Newport Beach top wealth center among U.S. cities

23. Feb. 2010

NEW YORK - Newport Beach, California has been rated the top wealth center among U.S. communities in a new listing by the business news website Portfolio.com.

Newton, Massachusetts, which is near Boston, came in second in the survey, followed by Pleasanton in California, Arlington in Virginia and Santa Monica in California.

San Francisco, which trailed behind in eighth position, was the largest city in the survey that looked at high household incomes of more than $200,000 and expensive homes exceeding $1 million.

"The findings ... are based on a six-part formula to assess relative influence. The analysis of U.S. Census Bureau's 2008 American Community Survey focuses on 420 cities, incorporated towns and unincorporated urban areas with populations above 75,000," the website said in a statement.

California had six cities listed in the top 10. Mountain View and Thousand Oaks, captured the sixth and seventh places. Sunnyvale trailed closely behind at 10, while Sandy Springs in Georgia ranked ninth.

Newport Beach had a wealth score of 22.7 and 28.6 percent of households with incomes of $200,000.

Reading, Pennsylvania came in last in the list. Camden in New Jersey, Flint in Michigan and Brownsville, Texas were also at the bottom of the pack, along with Detroit and Gary, Indiana.
[Reuters]

Money means more to people since financial crisis

23. Feb. 2010

NEW YORK - As the saying goes, money isn't everything, but it certainly means more to people now than before the global financial crisis, and especially in China, Japan and South Korea, according to a Reuters/Ipsos poll.

A survey in 23 countries found two-thirds of 24,000 people questioned, or 65 percent, agreed money was more important to them now than previously, with younger people particularly putting more emphasis on money and seeing it as a sign of success.

Citizens of South Korea, Japan and China were the most likely to say money meant more to them now, with 84 percent in each putting more value on cash, followed by India with 78 percent.

People in these countries were also more likely to believe that money was the best sign of a person's success with 69 percent of Chinese and South Koreans linking money to success, followed by India and Japan at 67 percent and 63 percent.

On average only four in 10 people questioned, or 43 percent, thought money was the best sign of a person's success with seven out of every 10 Canadians, or 73 percent, disagreeing that money was the best sign of success, followed by Sweden, Mexico and the Netherlands.

"Perhaps not surprisingly, those nations (saying money was more important now) directly correlate with those who put the greatest weight in money as a determinant of success," said John Wright, a senior vice president at opinion research firm Ipsos.

"With only a few exceptions, we can clearly see the subtle but incredible gulf between the two groups: the value of money and success compared to the values because of money and success."

Men and women were evenly divided on the importance of money with 65 percent of men and 64 percent of women agreeing money was more important now while more men than women, 47 percent to 40 percent, were likely to say money was the sign of success.

Younger people were more likely to put more emphasis on money with 71 percent of those aged under 35 saying it was more important now compared to 61 percent of people aged 35-54 and 52 percent of people aged 55 or over.

People aged under 35 were also likely to see money as the sign of a person's success with 48 percent believing that statement compared to 40 percent of people aged 35-54 and 35 percent of those aged 55 and over.

Income made little difference to these opinions.

The countries where citizens were least likely to say that money was more important now than previously were the Netherlands at 50 percent, Mexico, Germany, Britain, Belgium and Canada.

The following results table from the survey conducted between November and January begins with countries where citizens were most likely to agree that "money is more important to me nowadays than previously." All figures are percentages:

Money more important Sign of success

Agree Disagree Agree Disagree

South Korea 84 16 69 31

Japan 84 16 63 37

China 84 16 69 31

India 78 22 67 33

Russia 72 28 55 45

Turkey 71 29 61 39

Brazil 70 30 48 52

Australia 68 32 34 66

Argentina 67 33 30 70

Spain 65 35 43 57

Czech Republic 64 36 36 64

Poland 63 37 44 56

United States 62 38 33 67

Italy 60 40 51 49

France 60 40 32 68

Hungary 58 42 47 53

Belgium 57 43 34 66

Canada 57 43 27 73

Britain 56 44 33 67

Sweden 55 45 28 72

Germany 54 46 33 67

Mexico 52 48 28 72

Netherlands 50 50 29 71

About 1,000 individuals participated on a country by country basis via an Ipsos (www.ipsos.com) online panel with weighting employed to balance demographics and ensure that the sample's composition reflected that of the adult population according to the most recent country census data.
[Reuters]

Gold and S&P 500 psychology: they bail, we buy

9. February. 2010
Stockhouse (by: Chris Vermeulen)

** Successful traders  trade against the prevailing market sentiment **
 Understanding market psychology is crucial for a trader’s success. But so many people get caught up in the daily market volatility, media coverage and “noise” of the trading environment, it’s almost impossible to not think and trade in agreement with the majority of traders.

 However, effective technical analysis allows us to use trends, patterns and other indicators to evaluate the market's current psychological state. Fortunately, this analysis can both enable us to independently forecast whether the market is heading in an upward or downward trend and do so against the grain of the majority.

