An article Saturday written by Jonathan Chevreau and published by the Financial Post is titled ‘Physician, heal thy portfolio’ – reading time 4 minutes.  As an investor/trader in the financial markets you might find it an interesting read.  Chevreau discusses what he calls three types of investors, being as he see things:

• first, those who delegate management of their investible wealth.  My comments:  I suspect this makes up a large majority of those who have their investible wealth in the financial markets.  My reasoning is largely based on two things (1) most of those who delegate responsibility to money managers to manage their money do so because they don’t have what they think is the required knowledge, business judgment and analytic skills to either manage that money or collaborate in the management of that money, and/or (2) they prioritize their time to do other things.  While that is fine as far as it goes, in these changed and changing investment markets I applaud those who have their money managed by the best of the advisors and advisory firms.  I feel rather badly for those who have their money managed by money managers who are less competent and less informed.  Where the latter is the case, I see those investors as being the proverbial ‘deer in the headlights’, and increasingly so as time passes;

• second, self-directed investors, who Chevreau says accounts for less that 5% of all investors.  My comments:  I don’t know if Chevreau’s percentage is accurate.  I do think as time passes and more and more people (I think most over 45 years of age) become more knowledgeable as to the workings of the financial markets and the risks involved in participating in them, that whatever the current correct percentage is it will grow over time; and,

• third, what Chevreau calls collaborators who he defines as “former self-directed investors looking for more structure and wealth-management tools for tax, estate and succession issues”.  My comment:  I rather like the term ‘collaborators’, but my definition would be different that Chevreau’s.  I think what will happen over time is that more and more investors will become more involved with the management of their investible wealth, and increasingly will collaborate with their investment advisors in a more interactive and detailed way than they have in the past.  I also think the best of the investment managers will welcome this process.  I believe two things with respect to what I see as a migration over time of more investors becoming more involved with, but not taking full responsibility for, the management of their investible wealth:

• I see this as being extremely healthy and positive for investors who invest the time and effort of learning as much as they can about the world economy, specific country economies, investing in the financial markets, and developing ever more collaborative interaction with their investment advisors; and,

• the Internet with its increasing number of ‘Investment/Trading Websites’ will prove to be an ever more significant ‘enabler’ of that activity – or so I think.

Chevreau does not discuss ‘traders’ in his article.  As you know if you read these e-mails, I believe traders who trade large market capitalization stocks are playing in a sandbox they probably ought to avoid.  I think this because of the high volume algorithmic computer trading that seems to be increasingly dominating the financial markets.  Trading in small capitalization stocks, be they resource stocks or otherwise, I currently think to be ‘quite a different thing’.  This is because I can’t imagine hedge funds and others being serious ‘trading participants’ in those markets where from what I have read those who employ high volume algorithmic trading strategies need the ability to instantaneously trade in large $ amounts in liquid stock positions.

StockResearchPortal.com has been and is being developed to serve the needs of the self-directed investors and traders, and the needs of the collaborators and their investment advisors.

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Possibly Related Posts:

• Dow Weekly Gains/Losses!
• What Value Do You Give To Your Time?
• Coming Derivatives Crisis?
• The Equity Markets and Value?
• Investment Self-Reliance and Yesterday’s Market Recovery!

The Dow Gained 787 points (7.0%) in the trading week ended last Friday, December 2, and 1.9% from its close on November 18 to its close last Friday.  From my perspective, the volatility and upward push by the Dow does not resonate with the economic news continuously coming out of the Eurozone, and the general economic morass that I believe continues to prevail in the U.S.  This, irrespective of a limited number of monthly statistics (consumer confidence and the unemployment rate to name two of those) that seem to be taken by many as things that ought to be viewed positively by the financial markets.

I say that may be fine for ‘trading markets’ as far as it goes, but these reported statistics are meaningless in an ‘investing market’ that looks to long-term prospective results and discounts those to present value.

Something to think about.

Visit Stock Research Portal for stock market data, analysis, and research on over 1,600 Mining, Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

Possibly Related Posts:

• Three Types of Investors – and What About Traders?
• What Value Do You Give To Your Time?
• Coming Derivatives Crisis?
• The Equity Markets and Value?
• Investment Self-Reliance and Yesterday’s Market Recovery!

The principal reason that I have developed StockResearchPortal.com is that I could not find a Resource Stock Research Website that provided me in one place with all the information that I wanted to screen potential stock investments. I also found many of the websites I visited hard to navigate and confusing.

