George Soros is a trend follower

Let's make money: trend followers

Why shareholders should now deal intensively with trend followers and why fund construction is important with gold.

You don't often see such price jumps as in the past eight days in an investor's life: a thousand Dow points down in a few minutes and then (almost) back again within a short time - that is where any predictability comes to an end. Apart from these (still not resolved) weirdnesses, the extreme volatility also shows the equally extreme nervousness of investors: every small price gain is immediately used to take profits. Which quickly drives the prices down again - and creates new entry opportunities that are used again immediately. A nightmare for the classic type of investor who puts stocks with a multi-year investment horizon in their custody accounts (and has therefore probably not really gained in the last 15 years). But a dream for investors who have learned to “ride” short-term waves - even if that has lately degenerated into a kind of extended “day trading”.

So it really pays to deal intensively with trend-following indicators and their short-term applications. And apply them too. This has made it possible to “skim off” the strongly fluctuating “Presse am Sonntag” recommendations of recent times such as Veeco, Cree,, Baidu etc. Basic conditions are, of course, fast trading via an internet broker, adherence to strict limits for both buying and selling, and the relatively intensive preoccupation with price developments.

If that is too tedious or too complicated for you, you will not have much fun in the stock market at the moment. As a rule of thumb, surfing the waves (despite the higher fees) is currently more fun on the US stock exchanges than in Europe. Practically speaking, the fall in the euro still leverages profits on a euro basis a little (or dampens losses if something has been overlooked). By the way, on Friday the stock exchanges were heading south again - to where the entry prices are.

During this time, investors with a short-term orientation could once again look around in growth regions that have recently moved a bit out of the focus of local investors. China, for example. A paper with a somewhat strange name has caused a sensation in the past few days: After it became known that the legendary investor George Soros had invested on a larger scale, the share of the Chinese search engine operator listed in Hong Kong did KYG017171003) a real jump. The paper has risen by a quarter in a short time, but it still has enough potential.

If we are in Hong Kong at the moment, take a look at the biotech company Sino Biosphere(ISIN KYG816W1380). One downer is, of course, that the China paper jumped 25 percent after the results were presented on Thursday. And: Both China stocks are considered "hot stocks" with very high price potential, but also high risk. So not for the faint of heart.

Gold continues to shine in full splendor - especially on a euro basis. Last week's tip, however, has a flaw: Xetra Gold(ISIN DE000A0S9GB0) is backed by stocks of physical gold (which can also be delivered if necessary), but is not, as erroneously reported here, an ETF (Exchange Traded Fund), but an ETC (Exchange Traded Commodity) - and as a such no special fund. In the event of the issuer's insolvency (in this case Deutsche Börse AG), the metal is gone.

If you want to exclude the issuer risk, you have to make sure that your bars are managed as a special fund, even if you never see them. This is the case with ETFs (such as the ZBK gold of Zürcher Kantonalbank, ISIN CH0024391002) is the case. Or also at physical gold - which can also be easily traded with some direct banks. With the internet broker, for example, you can buy gold bars like stocks over the internet. The bars are kept as a special fund in a Swiss bank vault. If you want, you can also have the precious metal delivered. However, this is then associated with higher expenses.

[email protected]

("Die Presse", print edition, May 16, 2010)