John. Paulson acknowledged wrong investment to customers. Behind the apology, we see what are the implications?
Blog written in 28/11/2011
Well-known fund manager, John Paulson, admitted in October to its customers, trends in financial markets, he miscalculated. He said: “We made a mistake."
Small investors often think, to find life in the stock market, as long as the financial adequacy, it is easy to obtain profits.
The fact is: the stock market in 2011, Europe experienced a debt crisis, the world’s investment markets, investors losing a lot of people; very few people can make money.
We have to understand the fact that small investors and fund managers who each other are human, mistakes that small investors, fund managers cannot avoid the same.
Investor’s intention is that, to concentrate resources in the hands of fund managers so that they have sufficient funds in hand, because a large amount of money, increasing the chances of making money.
Logical reasoning and say, well-funded, indeed advantages, fund managers, purchase advanced equipment, hire quality personnel, must be very high chance of making money.
But the harsh reality is that most of the fund’s performances have disappointed investors.
Did you know that fund performance is disappointing, the main reason is?
Readers, including you, your relatives, colleagues, friends, everyone in this year’s investment results, you can share with each other?
If your answer is uncertain, then you will have to continue to read on this blog.
If the logic of the premise is: fighting against brain of a person in the financial markets, another person in the casino gaming, the results of each other are losing money.
A day melee of people in the financial markets, and a day in casino gambling, in fact is no different.
In my opinion, indulge in a gamble in the casino, his life, and a roll of all people in the financial markets, gambler’s life is more pleasant.
Gamblers physical and mental fatigue, back home to sleep immediately, after waiting for sufficient spirit, striving hard and then go back to the casino.
Financial markets, 24 hours a day, every moment, there are markets for trading.
The United States, Germany, the remarks of government officials, political unrest in different parts of levels, each moment affect the operation of financial markets, the money on the financial markets were, how can sleep at ease?
Gamblers to make money can always resort to overseas; a high degree of investment in financial markets, people can feel at ease vacation it?
Now the world’s affairs, each closely linked together, combining the financial affairs to the political level.
Investors watched nervously information machine every day, reading newspapers, watching television, all day long, to retrieve information on the Internet.
Daily physical fatigue, and cannot sleep, there is money revenue, still is worth, if you pay the labor and will still pay out money around the clock these days, not only affect the normal life, but also affect the career and future.
Life of leisure is that people dream of living.
Do you want to enjoy again, before entering the financial markets, those leisure life?
Often came here, to visit me.
I put the theme of the topic; let me get down to business.
Small investors, Star fund managers will make big money, and their performance tells us that relying on others to make money for ourselves, not the right investment strategy.
Blog wrote here, I would like to ask readers a question:
Are you a fund investor, the other, but it is to enter the market, the daily trading speculative financial products?
If your answer is both yes, then you have not a smart investor.
Because in the financial markets, you may be fund managers counterparty.
If he is to make money, you may lose money, if he loses money; you get more than he lost.
In other words, you are often forced to stand in a loss of one. What are the reasons?
Because the fund managers are forced, often face a violation of common sense restrictions, they often face, investor subscription and redemption pressure.
The day the stock market low residue, fund investors are close to financial news, financial data, or newspaper commentator on the goodwill of exhortation, uncertain mind control, affecting the investment.
Move by the fear of loss of atmosphere, investors will choose to redeem, so fund managers are forced to sell shares to meet investor redemptions. In other words, the fund company, in the decline of the stock, sold stock. Profits come from?
In contrast, the stock market in full swing in the day, investors flock to subscribe for or purchase fund shares, fund companies look to increase the income of incentives, had to chase the stock higher.
Rise higher and higher every day in the stock market days, if the fund holds a large amount of cash, the Fund Manager will be condemned incompetence.
Because fund investors, there is no reason to pay a management fee, so large amounts of cash held by fund companies, rather than the use of funds held, and increase revenue.
In theory, the fund manager should buy low, sell high in order to earn profits.
Fund based on investor subscription and redemption of the laws of the market, fund managers in the financial turmoil, because of practical controlled, forced to buy high-priced stocks, while selling at low prices when, after wave, pays the bill count, results that can ideal?
Next Issue：Do you possess, smart investors, the necessary conditions?
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