Tuesday, December 16, 2008
Was at my usual Saturday afternoon wine tasting this past weekend; the establishment dropped the admission price by 50% for the last tasting of the year and 3 times more than the usual number of people attended. It was more crowded at the tasting than at the shopping mall. Says something about free markets don't it?
Learned years ago that pricing makes a big difference and that you can over price as well as under price things with the same results. Items in either category won't sell. People always want to pay what they feel the things are worth. I think it's the same for stocks. Priced too high people stop buying it drops too low, they get worried about the worth of the equity and they don't buy. Priced just right and they can't get enough until .. well you know how it goes. Says something for free markets don't it?
Also learned that people like to shop around and feel they've done their research that way before buying. Makes them feel better about the purchase they make. I think it will play big under current economic times. Imagine if all prices were regulated which would take the play out of the purchase. Would not be fun for merchant nor customer because consumerism would diminish, world markets would slow, shopping would become mundane and done mostly when necessary further reducing variety of merchandise and therefore choice. Economies would fall, unemployment would rise, innovation would slow. Sounds like what's happening in Venezuela, what happened in Cuba etc. etc. Says something for free markets don't it?
The horse and buggy market is not at the top of it's earnings heyday either, wonder if in today's world, would they have been entitled to a government bailout? Do you think the automobile's success would have been postponed as a result perhaps? Says something for free markets don't it?
At least 3 major airlines went into chapter 11 bankruptcy; UAL twice I believe, AMR and DL yet they are all still flying and competing. (I will comment about their customer service some other time because that certainly needs a bailout.) Knowing what they have been going through for the past 30 years, since deregulation, it's a wonder so many have survived. Actually it was predicted that only 3 would survive: TWA, Pan Am and UAL. Says something for free markets don't it?
So my final thought is: Stop clamoring for government intervention, regulation to save your a$$ets and then maybe sooner than you think, markets will right themselves again, companies will do what's necessary to survive, the ones that can't or won't will and should be out of business. And that's exactly how free markets work.
Thursday, November 20, 2008
Besides the current examples of Congressional hearings about GM, financial bailouts, and Paulson, we've been breathlessly waiting for numbers on unemployment, housing starts, housing sales, interest rate hikes/reductions, oil reserves, oil outputs, OPEC price decisions, GDP information, etc. etc. etc. ad nauseum; something for every day of the week only to be constantly analyzed, and repeated by the news media based on the numbers and pegging each indicator to each tic, and regardless of accuracy or not, being held as gospel. Did we bring it on ourselves?
I remember a time when company earnings, valuations, book value and p/e ratio was more important. It seems to me that the very availability of having instant information made us into a bunch on knee jerk traders and investors. The media was more than willing to accommodate as need be, giving us information headline by headline , tic by tic, and analysis after analysis. All instant opinions and all could and can be acted upon immediately with just a keystroke; still it was acted upon as we saw it's effect on the company and we were not so concerned with government regulations effecting them.
Unfortunately that has changed to the point where the information we get word by word from the government trumps all other reason and regardless of how well a company is managed, how good their outlook, their book value, p/e ratio or earnings, traders are dumping them. We deem company information now as irrelevant because we fear what the government will say or do in the next minute, hour, day, etc., so we are trading out of fear.
Government action fear based trading should worry us all, it's not only because we act fearfully but, also because we are letting the government regulate how companies will operate and letting go of true capitalism. When we call upon government to do something about excess CEO bonuses and income, when we have politicians instead of stockholders call for company accountability and when we call upon government to equalize things via regulations we have a socialist market and we don't have a capitalist free market. In other words we have a China not USA.
A perfect example of how a fear based government regulated market works is being lived as we speak. Another more specific example is how the Chinese government via the media effected BIDU; trust me, there's no way that CCTV would have reported the news without the government's OK, because BIDU is far too public not to be monitored by them. The reason could be as innocuous as someone in BIDU offending a high government official or perhaps it was because they owed GOOG something but both those are just (somewhat educated) guesses. In other words when government intercedes, reason for company viability is thrown askew by the sheer effect of the unknown. True or actual reasons are unknown, and as you know market hates uncertainty.
Under a capitalist free market, reasons could be reasoned by looking at books and other more direct information about a company; under a socialist market reasons can be a joke, a favor, a bribe, a threat, a ______ (fill in the blank). FNM and FRE are examples of government regulated stocks, now we have AIG, all the banking stocks being bailed. We also have the threat of the entire market being re-regulated, monitored and run by them and as a result, chaos will continue to prevail.
As rules will change your reaction and adaptability will count, but don't count on reason because the markets and our government as we've known them are no longer there; we've given them far too much reign over us.
Sunday, October 26, 2008
We tend to stick to a theory, (platform, idea, name it what you will,) even when all evidence or our experience points to the contrary, with a tenacity that sometimes takes us to a catastrophe before we can admit wrong. That in order to survive we may have to do harm to others, is accepted; but what is in our nature that we wish to do the same to ourselves? Is it that we practiced lying so much that we cannot admit that truth works better, saves us more pain, and perhaps less suffering in the long run?
If examined lying in nature is much older than telling truth. After all, throughout our evolution we had to use much trickery to convince animals much fiercer than us, so we had to "fake it to make it". When divine teachings entered our consciousness, we were ready to adapt ourselves into larger societies, we call civilizations, so you might even argue that telling the truth, besides being a divine guidance toward good, is also a luxury of safety and superiority; or, in a word, confidence.
So, is it the lack of confidence that allows us to lie to ourselves as well as to others? That strutting ourselves in front of an audience makes us look better, more powerful and more successful, is a given and it also gives us confidence. Which in turn, it also fuels us to do it more, and because we do it, we excuse others for doing the same. All in their turn, all in lesser or greater extent, until it all collapses.
Thoughts such as the above kept running through my brain while listening to the hearings which I shall dub: Politicians vs Corporations vs Financial Gurus over the financial mess we are in. As the house of cards collapses, each wishes to dump the entire fault on one sector or another, still denying their own role in the creation of it. What strikes me as scary however is that one sector of the the three seems to have the superior position in this triangle and that is the Politicians.
Politicians seem to have perfected lying to others as well as themselves to an art form; the evidence is that they keep being re-elected no matter what fault they bear in the creation. They seem also to be able to bring down, put away, punish many with the same, greater or lesser role. In other words, they wield the greater power perhaps as a result of perfecting lying, to both themselves and others, without conscience.
