Tag: investors

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  • Modern German Investors

    Modern German Investors

    Modern German Investors 4Who are modern german investors?  Why are they popular? How do they differ from others?

    By Traders-Paradise Team

    Modern German investors escaped traditional limitations. They are truly representatives of modern times. Young enough to understand the requests of modern times. They are strong enough to ignore what is wrong in traditional opinions. And, the most important, modern German investors have the knowledge to build their own empire.

    Oliver Jung is among Modern German investors

    Modern German Investors

    Oliver Jung is one of the modern German investors. He was born on July 5, 1972, in Heidelberg, Germany. As a boy, he spent most of his childhood in Hockenheim in southern Germany.

    Later, he relocated to Karlsruhe.

    He attended the Technische Universität Karlsruhe, the University of Karlsruhe. When he was 20, he got a degree in computer science.

    As a student, Jung showed interest in Internet technologies. Today, investing is one of his main interests. He participates as founder, the consultant also, in a big number of companies all around the world.

    Jung’s first company was eCommerce consulting “Entory AG’. He founded it in 1997.

    Only 4 years later he sold the company to Deutsche Boerse Group, which is the giant operator of stock exchanges in Germany.

    In that time Jung’s company reached about €100 million of annual sales.

    After this purchasing Jung became a member of the Executive Board of Deutsche BĂśrse Systems AG. He held that position for almost one year, not longer.

    In 2003 he started to invest in internet and mobile companies.

    Form 2004 to 2010 Jung was investor and consultant in various companies in Germany and over the world. Among others, Xing, StudiVZ, Canadian Beyondtherack, Russian KupiVIP, Brazilian Brandsclub, Markafoni from Turkey. He was an investor in Australian Spreets which was sold to Yahoo 2011.

    The other company sold to the bigger one was Brands4Friends. It was a German company sold to eBay and Facebook.

    Jung founded a lot of companies. In 2007, established the consulting company Springstar. Next year, he founded the real estate investment company Awari Capital GmbH. The core of the Awari business is to buy and hold real estate, essentially in Germany.

    He spread his money and influence in Switzerland too. He was a co-founder of Adinvest II, as a part of Adinvest AG, which is the dominant shareholder of Adyen.

    In 2011, Jung scored with Springstar when the company partnered with Airbnb.

    Jung joined Airbnb full-time and dissolved Springstar in 2012.

    He took the main role in Airbnb’s efforts to develop its business in 72 countries. When this project was done, he moved to Houzz. It was 2014.

    Houzz is an online network for home design and home improvement professionals and Jung developed their international business.

    In the same year, Jung was involved as an investor and consultant,  with SpoonRocket, Artsy, Flightcar, iCracked, and Homejoy.

    Jung, modern German investors, is a partner, at Jung-Miropolski, Investment Manager at Adinvest AG and Chief Executive Officer at Awari Capital GmbH.

    His investments are in Lyft, Adinvest, Airbnb, Artsy, BeyondTheRack, Homejoy, Houzz, Wash.io, Tilt, Ticketfly, and many others.

    Elvir Omerbegovic as one of the Modern German investors

    Modern German Investors 1

    Elvir Omerbegovic is one of the modern German investors too.

    He is an Angel Investor. We add him because his life-story is incredibly interesting. Omerbegovic was born in Germany, in Mettmann, in 1979. But his origin is from Bosnia.

    Actually, Elvir Omerbegovic is a German entrepreneur of Serbian– Bosnian descent. His father is from Bosnia, and mother from Serbia.

    He is a German entrepreneur who is largely known as the founder and CEO of the Hip Hop label Selfmade Records and as President of Rap of Universal Music Germany.

    He played basketball. By the age of 20, he was professional in basketball. At age 16 he also played basketball at a High School in Kentucky, the US for one season.

    When he was 20, he stopped professionally in basketball. Elvir enrolled in college and began studying sociology.

    He merited a bachelor’s degree in Political Science, Media, and Sociology. Later, he received a master’s degree in Political Communication.

    He started building his publishing house from the age of 24. The first repertoires, with which he began to gain success, were Kollegah and Farid Bang.

    Elvir’s milestone was In 1999. He met Philipp Dammann during a community service training in Herdecke, Germany. Dammann alias is Flipstar and he was a member of the Hip Hop group Creutzfeld & Jakob.
    Omerbegovic was interested. He began to perform as a rapper under the name Slick One. Flipstar also gave Omerbegovic opening contacts in the German Hip Hop scene.

    In 2003, Omerbegovic was introduced in the song Game Over for the first time on the Creutzfeld & Jakob album “Zwei Mann gegen den Rest’.

    Over the next two years, he recorded contributions to five releases by Selfmade Records.

    On the track Bruderkrieg, a collaboration with Edo Maajka, Bosnian musician, Omerbegovic appeared as a rapper for the last time.

    He established a music label with Philipp Dammann under the name “Selfmade Records.” Initially, the label was only supposed to work as a platform for Dammann’s publicity as Flipstar.

    But soon he spread his business to the other Hip Hop acts in the region.

    In  2014, Elvir Omerbegovic and Maximilian Scharpenack established the Suckit GmbH. They did it with Marco Knauf and Inga Koster, founders of the company true fruits. Suckit specializes in the production of alcoholic water ice, freeze-pops.

    Soon after sales began by the company’s website in April 2014, Suckit sold almost 30,000 units of its products.
    Today, this merchandise is distributed over numerous supermarkets. According to Suckit, 750,000 units of ice were sold in the first two-year. More than 500,00 just in one year, in 2015.
    Next year they hit the new record, 1.4 million units were sold.

    In April 2005, the sampler Schwarzes Gold was released as the first Selfmade Records production.

    At the end of May 2009, Omerbegovic established the fashion brand Pusher Apparel.

    The new fashion products were combined with the marketing efforts of the album “Jung, brutal, gutaussehend”. Rappers Kollegah and Farid Bang promoted new fashion products.

    Pusher Apparel is part of the network of the Bravado Merchandise GmbH, a sub-company of Universal Music Group.

