wrong decisions driven by fear. You want to be on the other side of those trades, when others start to panik selling their stocks you want to stand ready to buy them at low levels.
Yes Energy stocks have been hit very hard, probably to hard, Ive also taken some nasty hits on buy to many to early and its probably to late to sell them now. I think the right thing to do is finding those stocks that you believe will survive in the long run, sell those u dont like and put the money into the ones you believe in and wait. It may take years before they make a come back. You are still young so be patient. Its all a function of the future oil price.
Volker Maschmann
April 4, 2016 at 2:55 AMOn the future of the stock market:
I dont worry that much about the US elections, they nomrally dont have that much of an impact and there are other things that are much more important as I see it. To sum them up:
1) The British “Brexit” vote on june 23 could really do some damage to Europe and the stock market if the UK decides to pull out of the EU as this may just be the start of an avalanche that could tear up the European Union as we know it with others to follow the exit. Equity markets all over the world could suffer
2) The strong US$ is probably hurting the US and other countries that are currency pegged to US$ (like China) more than markets anticipate. If the US$ goes even stronger it could hurt US and Chinese stock markets. So watch the US$ vs € and Yen.
3) China is becomming the world largest economy and we do not know what is really behind it, how the numbers are manipulated, if China will devaluate the Yuan and the extreme turmoil and avalanche of events this could cause. So watch news out of China but be critical about the truth in it. Watch the Yuan vs other currencies.
4) Inflation is very low, especially in Europe. The Japanese style low inflation low yield environement will start to hurt Europe but also all other western countries very badly if the central banks do not succeed in pushing inflation back up. Right now it looks like they wont succeed. This is the MAIN REASON why I am uneasy about the future of the stock market.
We all know that the stock market has been pushed to these artificially high levels by extremely low yields in the bond market, so in order to hunt for yield investors like youself have been forced into buying stocks. If inflation starts picking back up, stocks will have been a good investment, as future earnings will grow with future inflation so investors can already discount this and buy stocks.
If we however get future negative inflation (deflation) the effect will be the opposit one. Investors will fear future earnings be detiriorated by deflation and start selling stocks rather now than later. Every once and again investors will get pushed back into the market to buy stocks as an alternative to bonds so we will see a slow grinding lower bear trend in the stock market that could last for more than a decade. The Japanese stock market has done this ever since 1989.
So watch the oil price, CPI fixings and the inflation swap market (traded inflation expectation) in $ and €.
Mostly Lisa
April 7, 2016 at 10:46 AMValeant seems to be rebounding in the last few days. I’ve held onto what I’ve got with the hopes that I can sell with less of a loss. It will never rebound to $300, but maybe we’ll see $100?? I think I made the horrible mistake of buying when the market was up because all my other stock picks are down now. I set a limit to sell them when they go in the positive, and then I think I will wait with that cash in the hopes to buy when the market corrects. My financial advisor suggested global fixed income bonds, but I’m not sold. I’m looking at some low volatility US Equity ETFs right now. I’m also slogging through “The Intelligent Investor” right now. Hopefully, I will learn something, but I’m afraid my impatience will always get the better of me ;)
Volker Maschmann
April 7, 2016 at 5:47 AMAny reflection on what I wrote or did you lose interest?
Volker Maschmann
April 8, 2016 at 12:51 AMYes Valeant was definetely undervalued as I argued in my analysis above and probably has room to rise further. As I trippled at the bottom I have aready made o good part of my losses back but Im not selling anything before we hit the 60 mark, then I will sell 25% of my Valeant, another 25% at 75 and another 25% at 100. If it drops again I will buy each 25% stake back 30% lower from where I sold it. This is my plan and I am convinced that if I stick to it I will have turned my loss in Valeant back into a profit by the end of the year. Maybe this can inspire you?
On the stock market in general the way to play the market this year if you ask me is by using the volatility in your favor. My guess is that stocks will not make new all time highs this year, so buying and holding will not make you money this year.