But in order for them to have this much power, We the People had to have a hand in it. This society we built was based on the truth that: All Men Were Created Equal with Certain Inalienable Rights. That means, my friends, that we all bear the responsibility with what we do, with our lives and in our society. You could say that when our Society was built it was not lying to itself.
So what happened to telling the truth? What happened to that ethical stance of being honest for our greater good as individuals and as society? I have a feeling it went by the wayside when we became less confident in ourselves; when we handed over more and more power to our Governments starting with the Income Tax; it went by the wayside when we did not hold Politicians accountable for their promises and allowing them throughout these many years to lie to us more and more. Using the excuse that "all Politicians lie, (chuckle)", we kept lying to ourselves that it was OK because everybody lies. Truth went by the wayside when we left our conscience behind.
Perhaps we are not realizing that we are regressing to a less civilized version of ourselves as we keep lying to ourselves and we allow others to lie to us without limits. Perhaps it is in our nature far too deep to correct. Perhaps it's for our survival. Perhaps it's for our demise.
"That we lie successfully to each other is natural; that we successfully lie to ourselves is a natural wonder." Robert Ardrey in The Social Contract
Monday, October 20, 2008
In order to evolve new things have had to be tried otherwise, we would not have been able to use tools, make fire, invent the wheel....etc. Trial and error... read that: risk and reward, failure and success... took many-a casualty, yet the desire to forge forward was not thwarted. Much like today, the the downward slope is easier to ride, yet it is the surviving risk takers that will reap and give the greater rewards over the long term.
The very same risk takers that today so many people want to bring down and destroy. The entrepreneurs, the small business man/woman who are willing to work and give work, those large companies which still operate with integrity and you and I who are willing to work for ourselves by ourselves all of us doing our small bit for society and the economy.
Today, we find ourselves on the wrong side of people who claim we've made too much, and we are evil for wanting to do more; therefore we should be mandated to share of what we have. Which is the exact same philosophy that got us into this financial mess in the first place. The Community Reinvestment Act passed under Carter, expanded under Clinton in 1995, which led to the sub prime lending frenzy, and which in turn led to today, all were based on the well intentioned "spread the wealth", "everyone has a right to have their share" philosophy. Like lemmings everyone went along and most who didn't wish to see it coming, fell off the cliff and now blame everyone but themselves for the "generosity" going awry.
When you are on the wrong side of a trade what do you do? When you see your funds evaporate does it make a difference if it's fast or slow as to what action you take? If I am correct, I know the answer: you analyze, admit a bad decision and get out before it gets worse or before you lose all that you have worked for. That is the self-directed approach to living: the one they call greedy.
Those, realizing that a course correction is needed, get to save themselves from disaster and are able to enter another opportunity most likely making good, contributing to society and the economy again. In contrast, those that fall of the cliff, can't because they lost it all. Yet not seeing their folly they are most likely the ones who think it should be tried again, and therefore ask for another helping hand from; Guess who? They never seem to wonder: When the cow's dead, what is to give milk? So goes the vicious cycle until one day we awaken to face a very life altering choice.
I give you a challenge to read two documents today. You may think you know them but when was the last time you read either one?
TheUSConstitution and TheCommunistManifesto
It's not a long read but may take a bit of introspection and analysis because now you have to choose: Which laws would you rather live, create and work under?
Monday, October 13, 2008
I know, I know, says she ignoring her muse, I will make enemies with this one; but I just can't keep mum about how their palates are flawed and misleading.
I am not saying that they haven't contributed well to their respective industries because indisputably they have; Parker much more so than Cramer although Cramer has been on the public scene for about 10 years only compared to Parker's 40.
What E. Robert Parker did for the wine industry cannot be easily measured, the publicity he provided enabled the industry to grow multi fold; what was once an elite-like club, became a Nascar race in popularity, and for that Parker can claim, and should be given, a lot of the credit. His palate has been disputed, however, by many over the years and I'm told he's still not welcome in Burgundy. He wasn't very welcome in Napa for a long time either since he claimed that California Cabernets will never be able to compete with Bordeaux. I also think that the overly oaked California Chardonnays and now the heady Zinfandels and Pinots coming out of many California wineries are a result of his big bold fruit forward loving palate. I understand that he's now after the Rhone style wines (long neglected he says) and I am finding much the same path. HELP! Please continue to neglect them Parker and leave it up to Graham and Lynch. Of course, his comments make a lot of money for many, so who am I to judge those palates. Just trust that I will only support those that please mine, and it's not 14.6%+++ alcohol bomb, thank you!
What Jim Cramer did for traders is well.. let's see. Having not read his books, I cannot comment. Watching his show in the beginning with Larry Kudlow and later alone, I can. He should be given credit for educating those who are novices in the market and about investing. I give him credit for telling people to do research, and what to look for in the prospectus and advising many how to enter the market, taking baby steps. I am sure a large part of contribution to the booming online platform markets and brokers can be attributed to him. CNBC having no competition, most traders/investors listen to that channel. But I will take exception to his instant remarks as to what is a buy/sell/hold/ investment, and his irresponsible recommendations overall to many unsuspecting listeners, who I'm sure got burned immediately and over time. His claim that he does not have an effect on market trades is downright wrong. Many of us over the years knew what would happen once Cramer uttered his recommendations and took advantage of those swings. For him to claim no responsibility is a dangerous denial or overblown modesty. I just can't picture Cramer as being modest so it has to be the former.
Not taking resposibility for his effect on the markets is bad but what's worse is when he touts or snubs a stock to later erase what he had said and claim the reverse. Witness last Friday's AAPL comment, that he made (being earwitness as I was listening; I just tuned into CNBC as he got on "Stop Trading" segment, and I'm sure I wasn't the only one who heard) saying that the only reason AAPL was still holding up is because the bulls were propping it up.. but he said it will be not long lived and "who would want to own AAPL at these levels anyway". AAPL was trading around 95 at the time and within a minute of his over the air comments, AAPL retraced to near 91, where it again bounced and pushed up to near 100 then to close at 97.15. Wonder how many holders of AAPL sold on his comments out of fear and panic. I wonder how much he cost those holders especially seeing where AAPL opened today and where it retraced. And to top it all, today, Cramer claims his comments Friday did not say to sell but to buy and that he's been a long time supporter of AAPL. (Did I mention that AAPL was upgraded today by Bernstein and featured in Barron's over the weekend?) Why did Cramer change his tune and deny his comments? HELP! Of course his comments made losses for many and gains for others, but I'll only support those stocks that please my own sense and it's not Cramer's mine field list, thank you!