    The product line fundamentally targets sporty male customers between 13 and 28 years of age.

    The interesting part is that sales are exclusively done via the company’s online shop.

    Many German rappers promote this fashion label. In June 2016, Rappers Gzuz and Bonez MC of the 187 Strassenbande signed a cooperation agreement with Pusher Apparel.

    Later, MoTrip, Marteria, Farid Bang, KC Rebel, Schwesta Ewa, 257ers, Favorite, Joko Winterscheidt, Klaas Heufer-Umlauf, and Micaela Schäfer had shows with the product.

    Why Elvir Omerbegovic is here as one of the modern German investors?

    Because he is a kind of Slumdog Millionaire. He raised in a problematic environment, came from the family with broken roots, but he had the power and strength to fly to the sky.

    Guy Spier is one of the Modern German investors

    Guy Spier

    Guy Spier is a great German value investor and one of the best among modern German investors. He was born in South Africa on February 4, 1966. Spier spent his early years in Iran and Israel. He received a bachelor’s degree from Oxford and an MBA from Harvard. Also, he lived in New York. In 2008 he moved with his family to Zurich.

    Spier is a polyglot thanks to many different countries he lived in.

    His reputation among the value investing community is growing day after day. Spier is well-known for paying $650 000 to have charity lunch with Warren Buffett.

    His 2014 book, “The Education of a Value Investor,” is very popular among investors. It’s one of Amazon’s best-seller.

    Almost three years, from 1988 – 1990, Spier worked at Braxton Associates. Later it became Deloitte Consulting. In 1991, he worked at the European Commission in Brussels.

    Spier started out as a professional money manager in 1997 with $15 million mostly borrowed from family and friends.

    Since then he achieved excellent returns in the S&P 500. In 2011, his profit was 221.6% versus the S&P 500’s 36.7%. That’s an awesome result.

    Spier manages the Aquamarine Fund, an investment partnership inspired by Warren Buffett’s 1950s investment partnerships. He is also a financial commentator in the media, from time to time.

    Aquamarine is fairly restrictive with regards to who it manages money for, and fund information is only distributed by request. Also, the fund inspiration was Buffett’s early investments but Speir is more Benjamin Graham type of investor.

    Meaning Spier prefers traditional deep value investments.

    Just like many other young investors in value investing, Spier’s focus was on Warren Buffett’s investment strategy. It means buying growing companies with powerful moats at fair prices.

    He was really devoted to Buffett’s strategy. He studied every single detail. And he was playing according to that.
    But soo, Spier revealed some errors.

    As Guy Spier explained, Buffett’s strategy has a few major pitfalls.

    “Something I learned during the financial crisis was that when you pay up for a better business, you can suffer greatly when the price people are willing to pay for that business goes down dramatically, as it did in 2008. …I lost more money owning those businesses than I would have if I had owned the right cigar butts…”

    But large declines in price in the periods of bear markets wasn’t the only investment problem that Spier, this modern German investors, detected. He revealed, the GARP strategy also forced investors into doing extreme behavioral errors when investing.

    “If you talk about your stocks, it will affect how you think about them as well as the portfolio decisions you make. At the time, I did not believe it would skew my decision making. But if I go back over the life of Aquamarine Fund and examine my letters to investors, I can see clearly how this created a bias for better businesses, simply because it was more fun to talk about them.”

    This was followed by an admission that he developed a bias for companies that are fun to talk about.

    Say, Buffett was right when calling inflation a ‘corporate tapeworm’.

    So, as a result, we have, emotional prejudices are surely an investor’s tapeworm.

    They make investors overvalue the returns they can expect from specific stock. Also, there can be some misconception about how quick some company will become, or how big profit the business will produce. This trick occurs frequently due to the Halo Effect.

    When investors assume that one single good company’s feature is followed by others, also good.

    The trend to assign or overvalue a spectrum of good features that a company may not truly have.

    For example, you may see the fruit from the South as juicy, sweet, and tastier by virtue of its image. But it may not actually possess any of those attributes.

    The same belief is at play in investing.

    As Guy Spier reveals, you end up paying a large price upfront for a business that is suffering a continual rule of nature.

    And finally, that return on equity will drop. So the company will be far less successful than when you detected it.
    Moreover, the risk-reward correlation may still be in an investor’s benefit, but the company’s margins can face a huge volume of pressure.

    Spier supported firmly Warren Buffett’s principles on Value Investing and capital allocation.

    Today, he also reveals that Value Investing has changed over time.  Well, the reputation and popularity of this style mean that fewer chances are possible to investors. Beliefs that it will work would still be around.
    But the victorious value investor of modern times has to look beyond. Sometimes out-of-the-box.

    And Spier gave that possibility, a critical view on traditional value investing.

    Spier lives in Zurich with his wife and three children.

     

  • One share of stock – is it worth buying

    One share of stock – is it worth buying

    3 min read

    One share of stock – Is there any benefit to buying one? Is it better to have a bunch of shares or not? A dozen? 100? 150? 200? The answer is typically less than the number of fingers on the hand. A ruling principle of stock investing is to spread your portfolio throughout several companies.
    But, what if you don’t? What if something bad happens to your single investment? You will have practically no way to cushion the disaster. The misconception in managing a portfolio is that should contain numerous stocks.

    Why is this opinion a mistake?

    Yes, your exposure to risk in individual stocks is smaller. But, at the same time, you are also reducing the chance to make large profits in the big winners. There is a simple reason behind this: You won’t have enough shares to enjoy the gains. But there is a disadvantage of an over-diversified portfolio is that it takes a lot of commitment to watch over many companies, follow their rise, reports, and other progress.

    If you have a smaller number of shares, it’s easier to follow the companies you own.

    Yes, truth is, investing all of your money in the stock of only one company is very risky. You can suddenly lose most of your money. But it also has the potential for huge returns. There are numberless stories about investors getting into a company that went onto great things.

    For example, if someone was able to buy Apple in its early days, such has made a lot of money nowadays. Moreover, one share of stock was good enough. 

