I always get a lot of question asking how someone becomes a trader. The truth is that there is no simple answer, it is a combination of education, ability, personality, drive & luck. I’ll quickly go over them below:
Education
At a minimum a University Bachelor in Commerce/Economics and preferably some industry courses. All the large institutions recruit at the major Universities in September for positions beginning after graduation in June/Aug. There are usually two types of positions, Analyst & Associate. Analyst is for Undergrads and Associates for MBAs. Read more
I’ve said it before and I’ll say it again: The mess in the credit market is the fault of the rating agencies. Had they not misled investors by giving high ratings to toxic investments, things would be very different today.
The Financial Times has a great article on an “error” found in the rating algorithms of rating agency Moody’s. Apparently once Moody’s discovered the problem, they decided it was best to keep the investment’s inflated rating instead of adjusting it downward to the correct level.
Here is the evidence, the proof, that ratings agencies have fundemental biases and flaws. The system doesn’t work if they are not honest, much like similar work done by financial auditors.
In order for investor confidence to return, investigations must take place and we need to understand the full extent of their misappropriations. If it is determined that Moody’s or any other agency was aware in advance of the true risk of the structured credit products that had their highest ratings, then they deserve the same fate as Enron’s partner in crime, Arthur Andersen.
There should be no room in the the marketplace for deceitful watchdogs.
Today the Toronto Stock Exchange Index (TSX) hit 15,000 points, its highest number ever.
Even though 15,000 is purely a nominal number, skewed heavily by a small number of companies granted heavy weightings by the indexing formula, now is as good a time as any to reflect on the past 10 years. Read more
I wish this wasn’t true. I wish there was a nicer way of saying this. Alas, there is not.
Canadian consumers are suckers, willing to buy at any price.
How else can one explain the record quarter for new auto sales during the first quarter of 2008. Sales that had their biggest increase since 1998. That’s a freaking decade, people!
Sales of new passenger cars were up 17.8%, the largest increase since 1976. That’s more than three freaking decades!
I don’t get it.
Canadian cars are expensive. No, that’s too nice, they’re a rip-off. Auto manufacturers are scamming the Canadians and they seem more than happy to go along with it.
How else can one explain these sales numbers?
The Canadian dollar has been near or above par with the US for over a year. Yet Canadian car prices are still more than 10, 20, even 30 percent more expensive than identical models south of the border. The only leverage Canadian consumers have to reduce this discrepancy is to buy used cars, or simply not buy at all.
However, going out like lemmings and buying new cars just because the dealer’s marketing campaign uses slogans like “Canadian Pricing” while giving you a 3% discount on price is just stupid.
Boo on you Canada, Boo on you.
Very busy on the desk today.
Just found an interesting article on foreclosures and the Condo market.
A couple of years ago I remember seeing a documentary on people waiting in line for days to buy Condos in Florida. It was absolute madness. It was the top of the market.
This article has me thinking that if I had the capital, maybe it would be a good idea to buy some prime real estate in a sunshine state. I could rent it out to vacationers and stay for free when I need a break from the cold. If only….
According to a new Bloomberg survey, the world wide CreditCrunch™ appears to be slowly fading away.
You might be wondering what the heck is this CreditCrunch? There has been a lot written on the subject, but not too much explained at a basic level. So here goes…..
The current issues with credit is that it has become more expensive. What does that mean? Well, essentially it means that the funding of lower credit investments have become more expensive. Why? Because people were afraid of risk and wanted only the safest investments. Treasury Bills (T-Bills). Read more
Ed Clark, CEO at Toronto Dominion Bank spoke at conference in New York today where he stated that the bank is assuming “dramatically lower” commodity prices in the long run.
If the world financial system is “over-inflating” prices as he put it, then we’re in a bubble. As bubbles don’t last forever, TD Bank is wise to begin planning for lower prices in order to protect itself from future losses.
His remarks are in stark contrast to the bullish predictions by market analysts who see prices going nowhere but up. If the head of a major international bank is weary of current prices, then maybe it’s time for you to review your portfolios…. Or maybe the analysts are right….What do you think?
Quote of the day:
“[Citigroup] is so deep in a black hole that even renown physicist Stephen Hawking could not help the ailing company” – Banking analyst Meredith Whitney (via NY Post)
Ouch!
Some curious US economic numbers were released this morning. April’s retail sales fell 0.2%, however, when excluding auto sales the number becomes an increase of 0.5%, beating forecasts calling for a 0.2% rise.
The first curious observation is that retail sales were up, even with the recent drop in consumer confidence numbers. This can partly be explained by strong sales in defensive retailers like Wal-Mart and Costco that were reported for the same period.
The second curious observation is not that car sales dropped, as that has to be a no brainer given gas prices and the auto industry’s snail pace at responding to changing market conditions. It is that sales at filling stations also dropped. One would think that it would be very difficult to produce lower sales when your product is in-elastic and at record prices. This has to be the most compelling evidence that people are changing their driving habits. Specifically, they are driving less. Car companies should take note, as less driving will undoubtedly lead to even lower sales.
This will be a slow week on the economic front, as the only economic data out of Canada today is the release of data on the price of new homes in March. Prices rose 0.2% compared to a month earlier, matching economists’ expectations.
Year over year, new home prices are up 6.1%, a healthy number, although the market is appearing to slow down a bit as the increase this year is slightly lower than last year’s.
Overall this is good news. Continued strong sales in new homes will encourage developers to begin new projects, employing laborers and strengthening the economy. Eventually we’ll meet a point where we’d expect to see a decrease in sale prices as inventories of new homes pass the number of people looking to purchase them. This is normal in a market economy and there is no evidence to suggest the type of collapse that happened south of the border.