As is said, no one can tell you which is the best wine for you .. that is up to your experience, your personal taste and palate. Likewise, no one can tell you which will be the best trade for you.. that is up to your experience, your personal taste and tolerance.
If nothing else, Friday, today, nee this year should prove that no guru is flawless and no guru out there can claim to be correct all the time and no guru should claim to make you the best trader, investor or wine connoisseur because that job is up to you. As you practice, you learn and as you learn you adjust your choices to your ability.
Do we need gurus, mentors, educators and advisers? Yes we do; but like in college, if you believe and recite everything your professor tells you, you are not learning you are merely being brainwashed. All too common now days, unfortunately.
Thursday, October 9, 2008
I am not, because everyone wants someone or something to believe in and to follow. That's why religion won't die, dissipate or disappear. Even during the harshest times of the communist era, under Stalin, churches were filled by people who were willing to take risks. When the wall/curtain came down, churches were filled with people pouring outside, straining to hear the Masses even after 75 years of prohibition.
We seek out those we can learn from to better ourselves and those whose tools we can use to apply what we have learned. There are many sites, seminars, books with claims of success to help you, make you, elevate you, and ultimately to make you rich. They stuff your Internet box & snail mail box, but how do you decide which one to trust?
When the desire is to learn and grow, one must take the leap of faith by investigating what is offered which takes reading the site and if the site appeals aesthetically and one is attracted by the wording, most likely than not we pay the price of a visit. The journey can and will open thousands of possibilities. We interact, become Internet buddies and we try to mutually help one another. Ideally; and it all takes trust, ideally.
Sites can claim services, but do they deliver? Sites can claim accolades but are they true? Who has written them? Are the trades/profits really true and have the clients really written those testimonials? Not long ago, I was asked for my opinion why so many who joined the site, failed to stay long. Aside from the obvious that there are many who don't linger long anywhere, ultimately, clients buy and stay because of trust.
Americans tend to give trust easily, we also attach a belief that our trust was well given so it is difficult to release it when abused; therefore we tend to hang on until it's broken. Once trust is broken however, it cannot be reclaimed.
What's happened in the past week in the markets is that ultimate broken trust. Broken trust in our representatives, in our leaders, and the very structure of our country. Unfortunately, when we reach such a fragile state, we can easily be lulled by another to trust and believe in. So be careful of your reaction, anger and disappointment. Don't trade when emotional, and don't give up in hope.. there's a bottom here somewhere. Interestingly, when you look at the Dow past 100 years, downturns, crashes and pullbacks show up as mere blips on the chart.
Monday, October 6, 2008
Because Congress dropped the word "bailout" and by the end of the week the people actually were about 50/50 in favor and against the bill.
The Democrat controlled Congress with the cooperation of the general media, pounded the message that our economy was bad, and that it was the companies that "controlled your fate" and were to blame; this in spite the fact that they collected record tax revenues for the past four consecutive years. Think about it: record tax revenues cannot be collected unless people and businesses are thriving. But they kept pounding the mantra: "Big Business is Bad, We in the Government are here to protect you from them" and have been pounding it for many years. This time they made the outlook so dire that the people finally actually are believing that the Wall Street and business are the evil ones. Making much of the public forget, if they ever knew, that Wall Street IS Main Street. That's how communists operate; they accuse before they can be charged; better known as "smoke and mirrors".
Congress passed the package because they had to cover their a$$es-ts. PERIOD. It is not Wall Street they were protecting it's themselves. Believe me this scandal would be much greater than Enron if the involvement in this fiasco by Barney Frank, Obama, Clinton, Pelosi, and other cronies would be truly revealed. They would be on the top rung of the greed ladder. Therefore you see it has to be covered with enough paper to make sure the vermin have somewhere to hide. With the investigation looming into FNM and FRE the urgency of passing this bill was of utmost importance. Do you really think they know what they signed? Do you really think they could read and absorb and analyze 400+ pages of law before they signed it? Remember it was the government under Clinton that mandated the banks to further ease the rules for lending so even more of the lower income population could qualify for home loans, it was that or be sued. Banks complied with the assurance of FNM and FRE backing them. "We're the government and we're here to help" ! Scary, huh?
So they took the biggest ever control over your destiny and they will not give it up again. You need proof? When was the last time government rescinded a law and gave back control into the constituents hands? 1933 with the repeal of Prohibition.
It's almost too late anyway.. unless people in the media finally get religion and get the real story out, for which I don't have much hope anymore. It's too late as far as a new Socialistic precedent in government controlling your life and money is concerned. This one's is far larger than : the Social Security Act "we're going to take care you"; the Medicare "we're going to take care of you" promises that still cost you far more than you can calculate. This time via real estate "we're going to take care of you" and your investments "we're going to take care of you". Just wait for the new Security Exchange Commission regulations, the new banking and lending regulations, because people were duped into thinking they needed government control; Not only will it cost you in dollars but in sense too.
End of story for USA as a Republic and your future as you now know it, unless you get smart, and vote right (no pun).
Republic vs Democracy - http://www.c4cg.org/republic.htm
PS. The link to this post is not an endorsement of any candidate as I am in the wrong State anyway, but he does make a ton of sense, so if you are there, I hope you do vote sensibly.
Tuesday, September 30, 2008
But the job's not done. Even as we rest, the planners are continuing to re-create the same unpalatable offering with perhaps sweeter words, but be warned it will be equally poisonous if not more so. What the writers of such wide sweeping documents tend to do is that if at first it doesn't work to convince, they'll make it more convoluted with more inclusions for a popular sell. That easy sell, remember they are creating it and they won't give up. This new proposition to control is far too tempting for them; much like a newly fed vampire they can feel the power pulsating through their veins. You can almost see them smack their lips with satisfaction of the kill and that's why they were so angry when victory was snatched from their jaws.
What we saw, post it's demise, was a predictable reaction of the market: sell off. The reason why is not necessarily what the government pundits were trying and could not sell. Let's consider that the companies, fund managers, and the population etc. collectively realised that this will not be an easy fix. In other words, the rescue squad did not arrive, therefore self preservation sets in and running to safety is the motto. But that's presuming we need a rescue. What's happening is no less than what should have happened several years ago if interest rates were not continually decreased, in other words the fed overdid it again. Had they not, we'd more likely be over the correction by now because, reported or not, the economy was good and we could have bore it much easier then. This experience reminds us yet again, that meddling and rescuing seldom teaches new behaviour it only makes the learning harder later.
