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Daily Speculations The Web Site of Victor Niederhoffer & Laurel Kenner Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter; a forum for us to use our meager abilities to make the world of specinvestments a better place. |
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3/28/2004
Market Panic by Stephen Vines
Reviewed by Laurel Kenner
"Market Panic" (London: Profile Books, 2003), by Hong Kong writer Stephen Vines, is typical of the financial journalism genre -- built on unquantified truisms and replete with deferential presentations of the thought of the cynical luminaries Buffett and Soros.
Vines attempts to strain out the golden buying opportunities in panics, but founders in descriptions, journalism-variety explanations and useless statistics -- e.g., the average length of time the market has taken to recover from major losses. Tangled in unreconciled threads, Vines's main advice is that the reader should settle on a predetermined limit for profit and losses. It sounds good; unfortunately, it's unhelpful.
A nice illustration of the proper way to handle market panics, updating 1880 conventional wisdom on cane investing, can be found on pp. 42-43 of The Education of a Speculator.