Monday, August 22, 2011

The Daily Note - History Repeats

I just stated in my room that I feel we are back in 2000 again. The year when high flying stocks kept imploding on each high, until there was little or nothing left of their former status. It's not that all companies became suddenly worthless, but for many their cult status dropped and for others, investors along with traders went for the exit doors. That is how values are determined by the mob. Run it up or down by favoritism, not by reality, but it does not last because traders are as fickle as faddy teenagers. Well, maybe a bit less. Still for self preservation, a trader or recent investor must exit or become a long time holder of less and less, unless really well hedged for balance. But hedging does not solve the problem of a company's stature in the eyes of the many.

Slow erosion kills perhaps more painfully than does a quick drop. Slow erosion allows for hope to bloom like a fungus. A quick drop will leave you breathless or maybe even with a survivable heart failure, but it will not allow you to grow cobwebs of indecision rendering you comatose in the end. Comatose where each move is seen but unable to move limb to stop the inevitable further loss.

As markets go, there is still hope in this one, I can read it daily in traders' comments. But what is missed here perhaps is the blame game that keeps growing, slowly paralyzing the markets. It's getting so bad on all levels that I could only recall what I wrote three years ago about the subject. I was also reminded because of the heavy blame that is being played by what seems to me everyone. Blame is easier for many because of the sheer feeling of helplessness, but what I wish to remind people and traders about a simple truth: If you keep blaming others, you will never look at yourself and the situation will continue to delude, but never change.

Happy Trading, Living and Dancing
It's a matter of survival

The Daily Pick - FAZ

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