So here we are; if we succeed in convincing Congress to do nothing, we have to bear the hardships to come, but if they do come to the rescue, we may only succeed in leaving hardships for our children.
So it's not over and it will not be pleasant. These coming days will be full of uncertainty, calamity, catastrophe for many if not all; yet it's in hard times that we rise to do our best and if we keep focusing on our best, we can again rebuild. Trading will be choppy at best and dangerous at worst. It time to take out the lessons learned in 2000:
- don't panic
- don't bet on the bottom,
- falling knives cut deeply,
- don't get caught in the avalanche,
- cash out every night,
- swings are a higher risk now,
- know and trust your experience.
Friday, September 26, 2008
I'll be watching the energy stocks in response to this news. Oh, I know that Congress allowed the expiration of the drilling embargo bill, but what will replace it; or what won't? I think they are playing Russian roulette (pun intended) with our economy on just this alone: No oil, more cost for oil, more cost for energy; because, like it or not, our need of oil or gas won't go away for a looooong time.
Those insisting that we can solve this with alternate energy sources quickly in the near future are not thinking, whether due to youthful optimism or downright ignorance. Their solution and philosophy, like the philosophy for better education, is to throw money at it and it will happen. The truth is we are growing, the world is growing and we need more energy for airplanes, trains, ships, trucks (unless you know of a fuel cell prototype on the drawing board for those) that wind power won't solve. Russia knows it, China knows it, all the other oil producing nations know it; that's why they have not stopped exploring nor drilling on their own soil and using our off shore resources (just outside the borders) for their own gain. So let's elect those that will give strength to our enemies and extol a huge price for our future needs; $700 billion won't be so much once we compare the costs.
This is my take: I seriously doubt that Congress will vote on an energy bill prior to election day therefore oil will stay low until the election results are sealed. A democratic majority in Congress will ensure higher oil prices unless they vote to allow drilling (forever hopeful, I am) coupled with Obama as President, we may not be able to gauge the top; of course too fast a rise may force the hand of Congress to allow drilling, so they will take it slow.
OK, so there it is in black and white.. you may call me on it, but wait until the 5 year plan expires. (If you don't know what that means, you're too young; and I'm glad you're reading this blog!)
Sunday, September 21, 2008
We all know that FRE and FNM did not happen overnight and that CFC,LEH, BSC, and the rest of the banks, mortgage brokers, financials were not totally blind as to what was happening in the credit markets. Enough has been said about them over the the past couple of years to alert most even if most did not wish to acknowledge the coming failures. It has been coming down the pike for longer than most of us realized, looking back it was brewing even while we were enjoying the .com boom and lamenting the .com bust. But like a dormant volcano, it was slowly percolating below ground and slowly growing a dome and most were enjoying riding the wave rather than acknowledging the possibility of its eminent eruption and consequent destruction of anything in its way. We as the consumers of its products were very happy to partake in its generosity while the growth took place and most did not question the the cost it will eventually demand of us; after all, that was someone else's problem. But what seemed to good was again proven to be so.. too good.. and now that we need to pay for it, most of us wish someone else to do it as we claim no responsibility of its creation. Sound like: Congress, the banks, the brokers, the investors, the borrowers??
Truth being said, those who could not otherwise afford loans for homes they otherwise would not have even looked at, were now being sold the idea that they could with certain "breaks" afford them. Truth is that those borrowers knew that they could not afford them, yet they were easy to sell the idea that their time has come to finally partake in what was "promised" to them under the American dream: home ownership. Truth is, that all that cash sitting on the sidelines since the late 1990's early 2000's needed to be invested somewhere and that they were clamoring for a good return on their dollars, and bundled loans seemed a good way in a rising real estate market which they helped fuel. Truth is, that the ever increasing demand of government to do something for low income families demanded the discard of common sense; but hey, they were buying votes; and it was an easy sell.
Now, let me add to my first paragraph that the items you need to choose from one would need your diligence to maintain, and work on possibly increasing it's value but also if it breaks you need to replace it out of pocket; while the other will be maintained and will be upgraded as needed for a fee, if it breaks well, too bad for you we will charge you a replacement fee, but you'll never have to worry, we'll take care of it for you. Now which one would you choose?
We all wish, from time to time, to be bailed out of our problems; most of us would like to disavow any help in creating them, for we've been told for a long time that our problems stem from some lack in our society and that is the root of all of our personal failures, therefore, society should take care of our problems as well as us. We practice blame for our problems every day .. we hear it from our politicians in every sentence. It's an easy sell.
We also hear promises regularly from all advertising, from all politicians, from all market gurus and analysts, with which we'll be saved, helped, given what is our due. Yes, everyone with something to sell. We just have to follow their advice to make us feel good and be alright. We would all like to think that others have our best interest at heart; that those we entrust with our money and lives will look out for us as our parents would. It's an easy sell and enough have bought and are buying.
The forefathers of this nation did not believe in regular taxation for a very good reason: Power coupled with money corrupt. Once the income tax was approved, the idea of "great society" was not far behind, after all, those that we pay "owe" us. Not enough were considering the true cost: an ever enlarging governmental body, a hungry monster forever needing to be fed for taking care of us. Too many generations have passed; who's to remember what it was like without all that dependence. Isn't it just easier to succumb and let them take care of us; to join the global community and be as one?
We have taken a huge step toward that end this past two weeks. Government not admitting it's own helplessness and its own role in the creation of this drama, it still is pretending to be able to take care of something it has no business in. Most have accepted that it needs to "do something", and forgetting about the "strapping of debt" to future generations, it becomes even a bigger monster; and it's an easy sell.
So back to the items that you need. Have you thought about the cost? If I were to tell you that one you'll pay for dearly with blood, sweat, tears, frustration at first, then a feeling of achievement, triumph, self contentment and success later, but without a guarantee. The other you'll pay for dearly with your joy, freedom, self will, to later achieve some comfort in mediocrity, complacency, frustration and hopelessness. Which one would you choose?
Like in day trading, or anything you do, taking total responsibility for yourself and your actions, is a hard sell.
