Fundamental analysis (FA) is aimed at capturing both systematic risk and idiosyncratic risk associated with a given security. While the market risk encompasses the macroeconomic factors – like monetary policy, economic cycle or unemployment rate, the residual risk includes company-specific factors – like financial ratios, management style or market share. Technical analysis (TA) is a method of evaluating securities by analyzing statistics generated by market activity, such as price and volume. It does not measure the intrinsic value, but instead it uses charts to identify patterns that can predict future price activity. Knowing how to perform both fundamental and technical due diligence is essential for successful investors and traders. Continue reading ‘FA, TA or FA&TA?’
Monthly Archive for June, 2010
The American Recovery and Reinvestment Act (ARRA) signed into law by President Barack Obama on February 17, 2009 did rewrite Section 111 of the Emergency Economic Stabilization Act of 2008 (EESA) and did provide modified rules for the Troubled Asset Relief Program (TARP). The Stimulus or Recovery Act is worth $787 billion and it contains multiple programs: Tax Cuts – $244 billion, Aids For State and Local Government – $217 billion, Relief (Extended Unemployment, Health Insurance for Unemployed) – $120 Billion, Infrastructure – $101 Billion, Energy Efficiency – $59.5 Billion, and Human Capital – $45.5 Billion. TARP allowed the US Department of the Treasury to purchase up to $700 billion of difficult-to-value assets – MBS and CDO – from banks or other financial institutions. Since the enactment of TARP in October2008, more than 360 US banks have received at least $353 billion of funds from the Treasury. Continue reading ‘TARP Barometer’
Between Fame And Pain
As a continuation of the two articles “Becoming A Trader”, I am prepared to jump into a very delicate subject: finding the balance between the professional trading career and the personal life. Needless to say that one has a better chance of winning the lottery than becoming an accomplished trader and concurrently having a successful personal life. For me, there is no magic one-size-fits-all solution when solving for the optimal balance of the amount of time spent earning money and the amount of time spent with the family. Bottom line, it is all about time, not about money. Whether we are at the beginning of our career or toward the end of it, we are constantly trading our time for money. Everyone knows that the amount of time we have at our disposal is limited and irreversible. If we could find ways to earn more money, we could never make more time or turn back the clock. Continue reading ‘Between Fame And Pain’