50-50

Not going to talk about charts, big pictures and other stuffs today. I rarely use charts unless we have come to critical turning points. A time when it reaches all time high or all time lows. The higher a market goes, the sharper and the faster the market falls. A breakdown of a new low is something I pay attention because when people are giving up hope, they become unpredictable. Other than that, I leave them alone.

I was wondering if people ever consider risk and reward other than thinking of going for a quick flip. It's like going to Jenting casino. I'm going to do the last bet, if I win I will go home. Most people rarely stick to his/her promise and end up going home empty handed with sappy eyes.

I have a quiz question for today:



I assign the targets and probability arbitrary but I think they are right directionally. I cannot understand why people want to take a small pay off of 1-5% for 50-50% chance.

The pay-off is a better at higher targets but the odds are less than 50% in short term(1 year or less). Some may want to challenge me saying I assign low probabilities in the latter scenarios. I am sure many can agree with me that the economic conditions are going to be weaker, 3-6 months from today, why should we then assign higher probabilities for less favourable conditions?

I rather step aside when risk and reward situation is not compelling. Why risk our money for a small gain but with larger downside potential?