Sunday, August 31, 2008
We all find things to do in our lives that for one reason or another attracts us, draws us in, and without much effort takes up our time in pursuit of perfection. Without stating the obvious for me it's been especially 2 or 3, no 4, and now one more. Each one I've immersed myself into, with hunger, passion, total devotion and each one I've thoroughly loved to do even if not for a lifetime, certainly for the life of how long I could do it; yet money and riches certainly did not come with each and some if not all I've spent more on than what I've received, but none have I regretted and none would I not do again.
So then why continue doing it? Isn't it money that drives us all into further pursuits? Isn't it money that proves us our worth? Isn't it money that propels us to fame, dares us to take chances and tempts us to sell our souls, and isn't the pursuit of money that derives our greatest passion? Knowing full well that I'm not the first or the last to ask these questions, and knowing well that the answer is an obvious "No!", let's go on.
Everything I've devoted time to, pursued to perfection and have been passionate about has given me something in return: a fulfilment of some sort, not all monetary but certainly can be defined as enriching. Whether it's teaching, skiing, dancing, writing, or trading the rewards cannot be only counted in dollars and cents. They each filled a void, contributed to my growth and they all allowed me to participate, interact and get to know people from all walks of life.
I can only conclude that all what we do takes labor; a labor of love or not, it's all labor for if we do not do anything, there is no life. I will even argue that we all do what we do with love, because, we choose what we do and therefore if not out of love then what? If your answer to that is: the pursuit of money, well, that in itself is a love. So perhaps the answer is not "do what you love and ...etc.", but "love what you do and ... etc."! Done with love, nothing becomes a chore, everything becomes a labor of love.
As to any money magically following, well, my life is not over yet, and I'm not one to shut off any possibilities. So I'll keep on doing and loving what I do because I can have control over that and the rest is up to the Universe.
Monday, August 18, 2008
Meditation helps in realizing how immediate every moment is in our existence and how time can be slowed down to where we can notice the most minute details and also to act in the moment of opportunity.
We get so caught up in life trying to get everything done, that we need nights like these to remind us that we achieve our best, retain the most and enjoy it more when we are relaxed with opened senses to what is about us.
In a receiving and ready state, we are able to wait for the trade, and are not tempted to force the trade but to let the trade come to us. Time and timing can be best recognized when relaxed, not when tense.Today's market was such that it would make a master in patience tense. Jerky, choppy, whippy, punchy all applied at any one time, so much so that I was getting punchy too with eyes rolling in sockets multi directionally. (is there such a word??) Yet sticking with the plan worked and proves to work time and time again. The plan has 4 rules:
- When frustrated by the markets, put on music. Yes, dancing music. (I prefer Latin, hotttt salsa, jazz, rhumba!).
- Get up, step away from desk and dance. (this really works the kinks out of body and brain and also reinforces reason not to have a webcam)
- When an uncontrollable grin creeps permanently on face, one can be assured that a state of bliss has been achieved and therefore it's time to get back to trading again, alert and ready; glad for the rest, markets have moved, perspective shifted, awareness sharpened.
- Now, for the most important rule of all! Do NOT turn off the music; Trade to it!!
One final note (no pun, ha ha) acid, punk, etc. the kind that fries your brains is the hardest for markets to get accustomed to, but if it rocks your boat, so be it, remember rhythm, moving as one with the market is the key.
P.S. Ulrich, Play on!
I started the above story few days after Russia invaded Georgia. I stopped because I didn't find a link to trading, but knew the passion of what I spoke had merit yet perhaps not for this blog. I've actually had thoughts of starting another blog just for such, decided I will explore it but still have had not the time. Yet the time for this is now. Especially because of what the fed did the past weekend. The bailout as they call it.. the payback as I call it.. yet another burden stuck on taxpayers, without the taxpayers approval. The SEC seems to believe in deep pockets; yes, yours and mine. The Congress spends it easily marching on their way toward the glories of Globalization, they seem not to notice that we are vacating our souls.
Where are the protests, the marches, the outcry about what Russia has done and continues to do to Georgians. Most of what I heard from the news media showed that they do not bother to research history but just read convenient on the cuff stories that totally ignore facts. Where are the endless analysis that would question what how and why it happened? More time is spent on analyzing 1 hour in Brittany Spears' life than on the real threat to our very freedom. Congress rather hate President Bush and tell us to hate ourselves, than to analyze what is really happening overseas. Perhaps because it may threaten their glorified picture of a world union?? Oh but then maybe you don't see the connection?!!?
Georgia is a strong believer in our form of government and therefore a strong ally. It is also the only country which stands in the way of Russia's total dominance in the supply of oil from the middle east.
I know one thing learned from the past: it will repeat and repeat until you take notice and resolve its cause or it will finally it explode in your face. So start noticing and start resolving before Russia will monopolize and create the next "cold" war we'll be much less prepared to deal with.
Thursday, August 7, 2008
That's exactly what I have to do with my baskets of stocks I follow. This is a good time when direction is unclear, Washington being away, Olympic Games about to start, and markets are choppy in volume or direction. Attention is focused on China and the games, children going back to school or away to college, and last minute vacations are planned. The markets tend to reflect what we live and currently it's uncertainty. We are about to decide the future of our nation in the next quarter and it's important that we prepare what we can in advance. Clean your house, lessen your clutter and you'll be open to opportunities yet unknown, the be ready to rock and roll the last quarter of the year no matter which direction it takes. I've provided the music for inspiration. Enjoy! (click on title for "Take Five" click on picture for more of Dave Brubeck)
Tuesday, August 5, 2008
The above was written by me a while ago but what brought it to mind again is that , Alexandr Solzhenitsyn died, so in honor I took out my copy (rather my father's copy) of his book: The Gulag Archipelago. A book with many highlighted passages and with lots of marginal notes left by my father who barely survived some of that horror. Perhaps Solzhenitsyn's death is a timely signal with a purpose for all of us to remember that we are not immune to making mistakes that cause much pain for future generations. It happens when we dismiss facts and run after hopes. It happens when we hand over power to others only too willing to run our lives.
