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Motivations of Legit Gurus

Discussion in 'Trading/Investing Resources' started by StockyGuy, Mar 31, 2019.

  1. StockyGuy

    StockyGuy Observe, Discuss, Apply

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    Assuming you find a legit signal provider/trainer, why do they bother?

    1. Altruism? No, one person's gains are another person's losses in this game.

    2. Legally front-running the crowd? Signal followers don't necessarily lose here. I gather for this to be meaningful it requires a massive number of people taking that advice.

    3. "Da money?" I feel anyone offering useful signals and advice does not need to rely on membership fees - even in drawdown periods.

    4. The concept that teaching others makes one a master. Always being accountable to those who pay for your advice may make you more rigorous in your research and trading execution.

    5. The ego gratification of being a hero to your followers? I don't mean it as a bad thing.

    6. Being famous (or at least well known)?

    7. The capacity to be a boss of a small business with employees, rather than a loner scrunching his/her eyes at a screen(s) in a dark room.

    I'd guess it varies between providers, but I'd say it's usually mainly 4 and 5. With the fakes it's basically 3 and 6.

    When a trader's charts and stats look good, it's hard for me to get my head around why anyone with anything worth saying would want to say it to the great unwashed.
     
  2. Garpal Gumnut

    Garpal Gumnut

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    Define a "Legit Guru"

    gg
     
  3. kahuna1

    kahuna1

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    Some do it for free !!

    And even then, one cannot lead a horse to water. Trading and investing is very personal venture, depends on your goals and risk appetite and eventual goals. Either way, having debunked a few claimants over the past 35 years, secret systems and so on, find someone who is NOT trying to sell you something and copy them or aspects that make sense.THIS IS FREE ... or little cost.

    As someone who uses fundamentals first then charts and then bigger macro picture, I am of the view, using a chart alone is a recipe for eventual disaster. Following what someone has written about some great investor, say Buffet who has paid no tax ever .... will not work for many, if any. Only thing that he copies is valuation and its even for him something that has not worked too well for the last 20 years. Buying shares in the 1960-1990 period, there was much lower prices v actual value. Here with zero rates, tax theft a policy of USA based companies and non reporting of correct accounts more the norm, the only protection one has, is diversification, which Buffet actually preaches against since he can buy the whole company verses being often a tiny minority shareholder and exposed to whatever the CEO like to do.

    Macro, similar issues in modern times. Reporting of even basic economic statistics vary from USA to EU to the extent that Unemployment methods of EU used on USA would have USA unemployment 4% higher than reported. Same for inflation and it being a mere 1.5% variance verses a 0.5% over time makes the whole thing post 2000 a mess.

    Good luck and education is the way. Being totally flexible and STOP LOSS .... STOP loss and if they ever lie to you, GET THE HELL OUT ... because that's the start of it not the end. When a company tells you to expect sale to be up 10% and they are down 10%, its likely the mere tip of some serious trouble and an exit on the bounce that bargain hunters provide, 90% of the time is the best option. Even taking bath of 50% loss is far better than 100% .

    Cheers
     
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  4. StockyGuy

    StockyGuy Observe, Discuss, Apply

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    Someone who could genuinely beat the odds, year in year out. Not just a salesperson.
     
  5. Garpal Gumnut

    Garpal Gumnut

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    As evidenced by?

    gg
     
  6. StockyGuy

    StockyGuy Observe, Discuss, Apply

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    Well, exactly. Even legitimate looking ones tend not to provide completely audited, transparent, up to date results. But their results, however incomplete, are the evidence of legit status.
     
  7. Joules MM1

    Joules MM1 ....everything has an art

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    signal providers, trainers and alike are inherently 'gurus'

    have slowly defined what a guru is (for you at least) thru the 7 vacuous prepositions or 7 suppositions then you go on to say
    ...a contradiction

    the use of the word "it" within that quote tells us much about the state of imprecise thought structure you have at this time, if the first "it" refers to the 7 ideas then I get your point as the 7 ideas are themselves lacking in precision or at least a single defined applicable value, the second "it" in that quote lacks any specific data for us to inspect, again, this lack of specificity is, I suggest, your challenge...

    clearly you have not defined what a "guru" is, is that person a data provider, a data supplier, a provider of wisdom, liquidity seed, bloke over the back fence who got lucky on a hot stock?

    have you thought about working you way to being a "guru" so you can find out ?
    maybe that's the guts of your post?

    what would you have to do accomplish practising guru-ism?

