Is stocks like gambling?

[WillieWonka]

The information has been repeatedly posted. Your own post show summary judgement and default. To this day onoin futures cannot be traded. Onions are used as a case study to this day both for law and for economists. It would be a terrible mistake to assume this was an isolated incident.

You have repeatedly failed to show one instance where a customer account at the CME or CBOT lost money because of a speculator default in the last 100 years. Just one. Any one. You told us speculatos are notorious for not paying. So, just tell us who didn’t get paid on those markets in 100 years.

This is your sixth failure.

The challenge stands.

And your other claims don’t stand up either:

How about your claim the CME charges fees that include the costs of speculators? Just how does it work? It’s your claim. How does that work?

You claim commodity prices are tied to production cost and interest rates. So, maybe you can tell us how price can move nearly 8% in three days on commodities that have already been harvested if price is closely tied to production cost? It’s your claim prices are set by production costs and interest rates. Is it possible those prices could move even lower under your notion of price discovery?

 

[WillieWonka]

For anyone not familiar with how commodity exchanges work…

When a trade is made, a buyer and seller execute that trade. They actually enter into a contract for execution at some future date. One person agrees to buy a given amount at a given price. The other agrees to deliver that given amount at that given price.

However, immediately after the trade is executed, the relationship between buyer and seller is eliminated. The Clearing house steps in and asumes the obligation to deliver to the buyer, and it steps in and assumes the obligation to buy from the seller.

So, each original participant is shielded from any actions of the other. The buyer doesn’t care who he sold to, and doesn’t care what that party does. Why? Becase he no longer has obligation to that party. His obligation is with the exchange clearing house.

Neither the clearing house for the CME nor the clearing house for the CBOT have failed to honor a single obligation in over 100 years. This includes during the depression, and during this last year of financial trumoil.

Hope ths helps.

 

[DebChris]

However, if a person is using primarily or exclusively technical analysis to deal with stock, then one does not need to know what the company does.

Note: That should not preclude having enough information that one does not rade in stock of a company, for example, that is devoted to ABC, e.g. or abortion (to use two examples); or a drug company whose focus is on cloning.

Using technical information to base buying and selling on is not an idiot’s paradise nor is it immoral; it simpy says that if a stock is going down, buying it right then does not make sense; and if it is going up, selling it may not make sense right then either.

We use impartial technical information daily to make choices. We look for the best price on items we buy at grocery or department stores…
When it comes to stocks, prudence tells us to look at a company’s track record. Does it consistently make good financial decisions? As an ad used to iterate, past performance is no guarantee of future gains.
A person who plays the horses may look at a colt’s lineage as well as performance in past races. Was the father a Triple Crown winner? He may look at the colt’s build before placing his bet. Odds are set to reflect the colt’s chances of winning the race. Rarely, a long shot will defy the odds and win the race.
One of the questions for the final statistical project in one of my classes was, “What did you prove?” The only acceptable answer was “absolutely nothing.” We can only point to expectations. New information can change all results.

 

[otjm]

Well I wish you luck but I am staying with the “hold” philosophy it is based on the concept that $1 invested today will typically grow to $2 in 10 years, $4.30 in 20 years and $6.34 in 25 years(real dollars). The growth is through company improvement, not market timing. I do not understand how other systems were not on “buy” signals for Ruby Tuesday in Sept-Oct '07 those purchases would be big losses

If one was paying attention to the market for the previous 6 to 12 months, one would have seen clear “sell” signals, not “buy” signals.

Looking at the chart of Ruby Tuesday in and of itself would not be sufficient information in which to evaluate the stock for a buy or a sell. In fact, what was used was a combination of search parameters (which brought up Ruby Tuesday and about 9 other stocks) and the fact that the market itself appeared to have bottomed (and that arguement is till ongoing, as I am aware). Any purchase of a stock is a risk that it may go down. I follow the model of no more than 1% risk of equity on any purchase, and a total risk of no more than three stocks at 1% risk (so no more purchases can be made until the trailing stop loss has risen above the original purchase price). One of the search paramters was that the stocks selected had to be in the 97%+ of all stocks for relative strength of sales. There were others.

Market timuing has many meanings, depending on who one talks with. Often, it is taken to mean that one enters the market at its bottom (or jsut barely after it has turned) and hlods until the market is just at a downturn to sell. Despite a few “guru’s” who claim to have such market timing, the better and more reliable literature indicates that one should try for the 80% inbetween the turns; take the majority of the gains and leave the "guru’s’ to their polishing rags and crystal balls.

As I have said elsewhere, the concept that one invests $1 today and lets it eventually grow to $2 in 10 years has been pretty thoroughly questioned and is being rejected by any number of people who have been involved with the markets for a long time. So much of that depends on market timing itself - not investing that $1 when the market is overheated and close to a peak; picking reliable companies that can grow (blue chip stocks pretty much have done their growth - that is why one gets dividends instead of price appreciation), and not hoping to sell in 10 years and finding that the market peaked a year ago and one’s stock has taken a 30 to 35% loss from last year’s peak.
Buy and hold has been compared to, for example, the S&P 500 to see which is better. The trouble with that comparison is what is bought and held, as well as when. If one had bought in 1999 (10 years ago) and held, one would probably find that instead of $1 being worth $2, it might now be worth $.85. Or, in the case of some of the companies that were selling at the time and looked like good, longterm prospects, $.15.

 

[Texas_Roofer]

You have repeatedly failed to show one instance where a customer account at the CME or CBOT lost money because of a speculator default in the last 100 years. Just one. Any one. You told us speculatos are notorious for not paying. So, just tell us who didn’t get paid on those markets in 100 years.

