Category: avoidIt

Why I am skeptical about investing in “global trends”

Investing in a "globaly demanded" product or service seems (at first glance) to be a nice idea. However, it may be (too) dangerous: not all global trends turn into profit and even if they do, you need to get in early since most of global trends (even genuine) turn into bubbles and do burst. 

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Warum Sie äußerst vorsichtig beim Immobilienkauf sein müssen

Steigende Zinsen koenen die Hauspreise kippenZinsänderungsrisiko ist aktuell so hoch wie noch nie! Die Kredite sind wegen extrem niedriger Zinsen zwar günstig geworden, aber die starke Nachfrage trieb die Immobilienpreise so hoch, dass barwertig gesehen, ist der Erwerb einer Immobilie doch teuerer geworden. Und wenn Sie dazu Ihre Immobilie nicht auf einmal, sondern mit dem Anschlusskredit finanzieren, kann die Restschuld für Sie sehr teuer werden. Selber Schuld, wenn Sie Ihre Risiken nicht nachkalkulieren (letYourMoneyGrow.com hilft Ihnen gerne bei Kalkulation).

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Mystery and misery of the martingale betting system: why it will not make you rich

Summary:

  • The martingale strategy asymptotically implies infinite capital or infinitely divisible stake. In reality you have a limited capital and there is a lower (in casino also an upper) bound of the stake.
  • In a fair game (with 50/50 chance of profit and loss) the probability of profit after a series of losses is still 50% (because the outcomes of bets or trades are independent from each other).
  • Typically, if you win then your profits are moderate but if you lose, the losses are severe (you can lose your capital just after a small series of unlucky bets).
  • If you make pretty many bets, you might make a good profit but the probability to make profit at all decreases with the number of bets. Losses stays severe.

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Binary Options: you may earn in a short term but eventually you WILL lose

Summary: 

  • Gambling with binary options you either lose 100% or earn about 90% of your stake. The win lose/ratio of 90/100 = 0.9 is worse than by the European roulette (36/37 = 0.973) and even by American roulette (36/38 = 0.947).
  • A trade takes just a couple of minutes, which allows (and implicitly encourages) you to commit a lot of trades. Due to the law of large numbers and negative odds, the more you trade, the more you lose.
  • Don't trust numerous "success stories" in Internet. Virtually all of them are fake and they are just a marketing trick of brokers or those who earn with brokers' affiliate programs.

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