    But, there are a lot of risks here.

    Very often, those stories don’t include the fact that the investor made a lot of investments that failed before the big success happened. If you make 25 investments and they’re all average and suddenly make one that earns a big return, your overall return is not that big. The stocks can sometimes increase value, but companies can often totally fail. In that case, their stock is worthless.

    In fact, entire business areas can become insignificant over time. Some companies were probably good investments several decades ago.

    For example, producers of VHS cassettes or floppy disks. What we want to say is, you can invest in a big company to reduce the risk of losing, but that also drastically reduces the chance of big success, too. Some companies can be as steady as a rock, but still, it’s not likely to quickly double your money, either.

    Is buying one share of stock worth It?

    It is not about how many shares of a stock you buy or sell in one transaction.

    Stock brokerage firms usually charge the same commission. For smaller transactions, the fees represent a higher percentage of what you’re paying for the stock itself.

    One share of stock - is it worth buying
    Buying under 100 shares can still be worthwhile if you think you’re going to make sufficient money on the investment to cover the fees. To decide for yourself if a small trade is worth it, you’ll want to look at your brokerage’s commission and the actual stock price.
    Buying 50 shares of Berkshire Hathaway could cost $15 million since one class of stock in the company has traded above $300,000 a share, for example. But, other companies’ stock trades for as little as a penny, so buying 50 shares would cost you 50 cents. A commission of $5 dollars on a 50-cent purchase has a much different effect on the total cost than a $5 commission on a $15 million purchase. Don’t you think? It is important to evaluate whether or not the commission fees charged to you will still make the investment profitable.

    One share of stock – Fewer is better

    For a beginner portfolio of about $3,000, just two stocks are enough. But for a portfolio of $5,000 to $20,000, three stocks can be an easy load. Hence, for portfolios up to $200,000, four or five stocks are enough. Also, those who have more than a million dollars to invest should restrict themselves to six or seven stocks. To have success with some of the stocks, you have to make the right selection. This doesn’t mean you have to make excellent choices.

    All you need is a careful process of selecting companies with superior profit and sales growth.  Deduct the stocks lacking good chart profiles, and you end up with a shorter list of potential investments.

    How to evaluate

    Watch at the current share price, calculate the price at which you would sell that stock, and determine the difference. Now, calculate that price by the number of shares you plan to trade to see how much your profit would be. It is without commissions. Then, deduct the commissions you’d pay to both buy and sell the stock. And you will find if the transactions seem worth it.

    One share of stock - is it worth buying 1
    Remember, you have to consider the risk involved. The stock might not play as well as you suppose.

    Lower share price means less expensive

    That’s where most people start. But it is wrong. The price per share of any company you want to buy should be almost trivial to you. You should think in terms of your overall money invested. That’s how you should allocate. Don’t even think of what a stock’s price is, or how many shares you get.

    You have to be sure that you are buying solid companies that you feel it is good for you. Your portfolio should reflect your idea of the company’s future. The share price is meaningless. For example, Google is $700 per share, Apple is $100 per share, that doesn’t say anything about either company or whether or not one is a better investment over the other.

    Why the price of a share doesn’t matter?

    You should not make an investment decision based on the price of a share. Look at the books to decide if the company is worth owning, then decide if it’s worth owning at its current price. The price of the stock is made by how many shares were issued and how much people think the company is worth and will be worth it. The first factor can change in a stock split and without the others changing.

    What you really need to look at is what you think the future of that company looks like. But as most important, what that might do to the stock price and to the dividends it pays to stock owners.
    One share of stock - is it worth buying 2

    One share of stock can be good

    Honestly, there is no difference between more shares of a cheaper stock and fewer shares of more expensive stock. When you invest in a stock, the increase in the share price results in gains. This is a major concept of investing.
    Trading real money can be difficult without a sharp understanding of the principles involved. Investing your money without good knowledge will be stressful. It could have a discouraging effect if it doesn’t go properly.

    The bottom line

    There is no minimum order limit on the purchase of a publicly-traded company’s stock. It’s prudent to buy portions of stock with a minimum value of $500 to $1,000. As you already know, there are commissions on the trade. Whether you own 10 shares at $200 or 200 shares at $10, you still own $2,000 of a company. If that company’s market value grows by 10%, you earn $200 in any case.
    It is easy to find online discount brokers that allow you to buy fractions of shares of higher-priced stocks. So, if you don’t have enough to buy a full share it shouldn’t stop you. Also, if a company you want to own but you don’t have enough saved to buy a share, keep saving. Simple as that. It doesn’t matter if you buy now or a few months from now.

    You might find these interesting too:

    >>>  The best stocks to invest during the inflation

    >>> Trading With Signals – Full Guide on How To Trade with Signals

    >>> Day Trading the Best Methods – Day Trading for Beginners

    >>> Trading Options – Understand the World of Options

    >>> How to invest in a mutual fund

  • Investors are focused on Brexit

    Investors are focused on Brexit

    2 min read

    Investors are focused on Brexit
    Investors are focused on Brexit. The House of Commons of the UK should again start voting for the Brexit agreement, presented by Prime Minister, Theresa May. During the first vote, the Parliament rejected the Prime Minister’s deal. If the revote again fails, the events may develop in two scenarios: the UK will leave the EU without an agreement, or the Brexit date will be rescheduled.

    But let see the risk of Brexit and the potential impact on the UK economy.  

    We also consider the likely reaction by markets for sterling, equities, and bonds.

    We just want to inform investors.

    The EU is the UK’s biggest trading partner.

    But, the UK is also a very important export address for the EU. Brexit may bring the UK the freedom to arrange trade agreements with third parties. But it may have to lose access to parts of the single market, and would almost surely be outside the customs union.

    Foreign direct investment is really important for financing the UK.

    The UK has a strong connection to Europe and vice versa. If Brexit causes the UK to lose access to the single market, it could cause capital inflows to reverse. The existing stock of assets and liabilities is very large. Say that, this has a huge impact on markets in a confusing plot.

