The Speculator's Corner
TSC Readers Send Sensational Proverbs and Win Wine!
By Laurel Kenner and Victor Niederhoffer
Special to TheStreet.com
2/17/00 4:18 PM ET
URL: http://www.thestreet.com/comment/thespeculatorscorner/886175.html

We ran some short market observations and proverbs in our "Nobody asked us, but ..." column last Thursday that contained some bittersweet lessons from the trading life. We invited readers to send us their own, and promised a bottle of 1987 vintage wine to the winner.

We received more than 100 submissions, many with much wisdom and humor. In appreciation, we increased the number of prizes to five. We'll be sending post-crash bottles via Wine.com (a candidate for a high price-letter ratio if there ever was one) assuming we don't run afoul of state liquor-control laws.

The first prize goes to:

Don Staricka of Glendale, Calif., for a collection of definitions in the tradition of Voltaire, Ambrose Bierce and H.L. Mencken. He believes they are original, and is writing a book of them for his own amusement. We're privileged to publish a sample:

• Stop Loss -- The point immediately below which an equity begins a sustained rally.

• Interest Rates -- An all-purpose explanation for whatever happens.

• Momentum Play -- An investment decision informed by the theory that what goes up must go up.

• Turnaround Play -- An investment decision informed by the theory that what goes down must go up.

• Value Play -- An investment decision informed by the theory that what has been down for a long enough period of time must eventually go up.

With his grasp of value plays, Staricka probably could answer the rhetorical proverb submitted by Tom Vayda, winner No. 2:

• If a value manager is standing in the woods touting stocks and nobody is there to listen, is he still wrong?

The good news is that James R. Lackey, winner No. 3, has solved the problem of being wrong. Poking fun at technical analysts' nonfalsifiable predictions, he submitted the following:

• We are in a trading range of 7000 to 12,000.

We've noticed that a humble self-evaluation usually follows:

• As predicted, the market was range-bound yesterday, but we were two points too high in our lower range.

There's certainly quite enough Wrong! out there to go around, and the uncertainty of the trading life inspired some observations that struck sympathetic chords with us.

"Clicking 'quote refresh' will not make your stock rally," writes John Baca, winner No. 4. We've noticed that, even with live monitors, John.

And Rainey Hancock, winner #5, inquires:

"Have you ever noticed that when you buy a stock, you pay the high for the day ... and when you sell a stock, you receive the low for the day?" Yes, Rainey, we sure have.

We received so many great entries that honorable mentions are in order. Vic, who is still boycotting Thai restaurants, appreciated the following from Mitch Schlesinger, who identified it as a Wall Street saying:

• An emerging market is one from which you cannot emerge in an emergency.

Many of our readers find television news coverage somewhat banal, and have devised "tells" to get to the heart of the matter. For example, Subodh Nijsure always knows when there's good news because CNBC's "Bond Babe" gives a wide smile. "If she puts on her bifocals and tries to read into the report, it is worse than expected, and she is looking for reasons it should be discounted."

On the subject of bad news, we hoist our sails to Essan Soobratty, who draws these lessons on investing and trading from the Titanic:

1. The downside was not immediately apparent.
2. It went underwater with amazing speed despite assurances it was unsinkable.
3. Only a few rich folk got out in time.
4. The structure looked iron-clad.
5. No one really understood the risk.
6. The disaster occurred overnight, London time.
7. No one spent much time monitoring the risk.
8. People spent a lot of time trying to bring the thing back above water.
9. The people who actually made money were not in the original deal.
10. Despite the disaster, people still love cruising around the same waters on ships.

Vic, who has a collection of Titanic paintings and memorabilia in his trading room, likes to recall what the stiff-upper-lip English gentlemen said to the ship's squash coach just as the water flooded the deck: "I trust our lesson tomorrow is canceled."

Thanks to all for participating. It has been a great joy for both of us to receive so much positive feedback from our readers. We particularly appreciated our winner Staricka's remark: "Any journalists who can incorporate references to Beethoven's thematic contrasts into their comments about the stock market deserve my attention." Yes, the great composer lives on in all markets, and flattery will get you everywhere, Don.

We end this column with a thought from a reader with the Internet handle Mdils48289, courtesy of the Al Pacino film Scarface:

• Every day above ground is a good day.

Speculator's Scorecard # of Days Up (YTD) # of Days Down (YTD) # of Days in Latest Streak (winning or losing) % Change (YTD) Dow 15 17 Lost 1 -8.0 S&P 500 15 17 Lost 1 -5.4 Nasdaq 21 11 Won 4 8.8 DAX 20 14 Won 1 11 Nikkei 18 13 Won 2 3.2 Yen 16 15 Lost 2 -7.2 Euro 17 16 Won 2 -2.1 Gold 17 16 Won 1 7.2 Oil 19 12 Lost 2 21 Bond 17 15 Lost 2 3.0 Bund 15 15 Lost 3 -1.3

Laurel Kenner is a former markets editor at Bloomberg, and a trader. Former hedge fund manager Victor Niederhoffer is currently a private investor and author of Education of a Speculator. At time of publication, Kenner was not long any of the issues in this column, while Neiderhoffer held a net short position in S&P 500 futures and options, although positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While they cannot provide investment advice or recommendations, they invite you to comment on this column at mailto:%20commentarymail@thestreet.com.