Today's trading day was one very much like that. Waiting with almost complete stillness for a body of men to decide what the future of our money's value will be. That magical hour came and then traders waited for someone else to analyze it's results. I've been watching in amusement for years. It's almost comical if it weren't so tragic, because it shows that so many are very willing to have others decide how they should interpret facts and opinions. Resulting in a group mentality which totally ignores the fact that this country is doing well, despite the publicized so called worry in Washington. It ignores that this country has been creating more wealth since 2003, resulting in the most tax revenue collected in the last 4 consecutive years than ever before in history. It ignores the fact that the rest of the world is still growing and still in need of our equipment, education and inventions. It also ignores the fact that most businesses are not effected by it because most businesses serve the local community and not the world. We may be in a slowdown now, but we haven't imploded and I doubt we will if we continue the fine American tradition of ingenuity. We will not solve the energy shortage, nor the mortgage defaults in Washington. We will not solve the job losses or gains there either. Where it will be solved will be among the people living here, willing to risk and invest in their own ideas as they see a solution for a need. Despite all that you may hear or read that's how it's been done. The electric car has been available for many years for anyone who wanted one and not at a prohibitive cost. The light bulb was not invented in Washington, nor was the automobile, the airplane nor any miracle drug, or almost anything else that you can think of. It was it's people that created the most successful country in the world. It happened with hard work, much failure and finally success, mostly without fanfare amongst it's citizens and not in Washington.
Traders and investors will continue to flock to stocks (read companies) that are successful in bringing innovation to the forefront and available to all. But nothing can make people embrace what they do not want or are ready for. Unless, of course, you elect a government that will tell you what you can or can't do, can or can't have, what to think or not think, all because you gave it too much power to decide for you what is good for you or not. Drill or not to drill (for oil) is no longer up to the need of the people, nor up to the companies that helped build this country to greatness. They are now bad, shunned, entities labeled a greedy bunch. So in order to teach them a lesson, this government thinks it's best to send trillions of dollars overseas than to keep that money at home available to it's citizens. That's how a government with too much power solves problems, all the while pointing fingers and blaming others for it's lack of action. Ignoring the people's desire is dangerous, but blaming one man for it is even more so.
Wednesday, July 30, 2008
Like with anything we do, a large part of the enjoyment is in sharing the experience. Who we share with is often unknown when attending a wine tasting event or when together with a group of traders via the Internet. Serendipity however seems to always play a role as it did the other evening. Attending a special tasting of Kosta-Browne wines, I found myself drawn to sit with a couple at one of the large tables, although there was still ample space for any other choice when I arrived. It turned out that they are from Marin County, you know the place, the one that brought you Pelosi and Boxer. Pledging, as usual, to keep my comments to wine, I was later surprised to hear that in his travels many years back he visited Hungary while it was still under a communist regime and his clear comment that most Americans cannot relate to how suppressive that system is. Oh my! Turning my interest away from wine and onto conversation on the subject, I think I uttered something fascinating like: "We may soon find out" and wondered in quiet introspect how much insight most of us hold back for reasons of acceptance.
As tasters and traders we are often asked for our opinion and have the opportunity to share our thoughts about wines and the markets. Often there's silence until someone breaks the ice yet it's not necessarily followed by a lot of hands. Many of us don't share everything and most don't share anything about what we think or know, in an unfamiliar setting, even though we are drawn together by mutual interests. Yet in the same area, in private conversations, we feel safe to say our opinion. Why? What is the difference whether we share with one or many the same opinion? The wine will still taste the same, the market will still move up or down and politics will still be dangerous and maddening; or will it?
Wines have distinct flavors and nuances, indigenous to the varietal of the grape, which can be elusive especially to the novice but when a fellow taster shares, we can have an "aha" (oh that's it!) moment as someone points out the cloves, raspberries, roses, violets, cherries, smoked bacon, cedar, stems, dark chocolate (yes, I'm drinking Pinot) Likewise in trading sharing a possible trade and what setup we're looking at can create the same "aha" moment. So someone sharing their view alters our experience by teaching us what we can look for. Is it not the safest way to learn when we talk about our thinking; sharing so we can also hear, see and taste other views?
Putting out our thoughts to a larger audience, I think, has to do with confidence; or the lack thereof. Lack of confidence in our knowledge, of not being "masters" and fear of being wrong. Why? Ask yourself: why do we anoint some people as "experts" and how did they get there? As I mentioned in the first paragraph, it takes practice to be good at anything. It's not all study and education; it's a willingness to be "out there"; to put "ass on the line" "teats to the wall" or let it "all hang out". Is it not the best way to learn when we risk something? Yes, some may snicker, some may criticise, some may even call you names but you can only get better, not worse for the trying.
Monday, July 21, 2008
I was thus challenged with the thought when I joined a new room of traders; many it seems with great credentials and much experience; newbies, oldies, experts and mentors alike with diverse interests. I've been with a group of online friends for so long, that jumping into a "vat" of strangers I found myself wondering: It's been years where I've felt so much internal pressure to "show me".
Like anywhere else, the longer we know someone, the more trust we place in their abilities. Trust does not happen overnight it is developed over time. Therefore belonging to a group of traders over a longer period of time, by nature, allows us to learn intricacies and styles which in turn gives us more opportunities for good trades.
Ultimately it's not what we can do for each other but what we can learn from each other. It takes trust to learn. (to be continued)
Friday, June 20, 2008
There is another saying also which states not to buck the trend and it's best to go with the flow; again, admirable if you are able to recognize trends and flows and if you can live with yourself running with the crowd.
We in the USA decided not to die on the Vietnam "hill", nae, we decided not to die on the hill which would have required us to chase Stalin back to the USSR immediately when WWII was "over". We now seem to have chosen another hill or two for the moment, one in Iraq and the second in Afghanistan.
So we chose freely to put off what is an obvious prolonging of the misery for many because I ask you, if Stalin would have been immediately defeated in his pursuits of occupying central Europe, how many lives would have been saved? Would there have been a Mao, a Castro, a Saddam, and (what I fear next) a Chavez? All emulators and admirers of Stalin and therefore would there have been a Korea, a Cold War, a Cuban missile crisis, a Vietnam, a Bosnia, a Kuwait, Gulf War and Iraq? All hills we could have died on I suppose but they are also battles mostly left unresolved for Cuba is still there with the same regime, Vietnam too, Bosnia we still monitor with troops, Kuwait is freed but are we from Kuwait, and of course now there's Afghanistan, and Iraq. I also believe that the USSR would still exist were it not for President Reagan, who had the guts to call them out to the horrified fear of Congress and many whom were sure Reagan would put us in a world war during which we would all die. (remember the nuclear threat?)
Sometimes one needs to be the only voice in the wilderness; sometimes one needs to be the first one bucking the trend.