    Altruism is not directly connected to whether there exists a function wherein one person must gain at another persons expense, in practice the opposite is true, to be altruistic, at least, one person gains (the recipient) invariably both people involved in the altruistic act make a gain, maybe not the same degree, one maybe material and the other maybe spiritual, a sense of satisfaction

    this is not guru-ism, it is charlatanism, naive people fall for techno-speak without seeking alternative technical advice, no different to a wannabe pop-star who signs a singing contract without speaking to a solicitor, it is the fault of the adventuresome speedy-hero-treasure-trove ignorant to be sucked into

    anyone who offers me signals, where i find those signals to be of great benefit to me, i'll pay for... if its not worth anything to offer to me then its probably not worth me applying my precious time-to!
    data/signal providers are not gurus by default, therefor you have to ask if you yourself are seeing that person in that light by your own conclusion(s) .....people who are successful at what they do are further respected when they charge (commensurate to benefit) because other like-minded respect value offered with value received......and in the are of royalty there has never been any proof that earning extra income regardless of one wealth does not feed itself back into the value and function of a society

    since the advent of laptops and ipads n such many hospitals across the globe have taken up the technique of "learn one teach one" merely by imparting what you yourself know can display that you understand what it is you know, the fluency of this is easy to underrate and so it is for a trader...let's not forget that many traders who become educators do so out of sheer frustration of seeing waste

    again. I think it's easy to confuse the satisfaction of not just passing on knowledge - you maybe making a significant difference to that person for many years, maybe for the rest of their lives, so rather than being flippant of this idea and rather than having an immediate cynicism think of your part in that effort......

    fake value always gets found out..eventually......always loses its lustre ...eventually.......keep in mind it is others who provide that fame and they are just as apt to offer to elsewhere, to the next infamous guru.....these things are constructs of ones own weakness at either not seeing the truth or seeking the truth of another persons conduct

    i suspect all decent educators (not to be confused with "guru"-ism) have spent many hours satisfying that theyre going to get their work right be scrunching eyes at a screen or old data

    in the end we are all bosses of our trading

    in the end we accede to being our own gurus by satisfying our need for knowledge
    and proving we have the capacity to do more and that that "more" maybe simply passing on what is proven to work regardless of its percentage in absolute dollars
    we cannot at that point take responsibility for what another person does with that knowledge
    again, it should be clear that knowledge and understanding are two vastly different things

    and that's what separates, in my humble opinion, the real traders from the jolly-joggers, having a focus for the difference between knowledge with understanding verses knowledge without understanding......while these are vague constructs themselves and do not account for techniques and methodology, they do by default determine the longterm stickability of a traders

    you cannot practice successful things while practicing ignorant things, one must give way to the other
    and with that idea, I suggest, you delve down into specifics of your questions/prepositions, although, I suspect, you'll eventually find this conversation remote and irrelevant to your own course.
     
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  8. kahuna1

    kahuna1

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    Interesting.

    I started as a trainee dealer a lifetime ago, back in 1983. Over the years, and not being cynical, but realistic, I have seen most things. Trained and worked with some very talented traders. Now, its done supposedly by computers.

    On the technical side, there are around 10,000 hedge funds. Of them, less than 100 actually beat an index on any time-frame say over 5 years on a consistent basis. YES, some will smash it one year, being say long oil when it goes up, or short banks and toxic bonds into the GFC.

    On secret trading systems, gurus and so on. Having looked at, tested and tried many many ones over the years, 99.99% are not ever going to work. They are, self defeating and with super computers and massive amounts of capital and quant guys numbered in the thousands looking for patterns and trying to discover the holy grail, being able to get every trade right, it is NOT possible.

