Sunday, October 26, 2008

Lying to Ourselves

Searching for a passage in a book I've read many years ago, I came across another one I've forgotten. In his book, The Social Contract, Robert Ardrey refers to many examples in nature where it is evident that we lie in order to survive. We, meaning all creatures, lie to each other about appearance and intention quite well. So it is in our nature that we lie well to others. What is a wonder, he writes, is that we as humans lie to ourselves equally as well.

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

Being on the Wrong Side

One reason we all like to follow the trend like lemmings is the fear of being on the wrong side of things. Deep rooted conditioning of 40k + years, have taught us that in order to survive, we must be united against the elements. It made and still makes a lot of sense especially when looking at the markets as we are today. But evolution would not have taken us very far if that is all we did.

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

Cramer is to Trading as Parker is to Wine

They both drive you to the markets, they both compel you to partake in it's offers, they both leave you unsatisfied with what you bought therefore proving that both their opinions are overblown.

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

A Matter of Trust (Part IV)

You remember when you trusted without questioning? When was that last time that you truly could.. how old were you? So then isn't it amazing that so many go to the polls without verifying the claims that the candidates make? Or that we listen to news media reporters and believe what they read off a monitor? Isn't it amazing how many investments people make without verifying claims set forth by analysts, CEO's, TV gurus, trading sites.. etc.? Are you surprised? I am not.

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

Wall Street vs Pennsylvania Avenue or The Government's Dupe Package

We have a Republic.. which means that our elected representatives have to listen to the public via vote/voice but they don't have to go along with what the public wants if they deem it (in their "esteemed educated opinion" ) to be unconstitutional. Unfortunately when it comes to money, the public usually gets it right and the government does not. When it comes to wars, it's the other way around.

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 -

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.