The market will trade up and down a lot, probably negatively biased. Every time the market sells off and gets “oversold” it will be a buying oportunity. There are still a lot of investors out there like yourself that are desperate for yield and they will see any sell off as a buying oportunity. Due to this the market will not crash hard at any time this year I think. So the question here is buying into any sell off, holding the ETF’s for 7-10% and getting out again. If you can do this say 5 times this year you can make 25-40% on your portfolio, thats a better return than you will achieve by a buy and hold strategy this year I am convinced.
As a very good indicator of when to get back into the market you should consider watching the traded implied volatility on stocks called VIX VOL (google it). Every time this rises to high levels, the market is extremely nervous and investors are buying large amounts of put options. When investors own enough put options, the pain and fear of losing money on their stock holdings diminishes, and the stock market starts rising again. So: When stocks sell off and VIX VOL is at high levels, buy ETF’s!
On a final note: My 22 years of market experience say you have to be patient and work hard to make money in anything you do, in the stock market it is no exception. It is possible to make good returns, but you have to be smart, stay in front by defining a strategy, be disciplined, be curageous, show commitment, listen to your intuition and dont give into greed nor fear. Only then you will be successfull, maybe even very successfull!
Good Luck Lisa
Volker Maschmann
April 26, 2016 at 6:43 AMBrace yourself for a 10% drop in the stock market within the next weeks – that’s my guess ;-)
If you want to hedge your stock portfolio without exiting your most beloved stocks consider selling some futures instead
Mostly Lisa
April 26, 2016 at 10:14 AMthank you for letting me know! I just sold my managed stock portfolio bracing for a correction. I regret not selling my Apple stock a few weeks ago. Hopefully that will bounce back when the new iPhone is released.
Imtiaz Ijaz
April 26, 2016 at 11:24 AMHow far along The Intelligent Investor are you? Read Chapter 8 yet? Btw, you can follow @jasonzweigwsj (he did the Commentary on The Intelligent Investor). Recently I read one of his article where I learned this: “It’s remarkable how much you need to learn in order to discover how little you ever needed to know”
If Ansel Adams were alive today, would he have a Snapchat account? – Mostly Lisa | Photography tips & inspiration
May 9, 2016 at 8:25 AM[…] After a month on Instagram, I felt worse about my photography. I felt like my photos weren’t good enough or my content appealing enough for this new, hip crowd. I started changing the things I photographed and the way I shot them to gain more followers and likes. And the hashtags. Don’t get me started on the amount of hashtags you have to use on that platform. After a while, I was exhausted again. I had compromised my artistic vision for the platform’s vision and my creativity took another huge nosedive, much like my Valeant stock. […]
Volker Maschmann
May 11, 2016 at 3:51 AMCheer up Lisa, patience and indurance will get you to your goal so hang in there, you are doing the right thing, stay on the path
Mostly Lisa
May 11, 2016 at 7:45 AMCurrently feeling extremely indecisive in this market dip. Holding on to cash at the moment. Thanks for your encouragement! I just need to find the right path….
Imtiaz Ijaz
May 16, 2016 at 5:23 AMGuess who just bought AAPL!
https://mobile.twitter.com/beck723/status/732181977344839681!
Mostly Lisa
May 17, 2016 at 7:58 AMWHOA… ok that makes me feel better… I was getting antsy about this stock…
Volker Maschmann
June 7, 2016 at 12:16 AMIm surprised by the resiliance of the US equity market to bad news (poor earnings, poor jobs report friday) and the fact that future risk events are being totally ignored. Now that the dividend season is over and most dividends have been reeinvested the equity market normally rolls over and corrects, however this year it seems that investors are long of cash and short of ideas of how to invest it, so bad news and uncertainty about the future is simply ignored…at least for now. The next mayor event is not the Fed, as the poor jobs report will make Yellen hesitant on hiking and she will probably wait to see if the numbers improve over the summer. So the paradox here is that the bad report that paints a poor picture of the economy actually helps equities for now as the next hike has been moved out the time curve.
The next mayor event is the British BREXIT vote on june 23rd. If the Brits vote to remain in the EU we will see a relief rally in the all mayor world stock markets, if they vote to exit the effect will be devistating, especially for € zone stocks. This is my view. For now Im staying cautious and somewhat underinvested in equities as I still believe in a setback later this year.