    EU membership is frequently indicted the UK’s perceived migration problem

    Truth is that most immigrants come from non-EU countries. From an economic viewpoint, EU migrants arrive ready to work, pay taxes, and ease the difficulties of an aging population. Limiting migration in a Brexit scenario would almost certainly lower the UK’s trend growth, and increase the burden on the exchequer.

    The UK’s contribution to the EU’s budget is not a significant

    When the UK decides to leave the EU, finally, with just 0.2% ( December 2018) of gross national income, that saving wouldn’t solve a dent in the UK’s fiscal black hole. Moreover, if the UK chooses to follow the path of Norway or Switzerland, some costs may also be required.

    UK labor market will be less flexible

    Restrictions on EU migration may cause the UK labor market to become less flexible to demand. With raising the likelihood of more pronounced wage, inflation and interest rate cycles. A more cyclical economy would not only make recessions more frequent, but international investors could demand a discount on UK assets given the higher volatility of expected returns.

    A Brexit scenario is likely to cause sterling to fall further.

    We are all witnesses to that.

    Having already seen its first-class depreciation since the financial crisis in recent months, we can say that a further fall is likely under Brexit. But, the sterling could rebound should the UK vote to remain, as many investors have already started to hedge their sterling exposure.

    The outlook for UK equities is mixed under Brexit.

    The UK’s large-cap index has a large proportion of its revenues coming from outside both the UK and EU. If sterling depreciates, these companies may see the sterling value of profits rise. So, they would therefore benefit.

    The mid and small-cap indices have more exposure to the UK and EU and could underperform as a result.

    The outlook for bonds is mixed under Brexit.

    Credits could have wider spreads. The investors demand a higher premium against the risk of lower growth and higher default risk. Meanwhile, gilts (Gilt-edged securities are bonds issued by the UK Government)are likely to see higher domestic demand from safe-haven flows.

    The latest news: Ryanair UK investors to lose rights in no-deal Brexit

    According to the Guardian, British citizens who own shares in Ryanair will be barred from buying more stock, voting on company resolutions or attending annual shareholder meetings if a no-deal Brexit goes ahead, the Dublin-based carrier said on Monday.

    EU regulations require that airlines flying under a European license must be majority-owned and controlled by shareholders from the trading block.

    Ryanair said that to comply with these regulations it would have to restrict the rights of British shareholders, who control about 20% of the company’s stock, to bring them into line with other non-EU investors.

    In a statement to the stock market, Ryanair said: “These resolutions will remain in place until the board determines that the ownership and control of the company is no longer such that there is any risk to the airline licenses held by the company’s subsidiaries.”

    Ryanair has previously published a guide to the ramifications of a hard Brexit for its UK shareholders, explaining its rationale for the decision and claiming it has no alternative.

    Don’t waste your time.

    risk disclosure

  • Investing In The Forex Market

    Investing In The Forex Market

    Investing In The Forex MarketHow to Forex investing? It isn’t a get-rich-quick scheme but it is full of potential to become wealthy

    By Guy Avtalyon

    Investing in the Forex market is growing and people from all around the world, especially from, India, are choosing to invest in Foreign Exchange markets, after the regulation of brokers’ work and their massive presence on the market.

    In this regard, investing in the Forex market can be a good alternative for all those who want to make a high return on invested money.

    Nevertheless, regardless of the many advantages of Forex, many investors are quite skeptical when it comes to investing large amounts of money. The reason lies in numerous myths, rumors, and misinformation that can often be found on the Internet, and they are referring to the Forex market.

    In the shortest, it can often be heard or read that the Forex market is a dead end, an ideal place for losing money, a fata morgana in the desert, and so on.

    For this reason, investors instead of developing the right trading strategies, are often subject to rumors. Hence, they do not make the right decisions or completely abandon or omit to invest in the Forex market.

    On the other hand, there are completely different myths.

    There are people who believe or have heard the myth that they can get rich overnight without one day of financial education. So they believe that Forex is the right place for that.

    What is investing in the Forex market?

    Someone would say, instant win with minimal or almost no investment. But this couldn’t be more wrong. It is true that behind any desire for quick rich is the lack of experience, the uncertainty, and the lack of a properly defined strategy. Success on the Forex market comes slowly, step by step, through education, practice, and only if it is based on realistic expectations.

    Often another myth can be heard. The is investing in stock markets is nothing more than a pure game of happiness. This is certainly far from the truth and such myths are the result of a lack of financial education. Forex is not gambling. Anyone who has read something about the Forex market, if they really wanted, could easily understand the mechanisms of price formation on the market.

    Here’s one myth more about investing in the Forex market. Money can be earned on Forex, but that means a lot of nights without sleep with a computer in front. And many hours of night trading on a trading platform.

    That’s another untruth about investing in the Forex.

    Any standardized financial education or course in this area will teach you to invest in a minimum amount of time. Practically, from the computer, you will only read the latest news. Making a strategy and making decisions is not something that is done every hour. It has a longer-term character. Not to mention mid-term and long-term investments, where you can almost neglect any day-to-day operations.

    In the case of unforeseen news, whether good or bad, you certainly can make a change in the investment portfolio. But this is not something that happens every hour or every day.

    Is Forex worth investing in?

    Discipline is the basis of every success and it comes in combination with solid knowledge. It comes with a great role in patience and significant experience.

    Successful investing in the Forex market is only a consequence of well-planned and executed trading operations.

    That involves taking into account all important economic events, permanent informing, and essential understanding of price graphs.

    Finally, for all those who do not have adequate education in this field and recognize Forex as a good place to invest, the first thing they need to do is find the right provider of financial education. They have to choose mentors and plan personal development goals. The mentor is one who will propose to you the appropriate type of training, course, etc. And that one will be your guide through the first practical operations.

    The Forex market is a very complex mechanism. The undeniable fact is that it generates various controversies.

    However, the main cause of these controversies is ignorance. If you want to take advantage of the opportunities for earning in this field, you must break all the prejudices, myths, and misconceptions surrounding it.

    If you are dealing with a trader’s job, you will probably be interested in the so-called “Robo-forex” ie robotic/automated business on the forex market.

