BeautifulWorld.me

Monday, February 20, 2012

Romney on the Obama failure

BeautifulBible is my second blog alias.

I am a Christian for all my life, but it is evident that this world is formed and manipulated by "666" for a very, very long time for "Money" and "Power". Using faith as tools to gain more power for themselves.

God has shown me "The Real Truth". Blindly following false preachings is leading mass to slaughter houses -- like sheep herds.

Romney explains Debt bubble --- Obama debt bubble + market pump scam

http://www.cnn.com/video/?hpt=hp_t2#/video/politics/2012/02/14/sot-romney-obamas-budget.cnn

Market pumping up is not really because of Nobama -- but main reasons are something else which I will not note. It's insane debt bubble market hype which really started in Sept-Oct 2011 when Europe starting to not allowing shorts with the reasons which I said I will not say what it is.

It's horrible blood bath with market hype.

Greece saga is never ending market manipulation factor and more in the bloodbath bag as most of European nations are bankrupted just similar as Greece.

Markets are detestable squeeze blood bath again.

@ES 1366.50 6.75 0.50% 190,288
@NQ 2592.50 10.50 0.41% 15,819

Market hype bankrupting the world

Head and Shoulders formations are so often visible -- virtually all the time for the wave formations are made up with "H&S" formations of all kinds including "Adam and Eve" and "Double H&S" --- Up and/or/side-by-side Down (inverse).

Markets are so pumped up with bags of debt bubbles, it is scary to take blood bath as markets only lured bears to squeeze regardless what fundamentals or realities are saying.

At the moment, markets are dangerous if you are betting other than sitting tight running up and riding the debt bubble joy ride < *scumbags of blood bath squeezes >.

Horrible market except those who are heavily drugged up with debt bubbles riding high ~~~~~ horrible hype high. Any high school students can run up debt and pump markets. Just print and hire programmers to do what Nob has done.

Saturday, February 18, 2012

Don't Be Fooled By Beta Disguised As Alpha

There are two broad investing approaches: investing in an index or trying to beat that index. The first approach is called "beta" investing and the second is called "alpha" investing. It is also obvious that the beta investing approach does not require much skill on part of the investment manager, and an investor should therefore seek to minimize the fees he pays to access beta returns.
The second approach, alpha investing, does require considerable skill on part of the investment manager, and therefore those alpha strategies come with moderate to high fees, depending upon the skills and track record of the investment manager.
The challenge for the investor lies in differentiating between a true alpha strategy and one that is simply beta in disguise. True alpha-generating managers are few and far between, and even they do not produce alpha on a consistent basis. In the paragraphs below I will highlight some of the ways I create efficient portfolios for my clients when assessing and differentiating between alpha and beta strategies.
First, let us look at some math to calculate the alpha of a strategy. Here is a practical approach to calculating a strategy's alpha:
Alpha = Ra - [Rf + Beta(Rm - Rf)] - Fees
Ra is the asset's return
Rf, is the risk free rate, usually taken as the 1 Year US treasury bill rate.
Rm, is the return of the underlying index that the asset is trying to beat.
Beta is a measure of the sensitivity of the asset's returns to the market returns, also called a measure of the systematic risk. So if the market volatility was 10% and the asset's volatility was 20%, then the asset's beta would be 2.
Fees are all the fees charged for accessing that strategy
http://seekingalpha.com/article/374671-don-t-be-fooled-by-beta-disguised-as-alpha?source=email_partial_daily_dispatch&ifp=0
Generally, an investor makes money in 3 types of strategies:
1.Mean Reversion Strategies: After a period of volatility that can be caused by a number of factors ranging from massive institutional money flows, market news to position liquidations, prices of securities might deviate from their true intrinsic value. Mean reversion refers to the movement of the security price back to that intrinsic value.
2. Momentum Based Strategies: The second way an investor makes money in a market is by following a trend. These trends can be short lived with durations of a few weeks or very long lasting like the Internet boom or the Asian equity market boom.
3. Carry Trade Strategies: As the name suggests, carry trade strategies involve selling option premium or buying high yielding assets and financing them with short term cheap borrowings. Carry trade strategies thrive in a market with cheap credit and low volatility.
Each of the above mentioned strategies has a time and place based on the economic cycle. Some of these strategies can be executed on a long only basis, especially the long duration momentum based strategies, by buying ETFs, while some require the expertise of a hedge fund manager's proprietary trading methodology.
The world of investing has changed quite dramatically over the past few years. As trends have disappeared, buy and hold mutual fund type strategies have not worked in over 10 years. Making predictions about a coming year based on the best macro-economic analysis also does not work on a consistent basis, which is why the traditional hedge funds have suffered of late. The investing world is becoming very fast paced and technical.
Some of the true and consistent sources of alpha I have found are in pure trading strategies that are driven by systematic algorithms, rather than human emotions. I like to study some of the latest advances in the field of statistical modeling that have taken place over the past decade, which have given rise to a new generation of systematic trading strategies. For the next few years, investors would be best advised to seek out investment managers that understand and can create a portfolio of such systematic strategies to generate alpha for their investors.

Alpha market analysis summary

Thursday, February 16, 2012

RIMM

SPX daily

$COMPX    2915.83    -16.00    -0.55%    1,912,115
$INDU    12780.95    -97.33    -0.76%    857,524
$INX    1343.23    -7.27    -0.54%    2,997,009

Moody's May Downgrade 17 Banks, Securities Firms

Moody's Investor Service warns it could downgrade the credit ratings of 17 global banks and securities firms due to more fragile funding conditions, increased regulatory burdens and a more difficult operating environment.