In trading too, it happens. We have to ask if the trade we got into is worth our demise when it turns against us. We have to act on that decisively and determine how long are we willing to battle on the hill, remembering that our goal is survival for another day, so we tend to go with the flow and not buck the trend. But there are days when it just doesn't seem right. I'm not one to say that corrections are bad for in fact I welcome them; yet today was a day where I just felt that this whole sell off is panic and bordering on dangerous, mainly because I think perhaps it's enabling the the very thing we don't want happen. CRASH! (the nuclear threat) and maybe it's just what our enemies want.
The question is are we worthy of our freedom to chose and do we believe in our system well enough to win this battle for it's a battle of economies worldwide and perhaps the end of ours as we know it unless we are willing to defend it for our future. ( to be continued)
Tuesday, June 10, 2008
Trading on the computer one meets and associates with many people from all walks of life with different, experiences, styles, and strategies which includes experts as well as beginners. We all have different reasons for associating with other traders; some for social, some for support, some for advice, some for suggestions, ideas and many for learning and guidance. When we decide to join a trading group, we give our trust over to the moderators of that group to a certain extent for in order to partake and learn about the style of that room we have to follow their agenda. It's through this observation and the constant checking its fit to ourselves that we decide to give our trust over more or less completely, thereby deciding to stay with or leave the group.
When I make a trading call, I in effect ask you to trust me and follow what I say. Yes, but how can you do it without some sort of proof? I can point to my track record, but that does not guarantee that this call will be successful, so the answer of proof is not with me but within yourself. Your own experience, style and ability is where your own trust comes from and the decision to follow my calls is the trust in that instant of recognition. It's not a blind trust that some new traders may try and unfortunately fail with more often than not. It's a developed trust that comes through experience which takes time and practice. Yes, time spent with the team you chose to be a member of.
I do not like to give a call I cannot explain, therefore I am not a "silent" moderator so I try to give guidance and welcome questions. I am constantly aware of the trust others put in my calls and it gives me distress when I don't feel at the top of my game. That is why it gives me greater satisfaction when your trades go well because I lived up to the trust placed in me, but more important, you lived up to the trust you placed in yourselves! LEH, IPI, POT, BIDU, BUCY, AAPL: Today was just one of those days WTG Team! (to be continued)
Monday, June 2, 2008
Trust is an intimate feeling it demands total faith and it demands giving as well as receiving. Who we choose to trust and when depends on experience as well as intuition, and how well we are able to use those in conjunction is important because usually we only have split seconds to decide.
I was just thrown into such a situation while sailing last Friday when strong winds, in an area aptly named hurricane gulch, decided to whip up giving us a strong challenge to stay on course. I was at the helm, the captain on the sails and it took quick maneuvering, jibing and total trust in each other. He only knew that I have sailed before not that I could handle such a situation, and I had better evidence of his abilities as he grew up sailing, so immediate trust had to play an important role. We were never really in danger, but we had to coordinate jibing well enough together in order to stay that way.
Much is the same in some calls, when one is at the helm of one, trust has to be a player. The progress of a call can seem on course when something comes to create a whip, do you keep at the helm, maneuver or let the storm take over. The answer depends on the trust you have in your call, the experience you have trading a stock and intuition to keep you from loss. Today I made a short call on MA below 308 late afternoon, experience told me it would need to close a gap down and against the days evidence, I was expecting between 304-302 and said as much. Yet it kept being whipped about by the battle of the short and longs until finally the bulls gave in and let it drop my desired points almost hitting 302. It gives one satisfaction when the trust placed in ourselves proves itself rightly guided. Yet I won't deny that it gives me greater satisfaction when I'm trusted by others, but it's not without peril. (to be continued)
Tuesday, May 6, 2008
On the other hand there's the "no bottom line" where I don't get any clues, guidance or hint of a direction; bottom is up, up is down and sideways is everywhere. Confusion rules under the guise of being nice and accommodating, wearing a badge of a conformist. Having the least consideration of judgement, one that usually ends in being "bottom lined" painfully by an outside force; abrupt and final perhaps as in a twilight zone.
Bottom lines come to meet us in other ways as well. The kind I prefer gives me more time to make that ultimate decision to know when and where a smoother transition is possible. I feel that way I can have a conversation an impact and maybe some influence on the outcome, and the feeling of being in some control of that final decision; allowing me the line I've also chosen, not just chosen for me; more of an agreement than an ultimatum.
I've struggled with it all, sometimes being very lax in my manner and other times way too tight but I assure you that the ones I remember are the ones that were forced on me; those being the most difficult to swallow and the ones we should all learn from and never revisit. Alas, if only we could be so perfect, never needing a repeat lesson on anything.
So we've met them all, the abrupt, the obscure and the put off. None of them feel good really for you already know I'm speaking of stops. Not easy to set for by its very "definition" it means "loss" of some funds we've put at risk. Even when speaking of a trailing stop once gains have been made, it's not easy to say: OK I'm willing to give back ___ $ in order to make more gain.
Yet that is exactly what this game is about: willing to give in order to gain and to set that bottom line is perhaps it's most crucial though difficult step.
It may help you to think of it this way: bottom lines keep you from hitting bottom.
Monday, April 21, 2008
It's been a busy and challenging tax season, one of the most interesting I've done. Although mostly I have returning clients there are always new ones I am happy to receive. Bad fortunes, good fortunes, what I've learned throughout the years is that we all go through cycles yet I've also learned to tell the difference as to how we all accept and deal with them makes a world of difference in the outcome.
There's something to be said about the way we view people's occupations, careers, life's work, education. We tend to have a preconceived notion about what it takes, what it's like and especially what it's worth and we tend to think we know what their fortunes will be based on those preconceptions. Yet life is not that simple; everybody arrives at what they do to earn a living from different experiences, twists and turns in life and everyody manages their life and fortunes from those very same experiences and learnings. What we witness in our youth greatly influences the way we look at money and the way we spend it. Although it's not from that point of view that we chose our occupations.
We also tend to judge people by what their occupations are and think we know their standing in life and who they are just by their titles. Notice what comes to mind when you hear them: teacher, lawyer, doctor, waitperson, firefighter, president, CPA, dancer, retail clerk, trader, mechanic. You'd think that one might be better off than another just by what the reputation of their occupations is. Yet I'm constantly amazed how incorrect our preconceptions are. I've seen great earnings without savings and I've seen low earnings yet great retirement.