    In fact, what used to work, now does not. A shocking announcement will of course bring selling by the human traders, when that dries up, as it does, the trend following things and computer driven systems which tried to cope with the one off event, and FAILED, when the selling dries up, despite news that WILL and should send say a stock down 25%, the idiot savant computer takes over, senses the selling has stopped and starts buying. The poor human the other side, seeing the bloody thing is stuffed, short the commodity or stock, is squeezed, as the thing relentlessly runs up and up and up, defies all logic till the thing is AT or above where it started.

    IDIOCY ... despite news that will over time shred it ... sometimes we see a selloff followed by a rally back above the starting point. Maybe, maybe a technical system can follow part of this DOWN and PART of it back up, but since its likely the volatility has gone nuts and what used to be a decent stop say of 3 points is a mere 30 min range and on the way down it falls a total of 50 points but has 6 bounces along the way of 10 points, and does the same on the rally, rallies 15 points off the low, then goes and makes a new LOW by 1 point rallies 20 points, gives up 15, rallies 40 points to a new high, gives up 30, before going back to the starting point.

    This is today's environment and often its just straight DOWN and straight UP with enough violence in between that shreds any short term trading system to bits. Sure if you have a high speed trading system and PAY VIRTUALLY NO BROKERAGE ... which is the key, transaction costs, you may be better able to capture the moves, but even then, its hit and miss.

    I say this with an eye to the top hedge funds and high speed trading systems results. Sure some make money consistently. They however enjoy backing of banks or actually brokers with virtually the lowest transaction costs and NO human involvement and stop loss and trade across 50-100 commodities, currencies, stocks and equity indexes. Even then, truth is that 20 of say 100, usually are NOT making money and need tweaking to their individual markets and its a group effort of the results are not slam dunk as one might think. ITs more a snail following and chipping away at the market.

    If it were TRUE, some magical system on the tech side, it would as suggested NOT be sold and what is sold, is a promise, usually full of hot air, that looks good, but rarely in real life due to transaction costs and slippage on fills, and the fact that the system sold is shown on a hand picked time that has been optimized to make it look good .... where as the future is likely different and quite often a system that works for 12 months is the worst one could ever want for the next 12 months.

    Sounds depressing, but if one examines the hedge funds and leveraged funds, their results, even with billions in backing are NOT that good.

    On the VALUE side, fundamental side, forget Buffet, he was following and is following valuation which is the KEY. Knowing a stock is worth $1- and trading at $1- is worth nothing. When its trading at 50 cents, that is another matter. When the market decides to correct and to $2- its not a hard decision to sell something worth $1- for $2 ...

    Again, 10,000 funds out there and verses the index as a benchmark, FEW beat it. VERY FEW ... add value over time. Add value over time after costs. Same can be said of hedge funds, and if one takes out ones that were able to catch some rally, in one commodity or currency which the next 5 years they loose loose loose .... I am not sure there is a SINGLE hedge fund over time that has been of ANY VALUE.

    Basically worthless ... a waste of time. As I said, sure, massive computer high frequency trading system for a bank, ultra low transaction costs, able to trade 50-100 even 1000 different things, chip chip chip away at $1- round turn, and YEP they make money overall, but always having some things just not working and having to continuously tweak the system and squeeze. NOT an option for an individual or even a mid sized 50 million dollar operation. The SYSTEM or whatever your being sold, is rarely worth anything other than looking backwards and it worked when optimized for a set period and that set of rules likely will NOT work looking forward.

    VALUE investors and ones that buy things on value, are the only ones that the elite class, and 100 of the 10,000 share VALUE investors consistently beat the market over time, after costs are the only exception to this. Ones that best the index are less than 100 or 1%, over time after costs. The better ones, beat it by 5,6,7,8% over 3,5,10 year times frames.

