“Stay Starved, Stay Stupid.”
The one thing that worries me as a Trader is how news can be used to disillusion the public. In a time when the proper advise would be to forewarn the public of a possible downturn, reports such as this one below, serve to reinforce the ignorance amongst the less savvy investors:
And only when it is too late, do we see reports like this:
Mind you, these two reports are only 6 days apart, or in trading terms; 4 days only. And how quickly we change our song.
For the longest time, optimistic reports like the first one have been flooding our papers, internet and TVs when the truth has always been less than rosy. Experienced and learned traders knew otherwise and we knew the reasons for such optimistic reports. And we’re not about to complain about it because such reports help us make money from the less informed, ignorant and predominantly sheep-like masses – they will always be one step behind the professionals. Its a mean thing to say but true non-the-less. I make no apology for it because that’s what I am in this business for – to make money.
I worry for the masses, but I might as well profit from them. Since someone has to do it, why not me?
So now the masses run in fear, make panic decisions and do silly things to further compound their ignorance. In the meantime, the pros bide their time and stay one step ahead of the crowd – we’re already in the game to the downside and profitable. Retrospect is a beautiful thing but how do we see it before or as it happens? Simple answer … don’t assume anything and go with the obvious. Simpler answer … never gamble in the market.
Originally Posted by Conrad on Dec 20, 2007: I have had little doubt that Santa would be MIA this year as soon as we got the DFDM earlier this week. And this downtrend is likely to continue into the new year. Yes, I know I sound the the harbinger of crap news but I’m only translating what I see technically and sensibly.
Remember last year?
Originally Posted by Conrad on Dec 3, 2006: All this talk of recession fears, for now, seem premature and I’m going to put it down to pure American paranoia. This could well end up being simply a change in trend … rather, a resumption of the normal trend as seen in the 4 year chart.
Yes we will correct, albeit a little late now, but we will correct. The timing sucks though, as it will totally ruin the Christmas spirit. Analysts will have you believe that the meteoric rise since July was the market “pricing in” the inflationary expectations that would tank this market to an expected level. Hah! Bullocks!
The market has been running up on nothing but bad news perceived as good news that didn’t give the Fed a reason to hike. All the while, the obvious message was “Help me! My economy sucks and we’re going to be in trouble!”
Since the start of the year, analysts and investors have been writing off the January IYC, preferring to stick to the less reliable January Effect instead. I won’t deny that I’ve enjoyed the ride up but its been a scary one, knowing that this is not realistic. That massive tank that started on May 11 (that lost S&P 100 points and dropped DOW 939 points in 5 weeks) was supposed to have been the long awaited correction since 12 Oct 05.
Think about that … 1500 points gained in 7 months with a 900 point correction in 5 weeks on the DOW.
And now we have 1600 point gained in 4.5 months, and the market freaks out with a 160 point correction on Monday.
Let’s get real. Monday was a blip. This market is going to go wild over the next three weeks leading up to Christmas and we should be losing more than 160 points during that time. Whether we tank big time remains to be seen. Personally, I feel that we’ll come out of this volatile period with a new trend that is less steep than the current one and that will be the trend for a while to come after that.
But there is one thing I am sure of … its not going to be a happy trail to Christmas.
During that period a year ago, I had been harping on that fact that the Feb should have raised interest rates in spite of popular demand for a rate cut. In retrospect, it would have been the best thing for the economy and thus, the market. Greenspan was spot on when he shocked the world from Japan this time last year and I am still listening to the man today. If only people had taken what he said more seriously then, rather than to question his right as a former Fed Chairman to speak as freely as he did. So now we prepare to pay the price for our ignorance and denial.
So now, as everybody runs for cover and starts coveting their jobs like a rare commodity, the real traders take their time and start their homework for the next best buy that will make them their next quick million on the next bull run. What are the masses doing in the meantime? They’ll be scratching their heads wondering when is the best time to cut their losses or hoping … no, praying for the next good piece of news to feed their ignorance.
Do you really want the bad news now?
The really bad news is that the masses never learn. This is a fact that makes me happy because real traders know that as long as the masses are there, we will be making money. Sounds ruthless, doesn’t it? If you think its ruthless, then you are part of the mass. So why aren’t you doing something about it?
I know Steve Jobs said, “Stay Hungry, Stay Foolish.” But I’m sure he didn’t mean “Stay Starved, Stay Stupid.”
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