investor Archives - MKTPlace

Could FINRA Finally Help Finance Companies Market On Social Media?

Market Place — Tue, 25 Nov 2014 07:04:06 +0000

Businesses that offer financial services to its customers have long been trying to dominate the social media channel. With a gargantuan-sized audience, finance companies are trying to connect with their customers more than ever and on a more personal level. However, without the help and/or approval of the Financial Industry Regulatory Authority (FINRA), they will not get far.

But with all the efforts FINRA has publicized, could they be the answer to simplifying social media marketing for finance companies, or complicate them? This article takes a look at FINRA’s efforts in the field for well over a decade and a half, and how it is translating for finance companies.

FINRA Can’t Regulate Loose Rules

While FINRA has provided a substantial amount of regulations and rules to companies offering financial services, the problem is many of these rules can be bypassed relatively easily. For example, when a social media ad is posted, aimed at promoting a service, finance companies are required to state a warning for it. However, this warning can be written or integrated in a picture, often small. As such, regulating loose rules can be rather difficult.

As such, while FINRA can help finance companies market their services better, they will need to overcome regulatory problems in order to do so, and that may not happen within the next 5 years.

Creativity and Personalization May Not Be Possible

For social media to thrive, a company needs to personalize its posts in order to both cater to its customers’ needs and preferences, and stand out from its competition. However, finance companies are rather limited on the posts they or their agents can make, often relying on pre-approved messages. This not only inhibits creativity but limits the messages they can send. By putting proper guidelines into place, FINRA will be able to enable more personalized messages to be created, allowing finance companies to be creative with their messages.

Measuring Your ROI – Still As Complex As Ever

For numerous departments, such as marketing and especially human resources, measuring ROI is not as simple as it may seem. When it comes to social media, measuring your ROI becomes a rather difficult task. Identifying the base factor, likes, comments, shares, and direct messages leading to purchases, can be simple but using them to identify ROI is difficult. With many finance companies worrying about current regulatory and compliance issues, real challenges may be overshadowed by a mediocre one. However, if FINRA does well in putting transparent rules in place quickly, it may shed light on ROI methods.

FINRA has been working tirelessly to help finance companies market their services better on social media channels. Unfortunately, their momentum is rather low and it seems they may not make much headway soon. However, once they do, FINRA could help improve the future of social media marketing for finance companies. Until then, it seems FINRA will not be able to do much for these companies.

Market Place

MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.

Trader Personality: Jim Rogers

Market Place — Fri, 26 Sep 2014 06:00:28 +0000

Which trader doesn’t dream of making millions and conveniently retire at the age of 30? Surely, it is every investor’s sole purpose and their dream. But for market guru and legend Jim Rogers, a commodities trader, it was just the dawn of an illustrious career on Wall Street that has lasted for over 60 years and has helped him make millions of dollars.

Jim Rogers amassed his wealth and grew his business empire using his phenomenal ability to monitor and pinpoint long-term trends long before anyone else could which blissfully ended up building him a reputation as a sharp contrarian. Rogers retired at the age of 38 to pursue his love of motorbike riding around the globe, and since his retirement he has also been a treasured guest professor of finance at Columbia Business School.

Rogers is known for the huge gains in commodity he made back in the early 2000’s, but he really became a living legend after correctly forecasting the collapse of the housing market, ending up making millions.

A Look into the Early Life of the Rogers

Rogers always had a fondness or affinity rather, for business, beginning from an early age. In fact, Rogers first started stepping on the trading floor in the financial world at the age of 5 and used to sell peanuts and gather empty bottles that were left behind by baseball fans in Alabama. Rogers graduated from Yale University back in 1964 and has a Bachelor’s degree in history. After his studies, he went on working as an investment banker on Wall Street which eventually led him to meeting another billionaire stock market legend, George Soros.

It was him and Soros that founded the exceptional Quantum Fund in 1973 which made a stupendous amount of money in its first 10 years, enjoying up to 4200% in returns. His early success allowed him to retire earlier than most traders. But that wasn’t the end of his career. Rogers still trades as a private trader and an astute investor, securing massive gains on the way. Moreover, he is also the author of the book “Investment Biker”, published in 1990, and is about his trip around the world on his motorbike.

Rogers’ Investment Methodologies and Massive Gains

Rogers has a timely approach to investing and employs a top-down model when analyzing the economy, which according to him is instrumental in guiding his investment methods and style. Rogers also said he has never been able to time the markets. So, instead he has adopted a long-term approach to investing.

Jim is a popular contrarian investor and his eagerness and assertiveness has led him to always go against the tide of the buck and grain and has allowed him to form some diligent ideas. He is also well-known for his ability to spot particularly long-term trends faster than any other trader or investor. After being instrumental in the success of Quantum Fund in the early 70’s and 80’s, he was able to call the commodities boom a decade later allowing him to establish the Rogers International Commodity Index in 1998 before the boom of the commodities market in the 2000’s.

