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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5/7/04
Weekly Commentary by Dick Sears
Cross Currents

Lately the market has seemed especially difficult to predict, or to understand after the fact. I think it's because it's being buffeted by so many cross currents.

Among the countless, constantly changing factors that affect market prices these days are the recovery, corporate earnings, interest rates, terrorism, the war and other events in Iraq, and the upcoming election, as well as the usual menu of natural disasters, manmade scandals, etc.

It's no wonder the market is so volatile.

It's no wonder it often seems to move in the opposite direction from what one might expect, turning seemingly good news into a rout, or vice versa (occasionally).

All of this is distressing to the long term investor. It requires a strong stomach to wait patiently for the essentially inevitable gains that come over the long term.

But to speculators, a  hardy breed, volatility means opportunity.

The stock market is one of man's great inventions. It does a thrilling job of reconciling a plethora of variables into the right prices at any point in time.

But it's not perfect. There are always anomalies. The speculator's role is to exploit those rough edges, sanding them smooth in the process.

If you're one of those brave souls, I hope you check in each morning at Victor Niederhoffer's site, Daily Speculations.  Victor, who has been a long time friend to both this site and its author, is a source of great support, wisdom and practical ideas for adventurous investors. 

Returns for Week Ended May 7
Gilder Technology Index (GTI): + 1.8%
Nasdaq Composite Index (NSD):  - 0.1%
S&P 500 Index (S&P):  - 0.8