It needs some knowledge to understand this post, https://en.wikipedia.org/wiki/Zhuge_Liang
About two thousand years ago, Zhuge Liang, the famous military advisor, twice predicted weather forecast, and each time it was concerning critical situation. Once was during Red Cliff Wars, while everything was ready but only due to wind from eastern side. Zhuge Liang successfully predicted after three months there would come wind from south-east side, which helped to defeat Cao Cao and set up the situation with three main kingdoms.
The other case was at ShangFang Valley, Wei Yan, one general, successfully deceived SiMa Yi and his sons into an encirclement with raging fire. SiMa Yi and his sons were about to die. But suddenly, there was heavy rain pouring down and put the fire down. Therefore, SiMa Yi and his sons succeeded to escape finally. This made Zhuge Liang regret the rest of his life.
Even Zhuge Liang such a superman who can predicted correctly weather three months beforehand, but he couldn’t predict the weather after a few minutes. Why? Because weather is difficult to predict and uncertainties can happen any time. Even if with supercomputer we can’t predict real-time weather changes.
Weather forecast for a longer term is just as same as forecasting four seasons, namely Spring, Summer, Autumn and Winter, with strong regularity and repeatability. Every person with normal intelligence would know seasons’ alternatives.
Predicting real-time weather is another story. Within one single day, weather could vary very much. One part of cloud could bring some rain, but then a gust of wind may possibly blow away the cloud in the sky. In the morning sun shines but at noon heavy rain may pour.
Weather is like stocks prices, changing constantly as time goes on and on. According to historical records, we could get the average temperature around the whole year. The general trend is that temperature rises from the coldest in the winter, till summer to reach the warmest. Then temperature starts to fall, till the coldest again in the next winter. This is exactly as same as the alternating between bear market and bull market.
Real-time temperature is another story. Temperature one hour later could be higher but also could be lower than one hour earlier.
Temperature within a few minutes is constantly varying and we can hardly predict which direction temperature is changing to.
Long-term investment is as that we predict the temperature for four seasons. We could follow the process wave from the lowest to highest, then from highest to lowest. Different stocks are like corn,
wheat, soybean and apple, etc. Some may get a bumper harvest, but some may not get good harvest. This year’s harvest is good, however, which doesn’t mean next year’s harvest is good again.
Short-term, or daily trading investment is as that we predict real-time temperature. Every cloud may influence the temperature at that moment, and every wind may as well. The storm happening far away may also make effects, which is really hard to estimate for the extend of the influence it may cause. This is the difficulty of the short-term investment.
Short-term investment means frequently buying and selling. Commission fee is one of the factor affecting earnings. Please refer to “Two reasons cause individual investors lose money”.
Investment should have enough safety margin. Short-term investment safety margin is too limited, which is not suitable for most people. Therefore, please think over about Zhuge Liang before planning short-term investment. If do not have skills, you’d better not to take short-term investment!
Image source: https://commons.wikimedia.org/wiki/File:Zhuge_Liang_in_Beijing_opera.JPG