 It takes a disciplined trader to be able to watch and listen to the market doing one thing, filter out the noise, then do the opposite - all in a controlled manor. To this day I still find myself fighting the herd mentality at times and that is when I step away from the computer and regroup.

 I have a simple rule that has saved me thousands over the years. I would rather miss a trade and learn what caused me to get confused, then to take a loss.

 Rule # 1 - when in doubt, stay out!

 There are two types of traders:

 Herd Mentality Trader – Someone who trades off fear and greed buying near tops and panic selling out at the bottom with the masses.

 Black Sheep Trader – A trader who stands apart from the masses and trades opposite to the herd during extreme levels.

 Last week’s market action really allowed us to see which way the masses were moving. The extremely high selling volume and sharp price decline notified us that the market was trading off FEAR. And, last Thursday we actually saw PANIC which tells us the balance of the market (retail investors, John Does, the “Herd”) were exiting their positions.

 When we see this happen, it’s generally a good time to start scaling into long positions, as most of the down side has already happened.

 I have been talking about an ABC retrace pattern for the indexes and gold for some time and last week we got just that. An ABC retrace is when we have three waves which are: down, small up, then another leg down.

 In short this wave breaks the uptrend of higher highs and lows, as it forms a lower low telling novice traders to sell and go short. This is what causes the high volume and sharp sell offs.

 Below are a few charts showing the 2009 July lows and where we are now: February 2010:

S&P 500 – daily trading chart

S&P 500 – daily trading chart

S&P 500 – daily trading chart

S&P 500 – daily trading chart

 Intraday Price Action – If you want to see some exciting intraday trading charts check out the setups last week.

 Market psychology trading conclusion:
Most get involved with the stock market because it looks like something they can quickly learn and start making money from home. But it doesn’t take long before they quickly realize there is more to trading than meets the eye.

 While trading looks easy from a glance, in actuality I think it’s one of the toughest jobs out there.

 Why? Well, this is what you are up against:
 You are trying to predict something that is unpredictable.
 You are trading against millions of other highly skilled traders.
 You are trading against automated computers using complex algorithms .
 You are trading with your hard earned money which causes fear and greed.
 You must accept losing trades as that is part of the business.
 You must trade with a proven trading strategy and follow the system.
 You must understand money management and apply it to every trade.
 You must truly love the market because it will break you down mentally .

I don’t want to say you must be a contrarian, but in reality you must do the opposite of the masses during times of extreme price behavior.

 These extremes happen on a daily basis when trading intraday charts and every 4-6 weeks when looking at daily charts. The toughest part is to pull the trigger when emotions are flying high in the market and you are looking to do the opposite. It takes several trades before you even start to get comfortable doing this.

 I hope this helps shed some light on market psychology.

 If you would like to receive my Trading Newsletter and Analysis please visit my website: http://www.goldandoilguy.com/

Why it is so scary to lose money? (Study)

9. February. 2010
Reuters

People are afraid to lose money and an unusual study released on Monday explains why -- the brain's fear center controls the response to a gamble.

The study of two women with brain lesions that made them unafraid to lose on a gamble showed the amygdala, the brain's fear center, activates at the very thought of losing money.

The finding, reported in the Proceedings of the National Academy of Sciences, offers insight into economic behavior and suggests that humans evolved to be cautious about the prospects of losing food or other valued possessions.

Benedetto De Martinoa of the California Institute of Technology in Pasadena and University College of London and colleagues were studying why people will turn down gambles that are likely to lead to gain.

"Laboratory and field evidence suggests that people often avoid risks with losses even when they might earn a substantially larger gain, a behavioral preference termed 'loss aversion'," they wrote.

"For instance, people will avoid gambles in which they are equally likely to either lose $10 or win $15, even though the expected value of the gamble is positive ($2.50)."

They studied two women with a rare genetic condition called Urbach-Wiethe disease, which damages the amygdala, the almond-shaped center in the brain that controls fear and certain other acute emotions.

The researchers compared the women's responses to 12 people with undamaged brains. They noted this kind of study usually involves only a few people as it is not possible or ethical to deliberately damage a person's brain to see what happens.

The volunteers were asked to make gambles in which there was an equal probability they would win $20 or lose $5 (a risk most people will take) -- or would win or lose $20 (one most people will reject).

The two patients with damaged amygdalas fearlessly risked a $50 pot.

"We think this shows that the amygdala is critical for triggering a sense of caution toward making gambles in which you might lose," Colin Camerera of University College London, who worked in the study, said in a statement.

"A fully functioning amygdala appears to make us more cautious," added his colleague Ralph Adolphs. "We already know that the amygdala is involved in processing fear, and it also appears to make us 'afraid' to risk losing money."

The study could also help researchers understand why some people are more willing to take risks than others. Perhaps genetic differences in the DNA activated in the amygdala explain it, the researchers said.