    How to Forex investing?

    In other words, can you actively trade without moving a small finger?
    It’s possible but you’ll have to do something. You’re the one who has to give instruction, you’ll have to specify inputs. Then, how is it automated, you may ask?
    It’s about a program called “The Forex Expert Advisor” (Forex Expert Advisor) and can be used within the Trading Platform.
    This program works independently, although based on the instructions you specify. But it does not require your direct participation in the execution of trade orders or any other market activity.

    So, robo-forex executes all tasks independently, meaning automatic.

    All you have to do is set the target through an online trading platform that is linked to a broker server. Then the Forex Expert Advisor will start trading according to the given instructions. It is important to note that forex market experts are necessary as advisors especially if you’re a beginner. In this way, you don’t have any responsibility for decision making and, practically, you’ll trade without stress.

    What’s more, in that case, you don’t have to be an expert or have a deep knowledge of technical and fundamental analysis. These jobs are contained in the Forex Expert Advisor Add-on – Trading Program.

    So, this means that you can practically be away from the computer because your “advisor” will monitor and process all trade signals in case of your absence.
    So, it’s possible to invest in Forex and trade this market with a little effort and engagement.

    Forex as investment

    You have often had the opportunity to hear that investing is not a sprint but a marathon.

    This means that if you want to succeed in a tough business such as trade in financial markets, you will have to, among other things, spend a lot of time on it.

    To run in the long run, you do not need the 500-euro sneakers. You can run in the old one. The point is that you can start investing in Forex even with a little money but you’ll have to do so in a way that is suitable for you.

    The price is not the most important issue when you investing in the Forex market. The most important is to feel comfortable as much as you can. Because it increases the chances that your race will end successfully. So, take advantage of this growing market. And stay tuned, follow Traders-Paradise. You’ll find plenty of valuable suggestions and examples from real investing and trading.

  • Artificial intelligence and machine learning we can apply on the financial markets

    Artificial intelligence and machine learning we can apply on the financial markets

    What is artificial intelligence and machine learning and can we apply it on the financial markets?How can we apply artificial intelligence to the financial markets

    By Guy Avtalyon

    What is artificial intelligence and machine learning and can we apply it to the financial markets?
    It took us 3 and a half years of research and development until we finally reached a point we can trust our software.

    Obviously you can find all sort of information on the internet about machine learning and AI, like these articles on Wikipedia for example, but the concept is quite simple: You run an algorithm (there are many) on the set of data, and once the algorithm is finished, the software will know how to run by itself on new sets of data, even if it’s never been seen.

    There are 2 types of algorithm methods –

    1.       Supervised – Similar to training a dog: if it does good you pet them, if it does wrong you scold at them. After a while, they will learn how to behave
    2.       Unsupervised – This is the most interesting algorithm out there. This means you give the algorithm a set of data but you DO NOT tell it what is wrong and what is good. It does it by itself.

    So, can you apply those algorithms in the financial markets?

    First, let’s start by learning a bit about how ML (Machine Learning) and AI (Artificial Intelligence) work and its purposes.

    To create simple computer software, we need to insert some scenarios we want it to handle, we add the way we’d like the software to act, and let it run.

    A “stupid” software will ONLY KNOW HOW TO WORK according to the scenarios we entered and taught it.

    An AI software will take the same scenarios we entered and ways to behave we told it to, and will be able to do it NOT only on the ones we told it to but also on SIMILAR scenarios.

    This is basically why AI and ML are the future in any way you can imagine – Because it’s not limited to what the programmer writes in the code, but also it can adjust and act to things that aren’t inside its code and also, over time, will be smarter in handling situations only by itself.

    OK let’s go back a bit

    Scenarios? Ways to behave? WHAT??

    Say we got a lifetime doctor’s records of some people. They are anonymous, of course, because we don’t care who they are. We only care about their DATA.

    Now we want to find something, like, maybe, can we find cancer disease BEFORE the person knows it’s happening – or in other words – Can we predict cancer?

    We can check – are they the cigarette smokers? If yes, how many had cancer?

    This has been the way until now.

    You probably can already guess why it’s not merely enough.

    If they don’t smoke – does that mean they won’t have cancer? We already know it’s not true.

    And sadly there’s a variety of cancers to almost every organ in the human body (cancer is when some cells of our own body stop dying unlike the other cells and the body starts to attack them. Basically, nature makes our body suicide from inside).
    So what can we do if we want to predict cancer?

    It’s simple – We take into consideration as many parameters we can. Like:

    Age, gender, place of living, place of working, family history, doctors’ appointments, and medical record, food and drink habits, etc.

    Those are the objective data.

    We need also subjective data such as happiness in life, the scale of pressure, type of person, etc.

    Once we have ALL this data for every person, we need to do 3 things:

    1.       Check which one of the parameters can, in fact, be some kind of prediction to cancer
    2.       Run a statistics machine learning algorithm (like Naïve Base)
    3.       Use the results to solve a worldwide problem  

    We wish, right?

    Now we get on to the problems of artificial intelligence (AI) and ML:

    1.  Data

    Data is extremely difficult to collect, and then to manipulate. In our example to get these data, we need to cooperate with medical services to get their clients’ data, create a questioner, and send it to all the clients and analyze the data. Though there is such cooperation around the world, it’s still not easy to also get subjective data.

    1. Analyzing big data

    Big data has become a known word around the world.

    There was a time companies said they work with big data and clients threw the money at them.

    But it’s not that simple. Every data you add for the algorithm to learn from – increases exponentially the time for the software to analyze…

     

    Inefficient software may take a very LONG period of time to run.

    Funny personal anecdote, our first AI software we developed to learn how to predict price changes in the stock market looked so genius at first, but after we started running that artificial intelligence and measuring the time it will take to finish, we saw it will take no less than 27,000,000,000,000,000 years from now(!!) Obviously, we couldn’t wait, and in future articles, I will explain how we lowered it to only a few hours running time.