This is your sixth failure.

The challenge stands.

And your other claims don’t stand up either:

How about your claim the CME charges fees that include the costs of speculators? Just how does it work? It’s your claim. How does that work?

You claim commodity prices are tied to production cost and interest rates. So, maybe you can tell us how price can move nearly 8% in three days on commodities that have already been harvested if price is closely tied to production cost? It’s your claim prices are set by production costs and interest rates. Is it possible those prices could move even lower under your notion of price discovery?

Please re-read post #73 which cites the judgment for failure to pay. It is from the cited exchange. These posts are well past absurd both sides show speculators failure to pay and the resulting lawsuit. Now we are asked to believe the lawsuit was not about speculators, and not about money. We are ask to believe that no one lost money and yet the judge - what through incompetence?- awarded a judgment on a moot case? The fact is speculators failed to pay and the losses were so great 54 years later it is still illegal to sell onion futures.

 

[WillieWonka]

Please re-read post #73 which cites the judgment for failure to pay. It is from the cited exchange. These posts are well past absurd both sides show speculators failure to pay and the resulting lawsuit. Now we are asked to believe the lawsuit was not about speculators, and not about money. We are ask to believe that no one lost money and yet the judge - what through incompetence?- awarded a judgment on a moot case? The fact is speculators failed to pay and the losses were so great 54 years later it is still illegal to sell onion futures.

Now you have failed seven times. The transaction in Kelly vs Kosuga did not occur on the CME or the CBOT. It was a deal for a cash transaction for physical product and was off the exchange.

My challenge stands unanswered.

You have failed seven times to show one instance where a customer account at the CME or CBOT lost money because of a speculator default in the last 100 years. Just one. Any one. You told us speculators are notorious for not paying. So, just tell us who didn’t get paid on those markets in 100 years.

Can you also back up your claim the CME charges fees that include the costs of speculators? Just how does it work? It’s your claim. How does that work? You made the claim.

Ad you are stll neglecting to back up your claim that prices converge to production cost and interest rates. So, maybe you can tell us how price can move nearly 8% in three days on commodities that have already been harvested if price is closely tied to production cost? It’s your claim prices are set by production costs and interest rates. Is it possible those prices could move even lower under your notion of price discovery?

You have failed seven times to show a CME or CBOT loss to a customer account due to speculator loss in 100 years.

You have failed to back up your claim exchange fees include the cost of speculators.

You have failed to back up your claim prices converge to production costs plus interest.

Now I am bored. I gave you seven chances. Goodbye. Good luck. It has been a pleasure discussing these issues with you.

 

[Texas_Roofer]

Now you have failed seven times. The transaction in Kelly vs Kosuga did not occur on the CME or the CBOT. It was a deal for a cash transaction for physical product and was off the exchange.

My challenge stands unanswered.

You have failed seven times to show one instance where a customer account at the CME or CBOT lost money because of a speculator default in the last 100 years. Just one. Any one. You told us speculators are notorious for not paying. So, just tell us who didn’t get paid on those markets in 100 years.

Can you also back up your claim the CME charges fees that include the costs of speculators? Just how does it work? It’s your claim. How does that work? You made the claim.

Ad you are stll neglecting to back up your claim that prices converge to production cost and interest rates. So, maybe you can tell us how price can move nearly 8% in three days on commodities that have already been harvested if price is closely tied to production cost? It’s your claim prices are set by production costs and interest rates. Is it possible those prices could move even lower under your notion of price discovery?

You have failed seven times to show a CME or CBOT loss to a customer account due to speculator loss in 100 years.

You have failed to back up your claim exchange fees include the cost of speculators.

You have failed to back up your claim prices converge to production costs plus interest.

Now I am bored. I gave you seven chances. Goodbye. Good luck. It has been a pleasure discussing these issues with you.

Trying to wear out the word “you”? It is clear there is a sever problem here… Just to show again here is another government comspiracy to prove the issue ( as though you will read it)

July 26, 1955—The Commodity Exchange Act is amended to add onions to the list of regulated commodities.
August 5, 1955—The Commodity Exchange Act is amended to allow the Commodity Exchange Authority to set the level of registration and renewal fees for futures commission merchants and other registrants. Prior to this, these fees were fixed legislatively at $10.
June 18, 1956—The Commodity Exchange Authority issues a complaint charging Vincent W. Kosuga, Sam S. Siegel, and National Produce Distributors with manipulating and/or attempting to manipulate three onion futures contract months. The complaint charges the respondents with one attempted upward manipulation (of the November 1955 contract), one attempted price stabilization manipulation (of the November and December 1955 contracts), and one successful downward manipulation. The March 1956 futures contract, the subject of the alleged downward manipulation, fell from near $2 per 50-lb. bag in late 1955 to 15 cents on the last trading day in March 1956. On June 3, 1960, a USDA Judicial Officer found that the respondents performed the attempted stabilization and successful downward manipulation, but did not find sufficient evidence for the upward manipulation. Following the issuance of the complaint, Congress held hearings to consider banning onion futures trading.
July 24, 1956—The Commodity Exchange Act is amended to allow for the exemption from speculative position limits of anticipatory hedges (i.e., long hedges of anticipated needs for a commodity by processors or manufacturers). On the same day, the Bank Holding Company Act of 1956 makes some technical amendments to the Commodity Exchange Act.
August 28, 1958—The Onion Futures Act bans futures trading in onions, but does not amend the Commodity Exchange Act. Onions remain on the list of regulated commodities until 1974 and the Onion Futures Act remains in effect to this day.cftc.gov/aboutthecftc/historyofthecftc/history_precftc.html

While what a conspiracy