2008 in numbers

Best performing stocks in 2008

  • EBS +413% / Biotechnology
  • STSI +345%/ Cigarettes
  • CRD – B +258% / Business services
  • GAI +245% / Appliances
  • AIPC +224% / Processed and Packaged goods
  • MXC +210% / Independent Oil and Gas
  • DARA +194$ / Biotechnology
  • KIRK +173% / Home Furnishing Store
  • FINL +151% / Apparel Stores
  • GBR +147% / Oil & Gas exploration

Worst performing stock markets in 2008*

  • Iceland -94%
  • Bulgaria -80%
  • Ukraine -73%
  • UAE -72%
  • Serbia -71%
  • Lithuania -71%
  • Romania -70%
  • Slovenia -68%
  • Vietnam -67%
  • Greece -66%

* local currencies valuations
The Island’s crone was crashed and in terms of US dollars, the decline in Iceland’s stock market is 98%. The Dollar gained 4.5% against the Euro in 2008, therefore if the decline in many European markets is measured in USD, it would be steeper. Another fact that needs to be mentioned is that most of people in Eastern European countries don’t invest their money in the stock market. They tend to prefer to use their savings to start their own business, buy a house or just keep them in a bank, which tends to pay 5 to 7% annual interest on one year deposits in euros or dollars.

Best Performing Stock Markets in 2008*

  • Tunisia +10%
  • Costa Rica -4%
  • Morocco -6%
  • Venezuela -9%
  • Botswana -15%
  • Slovakia -19%
  • Lebanon -21%
  • Chile -23%
  • Mexico -25%
  • South Africa -27%

*valuation in local currencies, therefore the table represents nominal growth. If we take the inflation into account, some of the numbers won’t look that encouraging (if one digit negative growth is considered good). Venezuela is “enjoying” an enormous inflation and this trend is expected to continue in the near future. Zimbabwe used to top the list of best performing stock markets (in local currency), but the reason for that is not healthy economic growth, but gigantic hyperinflation. It is not uncommon to see a Zimbabwean to hold a single 500,000,000 banknote in his/her hands (yes with eight zeros behind) and such a banknote is rarely good for even a simple lunch.

Commodities performance in 2008

  • Oil -55%
  • Copper -58%
  • Platinum -42%
  • Natural gas -22%
  • Orange juice -50%
  • Wheat -25%
  • Silver -29%
  • Corn -14%
  • Coffee -29%
  • Gold +5%

Many investors believe that gold was the best performing commodity in 2008, but they are wrong. Cocoa was up more than 60%, as the insatiable people’s demand for chocolate was not easy to met due to poor harvest.

Let’s hope that 2009 will bring better numbers and more reasons to smile in everyone’s house.
Happy New 2009!

The way to learn

Learning to trade is not very different from learning any other discipline. It takes a lot of efforts and finding the right teachers. At some level of experience, the best teacher for you will be you, but before such level is reached having someone to show you the direction of least resistance is priceless.

For example, in his early years, one of the most notorious composers ever –  Mozart, imitated and mimicked the work of others. From their lessons, later in his life, he gradually builds his own unique style. This is a common path to success in music. Common path to success in trading.

In music first you learn the notes. Then you try to replay other guys’ compositions until one day you start to compose in your own unique style. In trading, first you learn the basics of supply and demand, some common market anomalies and basic market psychology. Then you read about other, already successful, people’s methods and try to mimic them until one day you become experienced enough to create your own style of trading that satisfy you financial and personal goals best. These are three different levels of expertese in each field and they should be mastered in the mentioned sequence.

Open your eyes

Seth Godin has an interesting article on finding the one, who can really help you. Very thoughtful and a must read.

“People in charge can rarely help you, because they are rarely (truly) in charge. Billionaires can’t help you, either, because they have their defense force fields on full strength during meetings like this. In fact, the person who can help you the most is almost always someone who doesn’t appear that powerful on the surface.

Remember, it’s not just that they can help you. It’s that they want to help you. Famous people qualify in neither category.

So, who is it? Hint, it’s not the Wizard of Oz or the Pope or Barack Obama. It’s someone not famous, someone who actually makes things happen and someone who actually cares. Think hard… Got it?”

Livermore on irationality

Trying to figure out the “why” of amarket move can often cause great emotional strife. The simple fact is, the market always precedes economic news, it does not react to economic news. The market lives and operates in future time.

Livermore on knowing yourself

It is my conclusion that playing the market is partly an art form, it is not just pure reason. If it were pure reason, then somebody would have figured it out long ago. That’s why I believe every speculator must analyze his own emotions to find out just what stress level he can endure. Every speculator is different, every human psyche is unique, every personality exclusive to an individual. Learn your own emotional limits before attempting to speculate, that is my advice to any one who has ever asked me what makes a successful speculator. If you can’t sleep at night, because of your stock market position than you have gone too far, if this is the case then sell your position down to the sleeping level.

On the other hand, I believe everyone who is intelligent, conscientious and willing to put in the necessary time, can be successful on Wall Street. As long as they realize the market is a business like any other business – they have a good chance to prosper.