There was quite a bit of good that occurred later in the week, especially with my strongly positive returns for the week. However, what I would like to focus more on is how much better I could have done this week had I followed through with one of my core values.
First off, before getting into an update on my week in our investment game, I should tell you a little bit about my background in “investing.” I have completed the Canadian Securities Course, which is a basic requirement for working in the financial industry in Canada and gives you a small background into various elements of investing. However, outside of that, I have no other real experience most especially in commodities. On the other hand, I do have experience in an industry that I consider to be incredibly similar to the investing that we see here and that is in sports betting. I was not like the majority of betters who would simply select a winner as the most of my bets would be picking teams whose payouts would decrease and then picking the other team whose payouts would increase so as to guarantee myself money before the game ends. Essentially, this is the same as making a long or short position and then closing it as prices (payouts) changed in my favour. I have developed my own set of “core values” that I would follow and I believe that they should be transferable to investing and every week I hope to share them with you.
So enough of my rambling. Let’s get into my idea of being the first to react. In the beginning parts of the week, I saw a little bit of movement up and down in my investments, but I saw the biggest loss on Wednesday when I decided to act upon the news of new austerity measures put out by EU nations, which would theoretically cause prices to fall in commodities market. This would be caused by a downward shift in the demand curve due to cuts in the budgets of the governments. However, I was over 5 hours late to react to the news and by the time I had gotten into the market on short positions in soybeans and wheat, it was too late. In fact, they had both begun to rebound and I lost approximately $1k. However, had I been quicker to react (approximately 1 hour after the news) I would have seen a gain of over $3k.
Want to hear some stories that I have that led to this little value of mine? Then ask me to tell you in the comments!
Cool~ Although the news itself was not cool at all, it’s cool that you actually spot this news and linked it to the commodity market.
Thanks for sharing your background in “investing” too. It sounds very interesting though I don’t quite understand how exactly you guarantee your gain here : “the most of my bets would be picking teams whose payouts would decrease and then picking the other team whose payouts would increase so as to guarantee myself money before the game ends”. Is it a simple logic I am just not getting? mmm..
Well essentially it would be me deciding to pick a team that I highly expect to have their payouts “worsen”. This can come from a number of factors from something during the game (knowing that they will take a lead thus making their payout drop) or something before it even starts (injury to a key player from the other team). Then once the actual payout change occurs, I would select the other team to win thus me holding both positions. By the time the game ends, I win one bet and lose the other, but with a payout of the difference, which is similar to our future’s game.
My example for this is based in tennis where I would find players who would often win their first set relatively more than entire matches. Betting odds for tennis are heavily based on win percentages, but with little information based on whether the 1st set is won by the winner or not. For example there would be a player who would win the 1st set on clay courts in 3 set matches approximately 56% of the time, yet had only won on clay courts 42% of the time in 3 set matches. So, I would bet on him before the match then when the 1st set was won, his opponent’s payouts would increase and I would pick his opponent to win.
I did simplify the actual situation, as there are a bunch of other factors that I account for in each bet, but that should be the gist of it.
Thanks for sharing your experience and strategy. Looking forward to see next posting.