The key feature in the way Rogers invests and trades is nothing but patience. Irrespective of whether he was predicting the early boom of the commodities market in the 2000’s or shorting the market in the 2008 stock market collapse, he has always focused on being patient and has emphasized its importance to follow through a successful investment. To sum it all up, this is what Jim Rogers said about being patient in the market, “I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up. I do nothing in the meantime.”

Jim Roger’s Investment Portfolio: What Does He Hold Now?

Rogers has his target set on what he believes to be the greatest of all opportunities that happened to have landed on his lap: the food and agriculture industry. He is also big on bullish commodities and analyzes that the ceasing process of the central bank will sustain hard assets. He also invests in precious metals like gold and silver and is particularly fond of these metals. Back in 2011, he mentioned that in 1987, gold and silver stock fluctuated from 40% to 80%, but compared to what’s going to happen now, that era seems like a blip.

In 2007, Rogers moved to Singapore with his family to further take advantage of the growth of the nation’s economy. Rogers even started his the Rogers Global Resources Equity Index, an index primarily designed to capitalize on the most liquid companies pertaining to agriculture, mining and metals and alternative energy industries in 2011.

Market Place

Top 10 Successful Traders Ever

Market Place — Thu, 25 Sep 2014 06:00:38 +0000

There are a number of fundamental differences between a trader and an investor. The only similarity they may share is that both investors and traders can lose money just as easily as they make it. We can learn from the successful traders.

To start trading though, you don’t need an investment or apply for a loan. You’d be surprised to know some of the world’s most brilliant and legendary traders themselves went through a lot of trial and tribulations before they became what they are today and before their names were immortalized in the history of trading.

Mentioned below are the names of the top successful traders who managed to beat others in the market through their skill, their diligence, tenacity and instincts. So, get ready to get some inspiration.

Top Ten Successful Traders of the World

1. Jesse Livermore – The Master of Speculation

The skill of speculation that Jesse possessed thrived when he accurately predicted the 1929 stock market collapse. Livermore began trading as a 15-year old, trading at various gambling houses and through his studies and research he rose to fame and power when forecasted the 1907 and the 1929 markets collapses and made $100 million (which in today’s terms amounts up to $6 billion), in the blink of an eye. Having been associated with various industrialists at the time, Jesse proved to be instrumental in contributing towards America’s industrial revolution.

2. Paul Tudor Jones – Understanding the Core Dynamics of Trading

Paul Tudor Jones, another trading genius, called on the 1987 stock market crash because of that the day became labelled as Black Monday. Tudor accurately predicted the fall of the market by recognizing and understanding a series of events that led him to success. He understood at the time if the market started to descend rather than dry up, selling in the market would actually cascade. Jones understood an overvalued market would definitely give birth to more selling. Gambling on this, Paul went on making $100 million faster than you could say ‘I want to be rich!’

3. George Soros – Defeating the Bank of England

As if this man needs any introduction at all, George Soros is the trader who broke the Bank of England without breaking a sweat. He predicted that the pound was going to fall and shorted it, making an easy $1 billion. Although many other traders deemed this gamble as nothing short of reckless, Soros was pleased about it. Well, of course, he would be. It was a ridiculously rewarding gamble! George forced the Bank of England to withdraw from the ERM (European Exchange Rate Mechanism).

4. John Templeton – Betting on Japanese Assets and Winning

Templeton was the master of mutual funds. He invested $100,000 in Japanese assets when Japan was undergoing an economic change for the better, Templeton ended up making $55 million on a $100,000 investment. And in 1999, when Japan was starting to achieve it economic goals, Templeton decided to invest 60% of his funds into Japanese assets, which was again a spectacular success.

5. Andrew Hall – Predicting the Oil Prices

In 2003, a barrel of oil was traded at $30. At the time, Andrew Hall predicted the price per barrel of oil is going to reach $100 within the next 5 years. Turned out his gamble was spot-on. He worked for Citigroup, making a ton of money for his employer. The trader made about $100 million.

6. Paul Rotter – The Master Flipper

An expert in gauging the market’s psychology, his techniques were impeccable and significantly aided him in becoming a master of the markets. Paul being the initiator, his ideas and strategies proved to be instrumental in conducting trades on the Eurex exchange (Bund, Bobl and Schatz) markets.

7. John Paulson – Shorting Real Estate

John Paulson is known for successfully executing what is known as the ‘greatest trade ever’. Paulson accurately predicted the asset bubble in the real estate market which had the potential for bringing in billions of dollars into Wall Street. Paulson ended up making $15 billion for his employers in 2007 for which he got a dizzying $3.7 billion.

8. Jim Chanos – The Perceptive Short Seller

Jim Chanos rose to fame in October 2001 shortly after the downfall of Enron. Chanos was a master when it coming to shorting trades and made heavy profits by selling commodity currency and security. His most popular shorts include Baldwin-United and as of late, homebuilders like KB Home.