    Let me give you an example of the difference between Big Data and just simple data with a game:

    I chose a number between 1-1000. You have to guess which one is it. But there’s a catch – you need to find the number in as little time possible. How would you do it?

    Think about it for a second.

    Got a solution?

    If you guessed that you should ask me “Is it higher than 500?” and then according to my answer (If I chose the number “990”), the answer is yes. Then your next question will be “Is it higher than 750″… You get the point.

     

    That’s easy, right?

    What if you got a number with 80 digits? Then it might take a long long time until we break this number, maybe even months. And that’s only one running time. What if we need it to create strategies for trading and investing and we need it to go over millions of possible strategies?

    It will take a lot of time.

    As humans, we can’t really comprehend really big (or small) numbers. Like these two questions, I like to ask people once I talk about large numbers.

    1.       If 1 million seconds is 12 days, how much time is 1 billion seconds?
    2.       And, if your salary is $100,000 each month, how long will it take until you reach 1 billion dollars (say you can save all of it each month)?

    You can easily calculate it, but it’s an intuition question, not a math one. Think for yourself, what’s your intuition answers are? The answers will be later on in this article.

    So we’ve talked about what’s machine learning algorithm and a bit on big data problems.

    Now, can we apply artificial intelligence to the financial markets?

    In short, yes.

    But it’s easier said than done.

    It took us 3 and a half years of research and development until we finally reached a point we can trust our software.

    Because other than the ML and big data problems, we face a whole different problem in the field of financial markets, since they act like in a chaotic environment it makes predicting a lot harder.

    And, (and it’s the most important and) because of the spread whenever you enter a position you face an average of 56% against you.

    That’s probably the time to say there are two kinds of players in the financial markets:

    1.       Investors – They invest their money for years ahead and they gain the average rate the market makes (around 8% a year). By the way, according to decades of studies, there’s one stock that if you’re an investor you should put all your money on, and that’s the S&P500 stock (Symbol SPY). In another post, I’ll prove this fact.
    2.       Traders – They usually use time limit (options) or profit/loss lines (if it reaches +X get out with a profit and if it reaches -Y get out in a loss)

    We are on the traders’ side.

    We want to gain more money, faster, and more chances of getting out in time.

    But unlike investors who buy now and then forget about it, as traders we must beat not only the commissions our broker offers us but also the spread (the difference between the lowest price a seller is willing to sell and the highest price a buyer is willing to buy). The spread is usually set by the broker and it’s one of the best ways for a broker to gain profits.

    So, we also know that like in gambling the house always wins, so as in the financial markets – the broker’s always gaining profits.

    Back to our financial algorithm – we found a broker service that lets us collect the financial data, and we’re saving it. Now, we need to analyze it to find patterns. But how?

    In an everyday changing environment, how can we rely on anything? 

    We solved that problem by relying on our algorithm on behavior analysis. We figure that even though the market can change, the forces that control it (the investors and traders) will stay the same (Obviously, they change too, but way slower).

    So we’re talking about collecting on average millions of data and parameters a day for each stock. Once we try to collect 1000 stocks for a few years time you can imagine how much data is inside, so it’s just a matter of creating a super-fast unsupervised machine learning algorithm with only one rule: The most money you can make is the better – and let it run and find the best way to trade by itself.

    Creating artificial intelligence

    In conclusion, it is possible to create an automatic software or some artificial intelligence to trade for you in the financial markets, but it’s EXTREMELY difficult. You need to overcome many problems in serval fields in order to do it. And after you do it, it’s unlikely that you will let anyone use it.

    But we’re different. We will let our subscribers use our algorithm for free, just to have a sense of how it works.

    Subscribe now to get more information about artificial intelligence in the financial markets and to get informed once our algorithm is ready for outside users.

    Our software will let you choose which assets you want to buy, and when – and it will tell you when to get out. Simple, yet important.

    By the way, the answers to the question before are:

    1.       One billion seconds are 32 years
    2.       It will take 830 years to gain one billion dollars if your salary is 100K per month

    Was that your intuition?

    Sign up below to our newsletter for a free test drive on our trading algorithm! Find more about artificial intelligence.

    Top Image Credit: Photo : iStock/MF3d

  • Who are the most successful investors in India?

    Who are the most successful investors in India?

    2 min read

    Who are the most successful investors in India? 1

    All those who enter the stock market in India has the same dreams. They all want to become absurdly wealthy like few of the known richest investors in the world. These guys made a success! It is never easy to make money by investing or trading in stock markets. The stock markets are highly volatile and your investments can be at high risks. Many people have lost all their savings in this market. Yes, the rules are the same for all, but the story is not the same for all. Many have gathered good wealth. In India too. We found some beautiful stories about successful investors in Indian stock market.

    We want to introduce some of the most successful investors in India. How was their journey, what principles they follow, how long they have been investing?  Who knows, maybe these examples could be an inspiration to all of us. For you too!

    Rakesh Jhunjhunwala – Stock market investor

    Who are the most successful investors in India?

    He is one of the most successful investors in India. His portfolio is worth over Rs. 20,000 crores / 3.2 billion dollars. His top holding is CRILIS but he holds stocks of Titan and Lupin too. He is known as Indian Warren Buffet.

    Rakesh Jhunjhunwala entered the Indian market in 1985. His father was interested in the stock market and boy-Rakesh was very carefully listener during the long conversations among his father and his friends. He attended the Chartered Accountancy course to gain a professional degree and completed in 1985.

    After that, he joined the Stock Market and started trading. His first biggest bet was 5000 shares of Tata Tea which he got for Rs 43 and sold for Rs143 in just 3 months. This gave him Rs. 5 Lakh which was a big deal at that time. His next big hit was Sesa Goa. He bought 4 lakh shares and gathered huge profits on it. After that first successes, a lot of stocks made large sums of money for him like Lupin, Crisil, etc.

    Porinju Veliyath – CEO of Equity Intelligence

    Who are the most successful investors in India?

