How to turn $100 into $9.6 Billion

Elizabeth,

The futures are looking weak and indicating a nasty opening in the market in the morning (if nothing changes between now and then)...so some traders/investors may have felt that it was time to sell and lock in profits in the fiber optic sector and look for a lower re-entry on those particular stocks.

We've had quite a run-up in the market in the last few days so it's time for some consolidation.

Many keep an eye on the futures and that can also cause a lot of after hours selling.
A good place to check the futures is http://www.cme.com/cgi-bin/gflash.cgi

I don't know what I am doing up! Just noticed that it's almost 2 a.m. here. . . so hope my posts aren't nonsensical at this wee hour of the morning - a la the 'fuzzy brain' in need of R&R - think I better take it to bed!

:)
Amber

> But, what's going on when earnings are
> strong and stocks in that sector all trade
> down after hours. Any explanations or
> comments, anyone??

> Regards,

> Eliz.




http://www.cme.com/cgi-bin/gflash.cgi

Amber, thanks for the two posts to my question. I'm rushing off to do some errands. If I've got any more questions or comments, I'll post them.

Regards,
Elizabeth,

Hi Michael,

Interesting observations.... :)

I guess it could partly be about instant gratification.... I guess it's dogma that instant gratification is more appealing than having to wait.... :)

And also the risk factor can be very exciting! There's one guy I know, he's a retired security guard.... He's day-trading with around $60,000 (his life savings so far).... I honestly don't know if he's making money or losing it, but (for better or worse) he loves the thrill of moving so much money around....

Though that's nothing....

Willy (the FX futures broker/trader I've mentioned before) told me that his biggest trade as a broker was 1 billion German marks on behalf of a bank....

(That's a bit over US$400 million today, though back then it probably would have been closer to around US$700 million.... It ain't peanuts!)

He said when that order came in, his heart started to thump! (Apparently these FX futures brokers have to pay for any errors they might make -- like if their fingers slip on the keyboard -- out of their own money!)

He told me that trading several million dollars worth of FX futures contracts at a time feels like nothing to him now.... He's done it many many times every day for 26 years....

But hundreds of millions of dollars worth still gets his heart thumping!

By the way, Michael, I've been looking through your site again, and you have a GREAT tips section, with some great tips! I've found myself looking through the newspaper classifieds regularly on the basis of some of your advice.... :)

Dien Rice




The Michael Ross Zone.... :)

You're right, this is very interesting -- many people are interested in the fast buck, rather than slow and steady growth.

An example of slow and steady growth:

Suppose I could match Warren Buffett's spectacular 23% pa average return (quite a difficult feat!).

If I invested $10,000 now, at that rate, until I retired at 65 (45 years from now, I'm just 20), I'd retire with $111,104,081.85. Not a bad retirement package.

I suppose that's why I've channelled $10,000 into investments now, and put off buying myself a nicer car.

But now let's look at the quick and fast buck.

Personally, I think it's understandable why there's such an interest in it.

Just look at the state of the market we're in -- The US has experienced a long bull run. The market (with a few exceptions like tech stocks earlier this year) has mostly gone up.

This can give people the feeling of invincibility.

Let's say I manage a portfolio and I get a 30% return quickly on some flash stocks. My guess is many people would react to that thinking they're highly skilled, on top of the world, and so forth.

Perhaps in reality the return was more to do with how the market has been going & luck rather than skill.

But nobody's going to tell them that. And as such, they continue on that course.

But what happens if there's suddenly a bear market? Or a crash? Not a correction, but a crash?

Profits dwindle, and interest in the stock market generally declines.

Now I'm not saying that I'm totally against risk.

On the contrary, I don't mind taking big risks along as the numbers stack up in my favour and the risk/reward payoff is favourable for me.

I just believe that taking big risks and assuming high payoffs will occur all the time is not the wisest thing to do.

But naturally everybody has their own tolerances for risk, so everybody is left to their own decisions. :)

- Thomas.

> Go back in time and invest in the very same
> things Warren Buffet did.

> A while back there was a thread. In that
> thread passive income was mentioned.
> Investing for the long haul was mentioned.
> Slow and steady growth was mentioned. Only a
> few people were interested.

> Recently a thread appeared. In that thread
> INSTANT WEALTH was mentioned. Buying large
> volumes of "stock" with small
> investments was mentioned. The whole board
> went nuts over it.

> While the only thing I know about the stock
> market is that the broker makes money when
> you buy and when you sell (regardless of
> whether you made or lost money), I am a good
> observer. And what I saw is interesting.

> It seems to me that most people would rather
> make a quick buck than go into something for
> the long haul. Even if the long haul makes
> more sense or is a "safer" way to
> go. (matter of opinion of course)

> Okay, so this is nothing new. I just found
> it interesting to see it played out in
> living technicolor on the one board.

> Hmmm.

> Michael Ross.