Thanks Wink take your time to read it and feel free to tickle my...

Thanks Wink take your time to read it and feel free to tickle my brain.

Shy i TOTALY understand what u mean. I too made a ton of money when i first started. It seems the more you know and learn about the stock market the less well you do.

I then lost about half of my gains when i thought i had it all figured out. I think the best way is to dumb it down again and stop being rational but still sensible. I think the only way to make money is to go SENSIBLY against market sentiment. Thus if ppl are panic selling and you truly believe this sentiment is wrong buy back for a bounce.

If you own a share and its pumping like crazy dont hold onto it sell on fact and the "craze". That being said you must also sus out what is genuinely bad i guess which make it a whole lot of grey and are to tell.

I feel the market is sort of like music, it has a rhythm to it. If you can follow the rhythm and the up and down swings then all you got to do is ride it. I have seen some ppl do this well and have that knack and feeling to what going to happen within the day. These ppl i totally admire and am still in awe how they do it.

Other ppl do you technicals which also work to sum degree. I find it best to use it all, technicals your gut and the "rhythm" to paint an overall picture and then base your decision on that.

Af for if academics comes into play. Well basically its hard to apply what we learn in books to real life. Ill try to explain:

Now not not sure how much u know about cooperate valuation but a share price is calculated by how much its total EXPECTED cash flows sum up to be forever. This will get you the value of the company. Then we just divide by how many shares there are.

For example if i was a company that had 10 dollars cash flow today and 10 tomorrow my total value would be 20 (a bit less because of time value but lets not get complicated).

Now if there are 4 shares then the share price would be 5 dollars.

Now the only problem is the word expected. No one knows for sure what the future cash flows for a company is this plus we also have to discount using a rate for each cash flow. (this is to count for risk and time value ect) this discount rate is also unknown and has to be made up.

Because of this many ppl will actually come up with a different answer for the company and share price value. This rage of values usually happns to be big in itself so there will be a huge range of ppl valuing the company. This is why the price constanly moves because of differences in opinion. ( if my value is higer than the sp i will buy if lower i will sell ) although this being said its really the forces of supply and demand that govern the price of a share.

There are other ways to value a share as well but dont get me started :)

So because of the huge range and the fact that the future of the company is unknown ( they might build a mine and get more cashflow or an earthquake might kill everyone and no cash flow ) makes it very hard to actually make money of shares.

Another reason why i havent made money off what i know is that the actual process of the valuation i mention is very tedious and uses a lot of figures that change dynamically thus by the time you calculate it you will relise you will need to recalculate it because the numbers have changed. All this effort for an answer that is so vague and unhelpful leads me to just doing what everyone else is doing and using technically and the gut mixed and blended in with a bit of common sense.

But when you think about it this is the way it was supposed to be. If there was sum magical way and formula ppl who knew it would be very rich and it wouldent stay a secret for long. and even if everyone knew this magical formula no one would be willing to trade since everyone would have the exact same opinion. Remeber liquidity comes from differences in opinion. if everyone thought the same we would have no market.

well i hope this has helped. Let me know what has worked for u.

VIPHAR