Trading and Investing

I'm fascinated by the global financial markets. This fascination began during my finance studies in college and it's the main reason why I ended up working in the finance industry for nearly 10 years. Lately my fascination has grown into a mixture of astonishment and horror. I find it amazing that the global financial system still holds together and that it hasn't already crumbled apart.

It's always good to come out clean right away: I have a strong bearish bias and I think the financial markets are broken in the sense that little else matters except central bank policies. Buy-and-hold as an investment strategy is more or less dead, except in the very long-term. Today it's almost impossible to be a successful macro investor. High frequency trading (a.k.a. HFT, algorithmic, or robotic trading) is in its current form more disruptive than beneficial to the markets. Volatility in the various asset classes is here to stay.  

Having confessed all of that I guess I should come up with some clarifications and explanations – and that's what my trading and investing blog is all about. In the blog posts if I ever make a claim or prediction, I'll be sure to back it up with reasoning and references.

Sadly, to my knowledge there are only a few ways to earn a decent return on invested capital, if you don't want to wait over 20 years. This is, of course, according to my personal risk tolerance. Others with a different approach to risk may have a completely different list.

The first way is to buy and rent apartments ("buy-to-let"), which I’ve done to some extent in Helsinki Finland. This has become increasingly hard over the years due to real-estate prices and competition.

The second way is to buy and take over a good existing business (which already has decent cash flow) and then develop it further. Hotel Villa Maija is an example of this. I wish I'd have the capital, know-how, and time to do more of this.

The third way is venture capital investing through a fund, which has a crystal clear investment focus, a strong team, and proprietary deal-flow through clear differentiation and unique background.

The final way is trading, which I actually don't consider to be a form of investing, but nevertheless it involves obtaining the necessary capital, putting it at risk, and hopefully earning a decent return. More specifically, I’m talking about trading either in the short term ("swing trading") or trading in the very short term ("day trading"). I’ve done both and almost never in single stocks or commodities, but instead in broader equity indexes.