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Unless you use StockResearchPortal.com every day, I wouldn’t expect you to realize those same time efficiencies.  That said, in a recent survey Subscribers who responded said that on average they saved about 30% of the time they otherwise would have spent on their research by using StockResearchPortal.com.

With that background, based on the assumptions set out in the following table, if you value your time at Cdn$50 per hour (and we think it likely you will value your time per hour at a rate higher than Cdn$50) and you spend between 5 – 20 hours each month researching Canadian Mining and Oil & Gas Stocks, we have arithmetically calculated your Monthly Subscription Return (your notional profit) if you are one of our existing Subscribers at between Cdn$51 – Cdn$276 per month.  I suggest you take a few minutes to study this table, and then take advantage of our current Special Subscription Price Offer.

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Visit Stock Research Portal for stock market data, analysis, and research on over 1,600 Mining, Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

Possibly Related Posts:

• Three Types of Investors – and What About Traders?
• Dow Weekly Gains/Losses!
• Coming Derivatives Crisis?
• The Equity Markets and Value?
• Investment Self-Reliance and Yesterday’s Market Recovery!

And yet another article from The Economic Collapse Blog – read ‘The Coming Derivatives Crisis that Could Destroy The Entire Global Financial System’ – reading time 5 minutes.  I suggest you read and think hard about what it says.

I periodically have written in these e-mails about the intuitive concern I have with the derivatives market and its apparent size and scope.  Most recently I expressed these concerns on October 5 (‘U.S. Banks – Derivatives – Must Read’ – reading time 2 minutes), and again on October 17 (‘Derivatives – Must Read’ – reading time 2 minutes).  The referenced Economic Collapse Blog article:

• Suggests the World Derivatives market may be much larger than the U.S.$600 trillion that I have mentioned in past commentaries – perhaps by as much as 2.5 times (U.S.1,500 trillion).  Frankly, I don’t think that matters much.  U.S.$600 trillion itself is 8 times the current estimated annual World GDP;

• Provides general definitions and commentary for and on Derivatives.  I suggest this is useful background to gaining a 50,000 foot view of Derivatives;

• References an April 2010 estimate of the aggregate market capitalization of all publicly traded stocks that then existed at about U.S.$36 trillion.  Even assuming that amount is as much as =/-U.S.$50 trillion (numbers quoted by Wikipedia in 2008), if U.S.$600 trillion in Derivatives actually are outstanding, that amount dwarfs the aggregate market capitalization of all world public companies by over 10X.  Even if this multiple is wrong Derivatives are known or thought to be extremely significant in U.S.$ terms.  It seems remarkable that Derivatives are getting comparatively little attention in the mainstream media or elsewhere;

• references (I think perhaps very importantly) a December 12, 2010 New York Times article titled ‘A Secretive Banking Elite Rules Trading in Derivatives’ – reading time 10 minutes.  That New York Times article begins:

“On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.  The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential”.

Think of that, and then wonder as I do (and I want to be clear here that this comment is entirely speculative on my part as I have no knowledge of U.S. rules and regulations in the context of such meetings) whether such meetings are ‘within the law’ in circumstances of U.S. competition, price-fixing, oligopoly, etc. Federal and State laws.  In any event, if indeed such meetings have been held in the past and continue to be held, that strikes me as very large ‘red flag’ that ought to cause investors and traders in the equity markets to think very hard about Derivatives and the possible consequences of their existence.

I try to make clear in these commentaries what I know and what I don’t know.  I don’t as yet know enough about Derivatives to ‘put in your eye’.  That said, I continue to intuitively be concerned that outstanding Derivatives represent a form of colossal financial market overhang that could produce an avalanche effect if there is another financial markets crisis ostensibly brought about by Eurozone Sovereign Debt, intransigent U.S. politicians, another technical recession in the U.S., a reduction in China’s annual growth rate, or one or more better understood current economic risks.

All up, all in, I suggest you read the referenced Economic Collapse Blog article, read the other articles and commentaries referenced in this commentary, struggle to become more knowledgeable about Derivatives, struggle to understand the possible economic consequences of their existence, and forward this commentary to anyone you know who invests or trades in the financial markets so they can do likewise.

Visit Stock Research Portal for stock market data, analysis, and research on over 1,600 Mining, Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

Possibly Related Posts:

• Three Types of Investors – and What About Traders?
• Dow Weekly Gains/Losses!
• What Value Do You Give To Your Time?
• The Equity Markets and Value?
• Investment Self-Reliance and Yesterday’s Market Recovery!