9. Louis Bacon – The Gamble on Geopolitical Factors

Bacon is one of successful traders and ended up rightly predicting that Saddam Hussein would invade Kuwait. Just a year after that, he also predicted and gambled on the fact that the US would defeat Iraq when the oil markets were beginning to recover. He was a master at trading using geopolitical motivators and aspects and has made a lot of money doing so.

10. David Tepper – Investing Money in Diminishing Assets

The last on the list, another successful traders is Tepper has a record for investing in distressed assets and has made a lot of money doing so. He predicted the Bank of America along with Citigroup will not be nationalized and he made a fortune. David bought extremely depreciated shares and saw them grow tremendously in value towards the end of 2009.

So, these are the best traders you can learn from and be inspired by.

Market Place

The Best Traders Alive

Market Place — Tue, 23 Sep 2014 06:00:26 +0000

While it is true that investors trade to make money, a trade, strictly in technical terms, does not necessarily have to be an investment in anything. Let’s consider the best traders alive. Do you know why? The answer to this question lies in the explanation of value investing given by Benjamin Graham, who is known to be the father of all value investment and movements. According to Benjamin Graham, an investment should always guarantee one thing, and that is the “safety of principal and a lucrative return”. In light of this information, the difference between a ‘trader’ and an ‘investor’ becomes significantly clear.

An investor takes their time to put in their money, and is in the habit of making informed and diligent decisions after a thorough evaluation of a particular set of business fundamentals of a specific company or organization. A trader, on the other hand, applies the use of careful evaluation and technical analysis to focus on the core aspects of the trading market, and then bets on which of them have the potential to provide a hefty profit with limited market volatility.

Exactly fourteen years ago, it was very common for people to terminate their employment, get the cash out of their 401k plan and start down the line of trading, and that too from the ease of their homes. Fuelled by a large and volatile stock market with real estate bubbles, it was easy to throw away investments, but it was easy to make money as well. However, things have changed over the past couple of years. The recession that crippled the economy in 2007, for example, also resulted in the consistent proliferation of financial regulations.

Moreover, who can ignore the significant advancements in technology which allow trading to be carried out by powerful software and sophisticated algorithms. Did you know that today, 50% to 70% of all trading is done through complex algorithms every given day?

Losing money in today’s financial markets is routine and there are many traders and investors who lose massive amounts of money in the span of a single trading day. On top of this, these traders hope their gains will fill in for the losses they have experienced. And in order to gain more money, traders have to incur substantial expenses to pay for rising transaction and trading costs, and to pay for keeping up with traders who use state of the art trading software and platforms.

With all of this being said, there is still a selective number of traders who possess the diligence, the grit, the boldness, and the heart to go against the odds and make money along the way. Here are a few of those people:

Paul Tudor Jones (1954-Present)

Paul Tudor Jones is the founder of the Tudor Investment Corporation, which consists of a $12 billion hedge fund. Tudor is famous for short selling his stocks in the 1987 stock market crash which ended up making him $100 million. He did this by predicting a massive multiplier effect on the portfolio insurance on the bear market.

Portfolio insurance is a risk management instrument popularly used by traders around the world. Investors and traders use portfolio insurance to reduce the investment risks which could threaten their portfolio. Jones’ brilliant analytical insight led to this prediction which in turn helped him become a very rich trader in 1987. He has an estimated net worth of $3.6 billion and still heads his own hedge fund.

George Soros (1930-Present)

Soros is by far the most popular trader of all time. In fact, he is known as “The Man Who Broke the Bank of England”. George Soros made a well calculated bet in 1992 that the British pound would deflate in value. The British pound at that time was on an ERM – the European Exchange Rate Mechanism – which was introduced to keep the currencies held together in a defined boundary to maximize financial stability. George Soros, along with his partners from the Quantum Investment Fund, found a pattern which led him to believe the pound would become weak and thus would not be able to survive in the ERM.

He then made a short position, borrowed a substantial amount of money from the fund, and made $1 billion.

John Paulson (1955-Present)

John Paulson is renowned for carrying out what is known as the ‘greatest trade ever’. Paulson became a wealthy trader in 2007, when he shorted the real estate market via the collateralized-debt market. He was the founding member of Paulson & Co., which was established in 1994. Although being a brilliant trader, Paulson was not very popular in Wall Street, at least not until the crippling of the economy in 2007.

John Paulson

Successfully forecasting a massive asset bubble in the real estate market, he helped his funds make a massive $15 billion, out which he got a cool $3.7 billion. Paul still manages his companies and is worth an estimated $11 billion.

Come to think of it, all three super traders shared one thing in common: each of their brilliant and high paying ideas was based on leveraged shorts. What does that tell you? It tells you that all traders have clear conflicts of interest, and each trader is motivated to make profits from a fluctuating market.

Market Place