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17-Oct-2006
The Four Stages of Denial, by Victor Niederhoffer

I found MIT professor Jim Dezieck's article on the four stages of denial helpful in understanding the wholesale changes in psychology coming into the market now. It's a "get me in now " market, says Michael Santoli in The Trader and "we are in one of those aberrational stock markets that treats everything that happens as bullish... and... mind you we're not complaining, but simply marveling at such admirable insouciance (of the bulls)... and perhaps this attitude has something to be said for it. After all, bad things are always going on somewhere in the world, and the world was still here," says Alan Abelson. All is need to see now is "Damn my broker. Cover my shorts", and I'll actually become bearish. Right now, I have my maximum short positions on ever. However, even at my most bearish, I am still net long. I never hold a net short position as I have been unable to find empirically, economically, statistically, or pragmatically a prospective opportunity to overcome the drift against the short side