linkon and atulas - LOL! You're correct, traders are boring people! So why not spruce it up a little, eh?
Meanwhile, The Starving Trader would like to bring to light some poor journalism by so called finance "journalists" - this one's on an yahoo article. He is unable to replicate his blog post here exactly so excuse any formatting errors:
Yahoo Finance India Jumps on the Irresponsible Financial Advise Bandwagon
The Starving Trader was browsing the web to counter his mid-afternoon slump lack of trading action and stumbled upon an article on Yahoo Finance (India) that made him take note, perk up, stifle a minor gag reflex, and that left him with an overall feeling of helplessness that culminated in nothing more than eye-rolling, and of course, this blog post.
The article in context is here is fashionably titled (click to open in new window/tab):
"Equities are pass; investors switch to commodity trade"
Snapshot of Yahoo Finance India article
titled "Equities are passe; investors switch
to commodity trade", 21 March 2011,
by Natalia George.
Note: Click snapshot to the left if you're having trouble with the link above.
Okay, so The Starving Trader gets the author's gist - that the Commodities market might be a viable alternative for investors (and traders) frustrated with the lack of returns in Equities. While this is a reasonable assertion, the utility of the advise ends there. The keyword here is might.
Commodity futures trading is no different from equities, or index futures, or forex trading, in that the fundamental ideas of risk management, limiting your risk to manageable amounts, and letting your profits run apply to trading in all markets where supply and demand of the masses are involved. Commodity markets in India, while extremely beneficial for the actual...
...hedgers, pose significant risks to inexperienced speculators because of their high leverage potential. Throw in with that the facts that brokerage fees on commodity transactions are also incredibly high and that the volumes on the MCX and NCDEX, although rising, are nowhere near ideal amounts for a speculator to operate in regularly on an intra-day basis - bar a very few commodities like Crude Oil, Silver, etc - it suggests that extreme caution is imperative on behalf of the new participant in the commodities arena. The Starving Trader has first hand experience with trading commodities as we all know, and as an example, one may view the Trade of the Week (last week) for an idea of disciplined commodity speculation.
So, to make statements claiming that the commodity market offers a "safe-haven" as opposed to the equities market is downright ignorant and draws no distinction between a financial journalist and an ignorant "tip-monkey". To quote Natalia George, from her article:
"Commodities today, is viewed as a safe haven, given the high untamable inflation rates that have kept commodity prices afloat."
Let alone the miserable use of punctuation and a total disregard for the plural rules of English, the author is guilty on other counts, viz.:
Not crediting a source for asserting that commodities are being viewed as a safe haven: Really, it could be the author's friend's grandma for all the uninformed reader's knowledge!
Again, to aver that the cause of high commodity prices is simply "untamable inflation" in of itself begs for elaboration and explication.
Towards the end of the article, the author goes on to assert that with these commodity prices at all time highs, why not join the herd and get some "glittering" returns. Really now? The Starving Trader is appalled! Whatever happened to the concept of 'buy low and sell high'? Would you stack up on 5 kilos of onions when prices are hovering around Rs. 250 due to some freak incident, or would you rather buy them when the prices pull back down to something more manageable?
Yahoo Finance has always been The Starving Trader's preferred portal for quick access to high-level financial data and interactive charts in the absence of other platforms. However, if the quality of financial reporting is to be this irresponsible and amateurish, then Yahoo had better be ready to lose more of its brand name to firms that actually hire folks who, in the least, think before they speak.
Right, The Starving Trader hopes that he was able to highlight an example of the garbage that floats as sound financial advise out in the public sphere. Remember, there is no substitute for logical financial planning/investing of your own - at least this way if you still lose money you have only yourself to blame, and your own mistakes to learn from.
Peace out!