I have not been in the habit of sharing with people what I do for the very reason that being a trader has many misconceptions and is somewhat difficult to explain. Yet this past year I've decided not to hide behind some other titles I've had and found reactions of mostly surprise and awe with only a judgement or two; and mostly I've also found absolutely no understanding about how the markets work. Mind you these very same people think they have total understanding about capitalism. I'd like to say that these comments lead to a spirited discussion about trading and it's contribution to the state of the economy, but alas that is not the case; instead the subject is dropped very quickly with a comment such as "I couldn't do that" . Whatever that means; I've learned not to pursue the subject.
I'm sure I'm not alone being so evaluated as to my worth to society; as I'm sure I'm not alone when admittedly I've sometimes wondered the same. After all, the object is to make money and ultimately the object is to make more money with money. Doesn't sound very creative, until you look at and truly understand what it takes; when you do, you also realize that it contributes to society in a far more outreaching way than most can imagine.
Wednesday, February 6, 2008
I find that for me it's when I am not "upbeat"; my mood is lacking a certain "oomph". A positive note, figuratively and literally. It's when I don't listen to music, it's when I am too much into myself and listening to the old tapes; the ones inside my head. You know the ones, those negative critics we all have inside of us. Don't deny it you do too.
So what brings out the critic, that negative soul which loves to bring us down from a cloud! Is it a bad memory, is it the last bad trade, is it the news? Or is it something so ancient that we cannot quite find its origins; so familiar it becomes a security blanket of sort, a comfortable place of being because after all, if we are convinced that what we'll do will have a negative result, it's best to do nothing. So NOT entering a trade becomes positive or the right thing to do and that's where we get stuck and where the battle is fought.
Like with a Chinese puzzle the more we battle the more we get stuck. The battle so strong that it wears one out as well as wears one down. Negative thoughts build up fear which is a powerful force; so strong that many get paralyzed in it's grip and our critic uses fear well because it uses past mistakes to prove it's point. It becomes extraordinarily hard to find a positive note and if one is presented, it has to be proven inconsequential because when a position is taken, it has to be defended.
That is until I realize that I'm too busy fighting battle instead of thinking how wonderful it is that I have such a critic inside which looks out for my safety. My negative tapes stop playing real quickly when I stop the battle and acknowledge their validity in my life. I don't know about your critic but mine likes that compliment and feeling that it has accomplished its job, fades away letting me go on with living. It's because it's not the battle but life's flow which we seek, so acceptance of ourselves brings us back to the present where action can take place.
What happens after is in itself extraordinary. I notice sunshine, blue skies, and all of a sudden recognize familiar patterns on charts that have proven positive before and almost without effort, the trained eye hand coordination moves in for the kill. Rhythm back, what else is there to do but dance? So, I turn on the music.
Sunday, January 6, 2008
Dancing is individual and yet it's also a commitment to the partner we accept temporarily. It lasts maybe five minutes or so. It's a flirtation, a possibility but not a lifetime contract and we know it for when the music stops and dance is over we look for another partner for the next dance. Or at least some do; for some think that one "yes" means they got you as a partner for the entire evening if not a lifetime.
How about a trade? When the offer is accepted, we join others on the trading floor and depending on the momentum, we swing up or down, turn, elate, tremble as we watch the ticks and the charts and do what's necessary for the successful execution of the trade.
Trading is individual and yet it's also an investment in the company we chose temporarily. It may last a few seconds, several minutes, all day or even a few days but it's not a long term investment that some traders create by clinging to one despite the turning of the tides. Turning a trade into a marriage can be hazardous to your wealth.
Look again at both questions above and imagine yourself looking at a potential dance partner and a potential trade partner. Are you looking at your potential partner subjectively or objectively? In other words do you focus on the look, or the dance; the company or the trade? The best trades are when we remember it's only a dance; a temporary flirtation that, when executed perfectly, can be very rewarding.
Tuesday, January 1, 2008
1 signifies new beginnings, new outlook, leading, goal seeking and reaching. So it is a good year to start assessing your outlook and set new goals for growth. Doesn't mean you throw out the past or the old, but it means you build upon what you have already accomplished moving on from it; and yes, some things have finished and are over and those you let go as you keep what is good and necessary for your onward path.
For me this has always been a hard time of the year, for what it signifies, I have lived from a young age. Dec 25th was the date my family escaped from Hungary. I remember every step of that day and night, too young to realize what my parents had to leave behind, just feeling the adventure not the danger of what I was living. I remember the 1st cup of hot cocoa upon our safe arrival at a Red Cross station and from then on, I remember new wonders, adventures, friendships, sights, tastes and sounds throughout our 2 year stay in Austria thanks to the generosity of a world of people from lands previously unknown to me. Every few months or so we had to leave for another camp enabling me to enjoy living in places others only dream of: Trauskirchen, Steyr, Ried-im-Inkreis, Salzburg, Wien, Innsbruck. From each I took something and brought with me to the USA and from each I had to leave something behind: the meadows in Ried, the beauty of Vienna, the view from my room of the mountain in Innsbruck, and of the Enns river in Steyr, to name only a few. Also many friends fleeting as they were, as we moved on to different locations, lost and some found again. (My dance teacher from Innsbruck arrived in Berkeley year after my arrival.)
I am thankful for those days for they have taught me that change and adventure lie ahead, no matter where we are; and I need that reminder from time to time for I tend to be somewhat of a clinger for the same reasons. I like to hang on to the good not because I'm afraid to let go but because I know some beauty has to be left behind. Yet we need to move on for life lies ahead not behind and staying too long in one place can make us complacent, lazy and unappreciative of what we have or achieved.
Our outlook on life brought forth by our experience tends to rule our style of trading, good or bad. I am optimistic by nature so it's hard for me to enter a short trade; even as I watch it go, I hesitate. The dangerous flip side is that I sometimes hang on the long side too long. Clinging to a trade because I forget that the next trade can offer similar satisfaction if not something better. Trading takes discipline over what we know our weaknesses are and using our strengths that we have brought with us to overcome complacency.
Moving ahead requires something to be left behind; it's a natural law and as a good friend recently told me: Your future is ahead of you not behind you. I've often wondered if I'd have the strength my parents had that long ago, if faced with the same situation. I would hope so, but regardless, I admire and thank them for what they enabled me to experience, enjoy and learn as the result of their courage.