The general range-trading view I stipulated ealier on this site has been correct for now, especially for european stocks that have traded within a 8-10% range the last 2 months, US equities within a somewhat smaller range. I strongly believe that this will continue the rest of the year, unless we see a mayor new event like a British EU exit or similar event of mayor significance.
Volker Maschmann
June 15, 2016 at 6:25 AMEuropean stocks are down 10-12% from when I wrote my “brace for a drop” comment in May. Strangely US stocks have not followed the drop but are being held up by a dovish Yellen and a bullish Warren Buffet it seems. With the weak US jobs data Id still be cautios. The Brexit vote next week will decide on the fate of the european equity markets, on a remain we’re going to be back up 10% at the top of the range, with and exit down 15% would be my guess. If you believe in a remain vote € stocks start looking cheap at current levels.
Volker Maschmann
June 15, 2016 at 6:25 AMHey Lisa have you given up this thread?
Mostly Lisa
June 16, 2016 at 8:22 AMHi! Just returned home from Iceland. My stocks didn’t fair that well while I was gone, but not the extreme that I thought they would. I ended up pulling a huge amount out when you warned me and have kept it in cash. I need to reevaluate…
Volker Maschmann
June 17, 2016 at 5:24 AMI’ve been almost everywhere in the world but have never seen Iceland even though its not that far away from Denmark and it was a part of the Danish Kingdom until 1944, need to go one day. Did you like it?
For European Stocks the Brexit referendum thursday next week will have a huge impact either way. My guess is that it will have a certain spill over effect on the rest of the worlds stock markets including the US. As the outcome of the referndum now looks to be a 50/50 I expect the market to jump friday morning. If you believe in a remain outcome you can bottom fish some attractive looking European stocks at current levels with a weak €. If you dont want to buy single stocks consider buying Ishares Euro Stoxx 50 or similar.
Volker Maschmann
June 17, 2016 at 5:32 AMAnd no need to say that if you think that an exit may be a probable outcome stay away and bottom fish after a collaps in the stock market from the 24th June going forward. Judging from speaking to the Brits that I know I do think that it is probable. The unfortunate politically motivated murder we saw in the UK yesterday has shifted the mood toward the remain side, however I think that this will shift back again next week.
Imtiaz Ijaz
June 25, 2016 at 2:10 AMRead this regarding Brexit https://twitter.com/beck723/status/746333760635887616
Also this http://blogs.wsj.com/moneybeat/2016/06/24/the-more-it-hurts-the-more-you-make-investing-after-brexit/
Volker Maschmann
June 28, 2016 at 12:40 AMSo the Brexit is a reality as I had been warning it could be. England is leaving the European Union. European stocks down 15% from the top and still looking vulnerable. If the US job data in July comes out weak US equities will go lower too so Id be cautios right now to invest. Stay in cash and wait for a bigger drop in equities before you go in again. European equities start to look cheap if they drop a further 5% from here. This is the level from where I expect them to bounce back so watch the DAX at 8700 and EUROSTOX50 at 2500. Consider buying some European stocks with the strong dollar you pick them up cheaply here. If you dont like to buy single names buy Ishares eurostox50 or similar. Good Luck
Volker Maschmann
August 12, 2016 at 2:05 AMThe stock market seems to have rubbed off the bad news of the Brexit and any other bad news in favor of the extreme low yield environment that is pushing stocks up due to the fact that there is no alternative for investment. Personally I would have thought that the Brexit vote would have had a more profound negative impact on world stock markets, but apparently it did not, mainly due to the reason that a contagion effect of other countries wanting to leave the EU has been avoided or contained – for now. With the Chinese economy showing signs of improvement and the oil price having stabilised in a “digestable” range investors have started buying stocks again in the lack of alternatives. Me and my collegues here at the investment bank are quite puzzled about this last move up and refuse to jump onto the ban waggon for now. But we do however not want to go against this move either, so for now we sit back and watch.