    He is one of the most well-known investors and fund manager. Equity Intelligence stock picks like Emkay Global Financial Services and BCL Industries has raised by 200% in their share prices and IZMO and Vista Pharma raised by 100% at their share prices under his hand. But it wasn’t so easy in the beginning.

    The story of his life isn’t exactly ‘Slumdog Millionaire’ but he had a lot of struggles in his early days. Porinju Veliyath was born in the lower-middle-class family in Kochi. During his student days, he had to work many different and hard jobs to support his family.

    When he moved to Mumbai in 1990 in search of a job, he became a floor trader at Kotak Securities there. He was clever, learned quickly and he became an expert trader. He worked for 4 years there and got a lot of knowledge. In 1994, he joined Parag Parikh Securities as a Research Analyst and fund manager. In 1999, he returned to his hometown Kochi and decided to make money on his own from the stock market. He made his first major investment in ‘Geojit Financial Services’. The stock was trading at a very low value at that time. Proving everybody wrong, this investment gave him multiple returns. In 2002, he started his own portfolio management service firm in the name of ‘Equity Intelligence’.

    Vijay Kedia – a successful investor with the origin

    He describes success on the stock market: ‘knowledge to find out quality stocks which one can acquire only by reading. If one doesn’t have reading habits, he can’t be a good investor.’

    Vijay Kedia was born in the family of stock-brokers. He started his career in the stock market in 1978 not by his own choice but by force after his father died.

    He joined the family business of trading and stock-broking.  At the start, he was not doing well. But, he did not lose hope. He realized that trading didn’t suit him well and decided to start with investing. But learned a lot about the fundamentals of companies. In the beginning, he owned Rs 35,000 and by his own study, he invested the entire amount in a stock named Punjab Tractor. In 3 years, the stock multiplied 6 times and his Rs 35,000 grew into Rs. 2.1 Lakhs. Then, he invested in ACC at the rate of Rs. 300. After a year, the stock multiplied 10 times and moved to Rs. 3,000 in the second year. He continued to make successful investments in various stocks to create a wealth of 500 crores.

    Vijay Kedia is betting now on Everest Industries and Vaibhav Global as multi-bagger stocks for 2018. And still is one of the most successful investors in India.

    Nemish Shah – top 10 retail investor

    His net worth is Rs 1,300 crore.

    Nemish Shah is the co-founder of  ENAM, one of the most reputed and respectable investment houses. He keeps himself away from media and publicity.  His investment ideas are most sought after. He invested in Asahi India and multiplied his funds to 3.4 times in 3 years. He does not invest in too many stocks. His focus is on limited stocks and highly sector-driven.

    Ramesh Damani – well-known investor

    Ramesh Dhamani is well-known as Warren Buffet follower as much as because of his investments in listed and unlisted companies. He is picking high-quality stocks and retaining them for a long time. He follows the model for investing that favors companies with strong management credentials and processes. And it is Warren Buffet’s model. That affords him millions of rupee. Also, one of the most successful investors in India.

    Raamdeo Agrawal – Founder of Motilal Oswal Group

    Raamdeo Agrawal is one of the founder members of Motilal Oswal Group and MD and co-founder of Motilal Oswal Financial Services. He started buying stocks in 1980 and till 1994; he made a portfolio of about Rs. 10 crores. Then, he read Warren Buffet’s tips and worked upon his portfolio to pick quality stocks instead of accumulating bad sticks. In a span of one year time, his portfolio doubled. He has amassed a net worth of over Rs. 6,500 Crore /1 Bn dollars.

    Dolly Khanna – the Value investor

    Who are the most successful investors in India?

    Women in the top 7 the most successful investors in India. Value investor Dolly Khanna has been investing in the Indian stock market since 1996. Her portfolio is managed by her husband Rajiv Khanna. She made debut through the fertilizer sector by homing in on a top-quality small-cap stock which enjoys a monopoly position. She has a knack of spotting multi-bagger stocks and knows exactly when to book profits. Emkay Global Financials, PPAP Automotives, IFB Industries, Thirumalai Chemicals are some of the picks form her portfolio.

    Bottom line:

    If you want to become successful in the stock market, then you should learn from the lives of these iconic stock market investors. How was their journey, what principles they follow, how long they have been investing?

    Everyone who enters the stock market world knows about Warren Buffet. The greatest investor of all time and one of the richest person in this world who made his fortune by investing in stocks. But you have to know these guys and their life path.

    Both you and they deserve this to know.

    Risk Disclosure (read carefully!)

  • Asian shares a sea of red on trade, emerging market anxieties

    Asian shares a sea of red on trade, emerging market anxieties

    Asian shares a sea of red on trade, emerging market anxieties 1
    Asian shares a sea of red on trade, emerging market anxieties  (Reuster)

    According to Reuters, Asian shares fell for a sixth straight session on Thursday as oil skidded and safe-haven gold gained, with investor confidence shaken by turmoil in emerging markets and jitters over a potentially severe escalation in the U.S.-China trade war. MSCI’s broadest index of Asia-Pacific shares outside Japan.MIAPJ0000PUS fell 0.4 percent to hit its lowest since mid-August. Japan’s Nikkei .N225 slipped 0.2 percent while Australian and New Zealand indices.NZ50 fell more than 1 percent each.

    China’s blue-chip index.CSI300 slipped 0.2 percent while Hong Kong’s Hang Seng index.HSI dipped 0.5 percent. Read the full article about Asian shares here…

    Introducing the Australian Stock Market

     

  • The Barriers to Learning About Stocks and how to avoid them

    The Barriers to Learning About Stocks and how to avoid them

    The Barriers to Learning About Stocks and how to avoid them
    Be objective, don’t expect the success overnight, have reasonable expectations, think in all probabilities.

    By Guy Avtalyon

    First of all, never base your decisions on emotions, rumors, or rush to the next hot opportunity.  This is one of the most influential barriers to learning about stocks.

    You will end up losing money as a result. Some investors despite their problems, continue with the same actions and keep getting the same bad results.
    Investors have to remove barriers on their path to success. Otherwise, success will never come. All investors must seek to continuously remove new barriers as they appear.

