Friday, October 29, 2010

Traders Forum, Toronto Money Show 2010

The moderator of this forum was Fasusto Pugliese of Cyber Trading University. On the panel was Sam Abtahi of Royal4X, Colin Cieszynski of CMC Markets Canada and Tyler Bollhorn of Stockscores.

The first to speak was Abtahi and he said that companies stock prices (producers) do not move with commodities prices. This is what is called a company risk. He thinks that we show be buying commodities, not commodity companies. To start off in commodities trading, he thinks it is wise of start with ETFs on commodities and then move into commodity futures. These commodities future markets are 24 hours markets, compared to the limited time the stock markets are open. Currently, the Canadian Government is starting to limit leverage in the commodity futures market. The leverage allowed used to be 100 to 1 and it is down to 30 to 1. By this action, the government is trying to protect the public.

Cieszynski talked about QE2 (quantitative easing). He said that the US’s problems are structural, not liquidity. (If you remember what QE is, it is basically a way to print money.) As far as QE is concerned, Japan is doing it, the US says they will do a QE2 and England is also looking at doing some QE. In China, they are doing some economic tightening (rising interest rates) and Canada is currently keeping their interest rate at the same level. He thinks that if the US does QE2, then the stock market might go down.

Bollhorn stated that the stock market is not fair. The market is being manipulated by people who want it to go higher. He said that sometimes there are advantages to being a small trader. They can buy and sell and have no effect on the market. In fact, he said that trades of $1M or $10M have virtually no effect on the market. When Hedge funds buy and sell, they have a harder time as they usually are trading in amounts of $1B or more.

Cieszynski closed this session with remarks on a possible double dip. He said that it probably would not happen. He said that the US is a very dynamic country and it is a lot more dynamic that a lot of other countries. But, he does see some low growth again for the US rather than a double dip. He also said that he does not think that QE2 will be huge.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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