    YES, being able to see value, and recognize value in an emerging trend or share will make you even MORE. Buying it when it breaks a new high, verses buying it when its got no friends, and the world is ending is MINIMUM a better entry of 25% and often 50% or more. Hard thing to do, going against the trend, the trend is your friend and following a trend based system, whilst it may sound good, over the years trying to tell or teach people buying a stock without .... WITHOUT ... having any idea of its business or real value is a recipe for disaster.

    You may and will hopefully get some of the rally as it illogically rises 50% or 80% or 100% and a stock worth NOTHING or say 5 cents, can go to $1- ... but sadly eventually ... will always over time reflect its true value, and sure you get 30 cents of the rise from 50 cents to $1- .... great return ... you enter when it retreats and stops going down at 75 cents, hoping for it to advance yet again, all the time, the product removing all the hot air is NEVER going to make a profit, what little cash it had is gone, and one day, it announces its gone into receivership. Out of the blue ... and its a loss of 75 cents minus the 30 cents you made ,,,

    Every commodity, currency and index has some form of value and risks behind it. Trading purely technically, on anything, for me, and evidenced by all the funds around the globe from small to hedge to leveraged, to short and long ... there is NO magic way to quick riches.

    I prefer, VALUE investing and doing the OPPOSITE of technical stuff and SELLING into idiocy and BUYING into the opposite. Sounds easy, buy low sell high, but human nature is the opposite and greed for many takes over when the stock worth $1- hits $2- ... oh its going to $4- ... so money management is of course the other KEY.

    STOP LOSS ... not going too far on ANY stock when it hits 50 cents and you think its worth $1- or over time $2- ... if it goes to 30 cents, and your sucking wind ... do you increase ? CUT or wait for news ? Again an art-form that no computer system will tell you. Quite often the best performing stocks in a normal market correction of the index say of 10% will get smashed by 25% but over time be up double or triple the index. Again, no computer driven system on charts will go, gee whilst I think it goes to say $2- over 5 years, right now its at best worth $1- and its trading at $1.80, Gee I think I will just run and if it goes DOWN it goes down ... if not ... such is life.

    Anyhow, a ramble from me. Love the game, the excitement. I do however think technical trading is a good tool .... TOOL ... but not something I rely alone upon.

    take care

    Mark K
     
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  9. tech/a

    tech/a No Ordinary Duck

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    Assuming you find a legit signal provider/trainer, why do they bother?

    1. Altruism? No, one person's gains are another person's losses in this game.

    No I dont think so

    2. Legally front-running the crowd? Signal followers don't necessarily lose here. I gather for this to be meaningful it requires a massive number of people taking that advice.

    Has happened Renee Rivkin Comes to mind.

    3. "Da money?" I feel anyone offering useful signals and advice does not need to rely on membership fees - even in drawdown periods.

    If I had 200 people paying $50 a month (say) why not take the $10K or $100 a month $20K or 500 members $100k---simply good business

    4. The concept that teaching others makes one a master. Always being accountable to those who pay for your advice may make you more rigorous in your research and trading execution.

    Dont think so.

    5. The ego gratification of being a hero to your followers? I don't mean it as a bad thing.

    Dont think so

    6. Being famous (or at least well known)?

    Doubt it you become famous as a failure far quicker than a success.

    7. The capacity to be a boss of a small business with employees, rather than a loner scrunching his/her eyes at a screen(s) in a dark room.

    Yes this is very plausible.

    8. Its a business like any other your doing the work anyway so why not
    turn what your doing into a business see (3).


    I'd guess it varies between providers, but I'd say it's usually mainly 4 and 5. With the fakes it's basically 3 and 6.

    When a trader's charts and stats look good, it's hard for me to get my head around why anyone with anything worth saying would want to say it to the great unwashed.

    I post charts.
    I don't do it for personal benefit (Financially)
    I do it because I find what I do beneficial to my trading and I know
    how long it takes to find something that works.


    I have no interest in formally teaching what I do so ASF is it.

    If people don't find it of interest or beneficial Ill stop and have
    stopped posting in various threads.

    I enjoy the discussion and every now and then learn something
    from others
    .
     
