The Online Investing AI Blog

I just checked out Kapitall (with 2 l’s) and was really surprised to find so many new and fresh ideas. After my experience with Cooliris, I thought how wonderful it would be to find new ways of displaying the same old, boring stock data. And, just like that, a few days later I found out about Kapitall!

The Kapitall Desktop

As I mentioned before, I think that computers have come a long way in the last 30 years, but the way we interact with them has not changed much since the introduction of the mouse. And, looking at stock charts hasn’t changed either, except that they have gotten more complicated and less readable.

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Business Strategy, Internet, Investing, Success Apple, design, detail, Internet, Investing, kapitall, management, Money, portfolio, stocks, web sites

After reading this article about how Amazon’s profit has grown by 45%, I started thinking about the other companies that have been making huge profits. Companies like Apple and Microsoft.

Amazon is positioning itself as the leader in eBooks, with the success of its Kindle readers. It was just a few years ago when people did not believe that eBook readers would ever succeed, because reading books on a monitor doesn’t work. Amazon overcame that hurdle by licensing E-Ink, the revolutionary new technology that makes an eBook look more like a real book.

Apple has had similar success with its iPhone, which in just a few years has become one of its most successful products in history. The iPhone 4 was the best selling product ever for Apple. And its stock price reflects the company’s success.

Apple's stock from March 2009

What do all of these successes have in common?

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Accelerating Technology, Business Strategy, Dreams Come True, Online Investing AI, Success Amazon, innovation, ipad, iPod, Kindle, microsoft, Money, stocks, Success, xbox

pic by king89 @ Flickr

I got you, didn’t I?

This headline is a classic propaganda technique. The Nazis called it the “big lie.”

Extreme predictions are more widely accepted. It seems counter-intuitive, but the more outrageous the prediction, especially financial predictions, the more likely it is that these predictions will be accepted.

There are a few reasons for this.

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Investing, Money, Online Investing AI, US Economy 000, advising, Dow, dow 1000, dow 36, elliot wave, estimates, forecasting, predictions, prices, stocks

Since my posts about BP have been quite popular recently, I thought I would comment on this article on Yahoo Finance. The article talks about how BP may be able to cap the well in the next few weeks. As I mentioned in the first post about BP, usually the market overreacts to bad information.

In this case, it turned out that the situation was really bad, in fact it is the worst oil spill in history. And the blame is landing squarely on BP.  The share price has gone down since the accident,  and it seems that the well will be plugged soon. Although we now know the massive damage caused by the well, it seems that BP’s share price may be turning around.

Does this mean that the price is heading back up?

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Investing, Success black swan, bp, call, chart, commodities, disaster, Money, oil, options, put, stocks

After reading this great post at Early Retirement Extreme, I was reminded about the low quality of financial advice that most people accept. Not only do they accept it, but they actually pay for it!

Mutual fund companies make billions of dollars from unsophisticated and naive investors who buy mutual funds and hold them. What most of these would-be investors don’t realize is that each year the mutual fund managers take some of the money for themselves. It seems like a small amount, only about one percent.

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Internet, Investing, Money, Success advisors, buy, hold, Investing, Money, mutual funds, retirement, stocks, Success

When I was a freshmen on the track team I had one of the easiest jobs.

I set up the hurdles.

I knew exactly where to put them. They were pretty light.

Then I would watch the runners grimace–especially at the end–as they struggled to clear the obstacles.

The lesson: goals are easy to set up, but they’re hard to clear.

Likewise, your financial goals can be simple to formulate, but can be difficult to stick to. Here’s technology to the rescue.

Stickk.com offers you a way to set up a “commitment contract” and share it with your friends and family to stick to those goals.

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Internet, Investing, Money, Online Investing AI assets, commitment, financial goals, goals, Money, stickk.com, stocks

After reading dozens of books about human trading and Automated Trading, I feel like one of the biggest shortcomings of trading books is that the strategies are not very well tested. Although each author seems to swear by their systems and indicators, they rarely present any real evidence that their systems work. They do present charts that are handpicked to show when their system worked, but they conveniently ignore any evidence when they don’t work. And, they rarely show a track record of trades so we have an idea of how often it might work in actual trading.

I agree with the authors of Empire of Debt, when they say that trading the markets is not a science, and not even an art. I wonder if it might just be voodoo, where nobody bothers to really find out how successful trading systems are. But that is a topic for another post.

Why am I starting this post about the problems with books about trading? Because The Little Book That Beats the Market is a pretty good exception. Not only does it avoid many of the tricks used by most trading books, the author even explains 7 common faults with trading systems, and how his system has avoided these faults. I found this a singular and refreshing explanation of the rigor of  the methodology used in trading books.

How does he do it?

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Automated Trading, Great Books, Internet, Investing, Money, Success, US Economy Investing, magic formula, markets, Money, stocks, Success, trading

Recently I read a really wonderful investment book that I want to share with you: The Dhandho Investor by Mohnish Pabrai. I love this book because it is easy to understand but also offers really good investment information.

In the book, Mohnish talks about concentrating his bets into a few companies that he believes are most likely to succeed. Many investors and virtually all mutual funds have so many positions that they don’t have the time or energy to really study each one. The author suggests studying many companies, but only buying a few.

The gist of Mohnish’s strategy is value investing, and the most successful and famous value investor is Warren Buffett. I think value investing makes sense because it buys companies that are cheap at the moment, but likely to increase in value quickly.

What’s so great about this book anyway?

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After reading Peter Schiff’s Bull Moves in Bear Markets, I really started thinking about the coming financial collapse. Many people assume that our lives and the government are going to continue going the way they have gone for the last several decades. But there is just one problem: too much spending and not enough money.

Just as most people were unaware of the housing bubble and the impending subprime crisis, most people are unaware that the day of reckoning for America is not far away. On that day Americans and the whole world will realize that America cannot pay its debt. And then the dollar will probably collapse.
Why all the doom and gloom?

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Business Strategy, Dreams Come True, Great Books, Investing, Money, Success, US Economy crisis, financial collapse, Investing, Money, schiff, stocks, Success

pic from artemuestra @ Flickr

It’s now drifted into stock market legend, so we’ll probably never know the truth, but here’s the story: Last week, the market suddenly and inexplicably imploded.

It was already a bad day on Wall Street. The Dow was down a couple hundred points on May 7. Without warning, though, the market plummeted nearly 1,000 points.

The reason for the fall–or perhaps the excuse–was that a trader wrote an order to sell a “billion” shares, instead of a “million” shares. The massive loss was the difference between a “b” and a “m.”
Before we get too snide about this bad-typing trader, it’s important to remember we’ve all made financial mistakes that turned into an avalanche.

I know I have.

There’s the mislaid bill that I swore I paid. It turned into late fees and higher interest. While it wasn’t exactly lead to a stock market sell-off, the lingering effect of those high payments lasted for years and cost me hundreds. I picked up a couple of hot stock tips that blew cold while I wasn’t watching.

So, how do you avoid the financial mistake avalanche?

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Accelerating Technology, Automated Trading, Investing, Money, Online Investing AI, US Economy automate, billion, bills, million, mistakes, sell-off, stock market, stocks, trading