4aapl
Moderator
Posts: 3,632
|
Post by 4aapl on Mar 9, 2022 20:52:15 GMT -8
By Liam Vaughan
I'm not through this one yet, but it's so fitting that I wanted to mention it now, and add to the review later if needed.
It's about the flash crash on May 6th, 2010, and the causes. The one this book mainly is about is Nav (Navinder Singh, seemingly not the Nav here on the board), his rising through the ranks, his competing with traders and then HFT, and then the law going after him.
I'll skip posting any big giveaways. This has been entertaining, and a quick read, while touching on a lot of stuff in financial markets. Like "Memoirs of a Stock Operator", also mentioned in the book, it points to some of the edge case things that occur at times, whether through people spoofing or cornering the market, or just playing it as a game.
A great read!
|
|
4aapl
Moderator
Posts: 3,632
|
Post by 4aapl on Mar 12, 2022 18:56:22 GMT -8
One of the lines in the Epilogue summed up a problem hit in the book, but also the general dumb money moves that some people make when they make too much too quick, or want to keep compounding it too quickly:
My takeaway, from this and real life, is to try to not get too speculative in the bubbly times of euphoria. When things are going really well, and you start thinking about cars/houses/planes/businesses/ranches/islands or the similar based on the level that you are at, that is a time to be careful. Just as many of us have noticed in the past, with "car talk".
It was a great book, and much more fiction-like than most of the non-fiction I read, while also giving background on a major financial issue that was only about 12 years ago.
|
|
Dave
Member
"It's tough to make predictions, especially about the future." Yogi Berra
Posts: 4,101
|
Post by Dave on Mar 13, 2022 2:04:11 GMT -8
Thank you 4aapl for reviewing this book, especially at this appropriate time. It sounds very insightful. Compared to most others here I am new to investing and am one that is dependent upon its returns. It’s said that experience is the best teacher, but as I’ve also learned, the lessons can be very expensive. And I hate to continually make the same mistakes over and over, as I’m sure most do. One lesson that I’ve been fortunate enough to learn is that when the trend is rising we tend to believe that it will always continue to rise and when it’s falling that it will also continue to fall. But even this lesson is dependent upon the amount of time that is available to each of us. The ultimate unknown. We have been blessed with living in a bull market where one would have to work very hard to lose money, especially with AAPL, but it appears that the bear is taking charge and any mistakes can be devastating. “The market can be irrational longer than you can stay solvent.” Time is the enemy. And I hope that I am wrong.
|
|
4aapl
Moderator
Posts: 3,632
|
Post by 4aapl on Mar 13, 2022 8:45:48 GMT -8
Thank you 4aapl for reviewing this book, especially at this appropriate time. It sounds very insightful. Compared to most others here I am new to investing and am one that is dependent upon its returns. It’s said that experience is the best teacher, but as I’ve also learned, the lessons can be very expensive. And I hate to continually make the same mistakes over and over, as I’m sure most do. One lesson that I’ve been fortunate enough to learn is that when the trend is rising we tend to believe that it will always continue to rise and when it’s falling that it will also continue to fall. But even this lesson is dependent upon the amount of time that is available to each of us. The ultimate unknown. We have been blessed with living in a bull market where one would have to work very hard to lose money, especially with AAPL, but it appears that the bear is taking charge and any mistakes can be devastating. “The market can be irrational longer than you can stay solvent.” Time is the enemy. And I hope that I am wrong. There's going to be good times, bad times, and flat times. Some are related just to the stock market, some to the stock, some to the economy, and some to other things. A pandemic, terrorist attack, or war all tangentially hit the economy, but their affect on the market is much quicker. It's the wall of worry, worried about something much more (or occasionally much less) than it logically should account for. Or often, it's just hard to quantify, especially with high probability. But in the longer term, stocks have gone up much more and much more often than they have gone down. That's tied to the company, US economy, and global economy, and it's possible that everything could change. But the easy relationship is to worldwide population, since as it grows, and in general life improves (thus needing more stuff and buying more stuff), then the general economy is going to improve. At some point that might change, and some things talk about population growth slowing down globally as things change (the basics are smaller families since less redundancy due to childhood death, though less farming families works in there too). But for now, if you have a decently long term view, investments should go up. For the downside on times where you have to think shorter term, I'd suggest looking at the market falls/recessions/crashes of the past 30-50 years, look at how much they fell and how quickly, but mainly look at how quickly they recovered most and all of the pre-decline prices. Some times took a while to hit full recovery, especially in 2000 which really was bubbly. But the timeframe shrinks if instead looking at only part of the recovery, say to 10% off the top. I don't remember the times right now, but it shrank the timeframe considerably. Things can always go down, and for a variety of reasons. But to me being able to quantify the time and magnitude helps make it much less of a psychological issue. Back to that population thing, I found "Factfulness" a good read, which basically looked scientifically at a lot of things, worldwide and in the US, to see that things are improving. Sometimes with the news cycle it's hard to remember that. www.amazon.com/Factfulness-Reasons-World-Things-Better/dp/1250107814OTOH, "The boy who harnessed the wind" showed me realities that some face that I just don't know about. For financial books, one of Ken Fisher's most recent (I read, liked, and recommend all of his books) had recommendations of 50-100 books. That's a great place to look, and I've enjoyed some of the historic ones, already having read "Memoirs of a Stock Operator" and a couple about the various manias, panics and crashes, but his suggestions have me read one about Goold, back in the age of railroad tycoons. There's lots of stuff out there. I get all of these from my local medium sized library system, often reading about one a month, though my rate might be 2 a month currently. It takes a while, so I try to get good recommendations, sometimes keeping a list. Like movies, there are so many options out there and it takes a chunk of time, so I try to watch (or read) only ones that are at least above average for what I am looking for.
|
|
4aapl
Moderator
Posts: 3,632
|
Post by 4aapl on Mar 13, 2022 10:56:39 GMT -8
One more quote from the epilogue, which many of us that have done well could probably relate to, even if we aren't addicted to trading but may get too used to AAPL providing oversized returns.
(pulling out parts that would give things away)
|
|