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  10. StockyGuy

    StockyGuy Observe, Discuss, Apply

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    Incredible, good "ramble", as you put it. I don't have much meaningful to say in to reply to someone in this game since '83. Plus, I'm laconic by nature and bit time-poor by circumstance.

    While you made tangential reference to it, I'd emphasise undercapitalisation surely must end many accounts. Knowledge of the miracle of compounding returns is simply no antidote to the depressing experience of trading conservatively with say a 10k bankroll. With minuscule amounts one (ie me) becomes reckless thru boredom. Maybe I'm wrong. Perhaps a failing trader would fail with 10k, 100k or a million.

    Fact that hedge funds usually fail is no surprise when you reflect how businesses of any sort are usually run. Ie, eg brown nosing fawning for authority, clockwatchers, sleazebag bosses mainly there to crack onto any babes, anyone highly competent moving on to a better job quite quickly, those who despise their workplace so much they are literally there to hurt the company, etc.
     
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  11. kahuna1

    kahuna1

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    Hahaha ...

    Yep old fart, not really.
    Not enough capital if your leveraged .... too much leverage and the biggest of all ... STOP LOSS ... not taking it. I note some use CFD's and if you want a real spanking, that's where you can get one. They give people leverage when they have all the cards. The CFD provider, in times of extreme volatility the price disappears and trades anywhere other than where the physical trades.

    Each to their own. Some can and do make a success of any market. It requires discipline and money management. As to the magic system that will make you a million or a billion, I believe there is no such thing. There of course are clear defined levels things stop at, technically. On a fundamental basis, its much more difficult and a stock can and does trade at times well below value, or well above value. Sometimes many times actual long term value and that's where people get smashed to little pieces.

    I have tried many times over the years to try and bring some reason to markets, or stocks just out of control. Some, hit by short term measures, say like Uranium in 2005-07 went nuts. Fundamentally there was NO long term shortage of it. I shared 20 years of knowledge and research on how many deposits there were, even Olympic Dam and it was unlikely the brief shortage would keep the price UP and anything over $60 a LB and 500 new producers would come on line and swamp the market, let alone already planned production. OF course, it was a waste of time. Trying to sell sand in the desert.

    Sadly, the shares lost 95% of value and sit like frogs now. Whilst on a chart they looked fantastic, it was, like many things a ponzi scheme or a game of musical chairs where the music stops and all chairs are removed. Sure the likes of Paladin went from under 1 cent to $10- plus, but most missed the whole ride up, and entered in the $8-10 range.

    Same for so many others, its often a game of I love it, then I hate it .... even with normal stocks and sometimes, say for TLS, Telstra it was a very long time between when I liked it, sold it in 2000 or 2001 and then until 2012 or 2013 it got stupidly low ... below $2.90 pre NBN ... and then went nuts, whilst the NBN was becoming worse and worse a deal ... I think it went over $6- ... I exited too early and now ... we are still not down where I like it or see any value.

    Patience and discipline along with a lot of work, none of it magical or some secret recipe, just being patient and at times missing it, or kicking yourself you could have sold it higher, or purchased it a bit lower. Basically have to be kind to yourself and let things go. Let a lesson be learnt, if needed when a trade does not work out. Sulking, getting mad, impatient, revenge trading, leverage and a lot of other things are the undoing of most.

    Oh and if you have a system, or an edge on the MARKET which you should if your doing this, STICK TO IT. Like a religion. Without an edge, you will be eaten via transaction costs, stupid stop losses run too far, taking profits too early is JUST AS BAD.

    one could go on and on ... as I tend to do. Each of us is different, different goals, risk appetites and of course capital levels. Hard to ever try and set hard and fast rules when its so different for each investor or trader.

    Have fun
     
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  12. Garpal Gumnut

    Garpal Gumnut

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    I would guess that if a person continually helps fellow investors by spending time and posting charts and interpretations, it is the love of teaching that motivates them primarily.

    Thanks tech/a

    gg
     
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  13. tech/a

    tech/a No Ordinary Duck

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    If you can see that it’s helpful or creates discussions then yes
    If it doesn’t then the motivation evaporates pretty quickly!
     
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