The Growing Concerns About Predictability of the Financial Markets

It is nice to be back to the modern world where internet is actually functional. One actually has to experience the inconvenience to appreciate how great the internet is nowadays. Learned quite a few tricks to deal with bad internet connections and I will post them in coming weeks. For now, it is catch up time for me in handling the huge pile of emails to response to.

Long Term Predictability of Financial Markets

A recurring theme I learned from my clients over the past few weeks, for the first time, that both old money and institutions are very concern about the predictability of the financial markets around the world. I am not talking about just the major ones like stocks, bonds and real estates. I am talking about global allocation and investments of all kinds. Unlike the previous few financial crisis, where these movers and shakers actually know that troubles were coming at least six months before anyone notice there is a problem, this time they are also in the dark.

In the past, when majority of investment vehicles are so overvalued like now, the major players already scaling out of various markets and park the excess cash on the side to wait for the golden opportunities to enter the markets again for long term multiple fold gain. Their actions actually produce the tops in various markets in the past as I explained in STOPD. They have the confidence and expertise to focus on protecting their capital while everyone else are still chasing returns.

This time around, however, the expected weaknesses in global assets that normally follow the overall economic down turn has not materialized. Well, I should say that it has not materialized in the way these major players expected. The key reason is the participation in the game by the central banks around the world. The direct involvement in various financial markets by these central banks changed the way how the global markets behave. This is not a good thing though. The central banks are making the global economy more fragile and more easily to break as people who are in the position of decision making on majority of global assets cannot find a reasonable course of actions to handle the current environment.

Long term investors no longer want to play the game because they cannot see clarity 5 to 10 years down the road. Such problem used to happen all the time but limited to certain part of the world or certain sector of the global economy. This time, as all major central banks are involved in rigging the game, there is no practical way to shift away from bad investments. The choices are limited to bad and very bad only. No wonder the swings in all asset classes are getting so volatile – only the active speculators and market makers are playing the games right now while everyone else are staying away.

Revamp of Site Design

Taking input from several savvy SaaS investors,I will revamp the website in coming weeks. The goal is mainly to streamline the front page design so that it is much cleaner and easily to navigate. I do not know how the site will look like at this point but I am sure it will be more friendly for more people.

I am also reviewing the advertisement placement on the site. As the site design changes, it is a good time to check if it is really worthwhile to put ads on the site as they also slow down the overall access speed. I have not decided what to do with this yet. Will keep you all posted about it.

Direction of My Writings

Over the years I have written lots of useful materials on trading and share that on the site. During the past few weeks when I have extra time on hand to reflect what can be done to make things better, I discovered that it is about time to switch my focus to write on the more advanced materials about trading. I am not talking about stuff like exotic calculations here. I am talking about providing materials with more depth on single topics that cannot be done with online articles.

Those of you who have read my articles probably know I have series of articles with each part spanning thousands of words. But that still cannot solve the issue of the need to have illustrations, tables, etc. for full discussion of certain concepts in trading. I plan to spend more time producing this type of research materials which I think should help many beginner traders to really expand the depth of their knowledge.

As my time is limited like everyone else, if I focus on producing the advanced materials, I will have less time to write articles for the site. I do not see this as a big problem going forward as new readers will have enough materials to digest from what I have written already while long term members of the site are more likely looking forward for the advanced materials.

I am open to discussion about this. Just drop me a line telling me what you think.

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