Skip to main content
No. of Recommendations: 0
Stas,

You're right about JJC being hard to trade. But if one isn't trying to 'trade' it, but is looking at it as an 'investment', the illiquidity and wide spreads can be tolerated. Also, a would-be "investor" shouldn't be tracking it with a daily charts. Weekly bars tell the story in a timely enough manner.

Depending on how "exotic" one likes one's charts to be, the bars could be formatted as a line chart (or Renko, Kagi, Three Line Break, etc.). But Heikin Ashi is good enough, because it filters out some of the noise seen with just conventional candlesticks. https://schrts.co/CCXKSiQB

My comment on that chart is this. When you see that many up-trending, white bars, you know you're late to the trade, especially when you note that the price of JJC has nearly doubled in just a year's time. That isn't a 'value investment'. It's a 'momentum trade', which I despise, because that's not how I live my life in the real world. If broccoli was $1.49/lb last week, and this week it's $2.50, I don't buy more. Same-same with bell peppers. If last week they were $0.79 each, and this week they're two for a buck, I do buy more and adjust my menu accordingly. I'm a "value shopper", and I'm a "value investor", just as Ben Graham laid it out in his classic intro.

As has been noted endlessly, stocks are the only thing that people rush to buy as the price goes up. The more the price goes up, they more anxious they become about "missing out". That's absolutely crazy, and the trade they are making is this. They are increasing 'price risk' when they minimize 'information risk'. Absolutely crazy, as Mamis lays out in The Nature of Risk. Admittedly, it's a game some people play well, notably, Wm O'Neil. But it's not a game I want to play. So I don't chase prices. I missed copper's move, and that's fine with me.

Silver's another matter, as is gold. Yeah, both have industrial uses, and both are a "love trade" as the gold bugs like to say. But their real use to an investor is as an inverse to the $US, and I was in and out of some miners and the index that tracks them earlier in the week and made good money. Right now, I'm trading small, just trying to work out the bugs of a campaign for when it will make sense to put on size.

Arindam
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.