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Post a Comment March 4, 2009 – 6:36 am |   | Permalink |  Print This Post |

Our previous article “The Anatomy of a Crash“ shares some very interesting statistics of previous declines. We dissected the data and charts and found some common factors in all major declines. To access the full article, simply register (yes it is absolutely free and this is not a spamming exercise) and we will email you the password.  The reason for this is to increase our member-base (more importantly to see how many of you are actually reading our articles) and to facilitate participation from members to achieve our goals: ie to find public investing talent and to provide an objective and transparent benchmarking tool for all (alleged) stock experts and get-rich-quick trading softwares.

Those who have been trading in the last few weeks will know that trying to catch the turning point is a very costly game. The Dow has dropped by 19% since this decline started on 8 February (8300 to 6700). Trend followers who have been shorting will have made a nice profit. TheInflationist have analysed recent charts, specifically looking into the statistics of significant declines. One of the key common findings  in all recent declines are that most of the recovery/retracement of that decline happen in the first few days of the turning point. Beyond that, the upside is minimal (relative to downside, assuming further downtrending). So, when this thing turns around, if you do not catch it by day three (assuming all three up days), it may be worth waiting. Some of the statistics during the last few declines are listed below:

Present

• 19% so far
• 23 days and counting… (9th Feb - present)
• 9.4% lower than previous low

November 2008

• 22% fall (9620-7440)
• 16 days

The Inflationist Challenge: Not Another Stock Game

The Inflationist is a believer of undiscovered public talent, evidenced by the success of the Idol concept. The Inflationist aims to provide objective, transparent stock coverage by leveraging on public investing talent. The experiment we plan to conduct, with your support, is to invite all investors to trade publicly and to start off each calendar year with $40,000 (AUD or USD or EUR - we calculate your portfolio returns in 12 months time) to invest in a virtual portfolio. That way, your portfolio performance speaks for the quality of your articles (price action is all we care about really). The slightly modified guidelines are:

• You may trade in commodities, currencies and bonds
• You may trade both long or short positions
• Purchase and sold prices are calculated using the opening or closing price of the day
• You may trade in any market (Dow, FTSE, ASX, DAX, Hang Seng, Singapore, etc)
• No Day-Trading as trades are impossible to verify and retrospective trades are of no benefit to readers
  

If you have an informed opinion on investing that you wish to share with The Inflationist community, we welcome you to register as an author to participate in The Inflationist Challenge. Once registered, you need to be logged in to access your personalised Stock Trading Portfolio Management System using our Stock Trading Widget. This customised and unique Widget will automatically update prices and calculate your portfolio performance. To learn how to use our Widget, simply follow the instructions here.

By updating your portfolio based on your views and trade plan, your portfolio performance speaks for the quality of your articles (price action is all we care about really). The Inflationist aims to provide an open platform for Stock Bloggers, Investors and Traders to provide objective, transparent stock recommendations - allowing readers to leverage on undiscovered public investing talent.

To post an articles, our WordPress-powered platform is self explanatory and it is as easy as sending an email. For those not familiar with Wordpress, and cannot be bothered learning, email your picks and a brief explanation for your selection (refer to The Speculator’s columns to get an idea of how this should be written) to us at theinflationist@gmail.com. We will post your articles for you on the site.