    What kind of barriers to learning about stocks you may have?

    Emotions

    The fear and greed! Many investors experienced the obscure of ability to rationally consider through an investing opportunity. This leads to poor investment decisions and a loss of money.

    For instance, it is in an investor’s best interest to sell high and buy low, investors hate to sell winners and are unwilling to buy out-of-favor stocks. Why so many investors hold winning investments too long? When they fall back, they continue to hold on to them, hoping they will return to their previous highs. They even lie that they will sell if the price returns to the level at which they bought it.

    Also, there are investors who hold on to losing investments! Okay, they might be in love but why to hold for so long? They have some hope. If they wait and hold longer, their shares will recover. That might happen never.

    They can sell to at least break even, very often such investors become losers. Because their capital is tied up in a losing investment and is unable to produce a return. This reduces account balances and expands stress levels.

    Most investors admit that holding investments too long is the mistake that was most detrimental to their success.

    Less knowledge

    Some investors think if you just buy and sell the right stock, you will always make money.

    That’s wrong! Totally mistake! Barriers to learning about stocks!

    Sometimes, investors can have less understanding of how markets work. That drives stock prices and successful investing performance.

    Also, so many investors tend to overestimate their strength to beat the market. As a result, they take on unnecessary risks. People are often drawn to powerful performance, even when it’s not sustainable.

    Many investors follow the hottest sector and don’t have a sufficient understanding of the risks involved.

    For instance, investors realize they should not overweight their portfolios with too much money in one investment,  but they continue to do so. It isn’t rare that people buy too much stock in the company where they are employed, because the company’s available retirement funds and use of options as a part of their compensation package makes this easy.

    Barriers to learning about stocks may leave investors with a portfolio that lacks diversification.

    Some other investors don’t understand how bonds work, and they avoid them. Few of them realize that bonds hold a preferred position should a company declare bankruptcy.

    Many others don’t realize that when interest rates rise, bond prices go down. When it comes to understanding important concepts such as how a central bank sets interest rates and the yield curve, even fewer investors have sufficient knowledge to make rational decisions.

    And more interesting, most investors do not know when to sell a stock that has substantially appreciated. They continue to hold the stock instead of selling part of their position.

    In that way, they could capture some of the profit and make capital convenient and available for other investments. They can’t realize that as the price of the stock goes up their portfolio becomes even more unbalanced.

    The market has the ability to balance portfolios for investors, sometimes to their astonishment. Many investors are confused by the idea that rebalancing entails selling some of the investments that have performed best and buying more quality stocks that have lagged.

    Losing the Bigger Picture

    Despite many investors like to say they invest with a long-term perspective, they continue to make decisions based on short-term movements and ideas. Most investors believe that setting long-term goals for such things as buying a home or providing for retirement are important. But still, they fail to establish viable financial plans to do so.

    Without these plans, their decisions are decaying. Basing decisions on unpredictable market fluctuations can be very dangerous because there is a good chance that these investors will make the wrong decision. That can obstruct their ability to achieve their long-term goals.

    When the investors realize that the market has risen, they pour cash into stocks and mutual funds, trying to grab part of the profit the professionals have realized. When the market puts in a decline, some investors panic and sell close the bottom. And very often, this pattern continues, causing such investors to lose much of their capital.

    How to remove barriers to learning about stocks

    No matter what your barriers are, it is important to put together and plan to remove them. Here are some steps you can take to eliminate these barriers to your investing success. Experts advise doing this.

    * Learn to monitor your performance: Measuring your performance creates a record of what has worked and what has not. This can help you to recognize problems that you repeat. You should record the overall market trend, the sector trend, the reason for making the trade, the exit target, and the trailing stop. Do this for each trade no matter if you sell or buy. This record is very useful in evaluating your investing activities and can be used to identify what barriers you are meeting that obstruct your success.

    * After you have measured your actions, you can identify what you have to change: Inspect your past tradings and find patterns that show to barriers to success. Maybe you impulsively buy the next stock without thinking? Does your explanation prove to be wrong most of the time? The key is to identify the investing behavior that inhibits your performance.

    Stay focused and avoid barriers

    * Stay focused on what you need to change. Like any effort to change behavior, you must remain focused on the actions you take to reinforce the investing behavior you wish to have. If you think you are not focused on how to change your behavior, then take a break from your investing until you recover your focus.

    * Determine how you will understand your losses. Keep in mind that losses are part of investing. Learning how to deal with them is one of the most important pieces of successful investing behavior. You have to define what your loss looks like through your stop loss and reasons for the trade. You must accept the loss as part of the trading. Accepting a loss is a trading skill that is a crucial behavior. Making a losing trade ahs to be an acceptable process in your trading strategy, you’ll eliminate the emotion and fear that comes from a loss. You’ll jump to the next opportunity without fear.

    * Become an expert at one investing strategy: There are many ways to evaluate the market and select stocks that offer good investment opportunities. Don’t try to understand every perspective on a stock. It is best to get to know one reliable investing strategy. In that way, you will gain confidence in your investing access. This knowledge will form a valid base for your investing. And when you become an expert you can expand your knowledge base by adding a new approach.

    Think twice to avoid barriers 

    * Think in probabilities: The market is in permanent movement. It forces the investor to continually evaluate the risk-reward ratio of each opportunity. You can’t move the market, that’s why you need to rate what is the greatest possibility that will move the market, key sectors and the stocks you are watching. Evaluating what is most possible to happen in the sense of probabilities could help you to make a valid investing estimation.

    * Learn how to be objective: Many investors want to believe that the market will do what they think it should do, rather than what it actually does. Any limits you place on the market will usually turn out to be wrong. The market does what the market does. Investors are best served if they maintain an objective perspective. If you are neutral, then you will not feel any pressure to move quickly. You will not be afraid to make an investment decision. And the most important, you will not force your opinion on the market, but rather sense what the market is trying to tell you.

    Do not expect this to happen overnight. Removing the barrier is a long-term process. But if you have a defined plan, you will be able to create a program to remove the barriers that keep you from achieving success as an investor.