Jul

1

The specialist in panics, from The Ticker magazine of 1908, went through a three year period while he waited for the steel markets to crack: ten, twenty, thirty percent on the day, and it was very hard for him. All of his friends were making money, and going to Delmonico's and fancy watering spots like the Brighton and Sheepshead race tracks. Even the hack drivers were moving up in the world as they opened up trading accounts too.

Many speculators must feel the same way about the markets now, where the reasons for bearishness seem so flimsy and so labored. First it was an increase in bond yields, but then the bonds went up three points in two weeks, and all yields go to or below, five percent, and the curve isn't inverted any more.

It's the bomb scare in Boston, or the smoking car outside the night club in London, or the other events of this kind that the bears like to jump on to increase the fear factor. When these blow over, it's the hedge fund that lost money, or the lender that called the high risk mortgage market wrong, or the contagion from all those unwanted dollars from foreign sources, or the risk for the layman in derivatives (a'la the Sage), or the risk of a global economic meltdown (a'la the star CNBC Dow 5000 advertiser).

Needless to say, this has been the same beat we've been hearing since 2002, and it's amazing that those who are hoping they can catch the next bear move still have the mojo to communicate and strut after losing so much during the doubling of the S&P that has taken place during these years. Yet they persist, and if it's a slow Friday, they can knock it down a fast 1% in 10 minutes, on a sighting of a stranger or straggler.

I believe the differential between the five percent on bonds, and the sixteen percent on equities, will eventually come through and be of higher significance than the recent end of world stories. Those who wait for that opportune time to get out of stocks, and into the fixed income, as recommended in the (much too harshly reviewed by me) Ken Fisher book, will have no more luck in overcoming the drift in stocks, than all the palookas and poseurs who would have you believe that they see the debacle coming off the back of one or another scare stories.

Of course, this is just my qualitative opinion, and except for the counting on our web site that we have done with the Fed Model, there is no reason that my insights on this should be valid.

Alan Millhone writes: 

A few years ago I was being kind of coached for the then upcoming ACF National Tournament and was asking Dr. Gerry Lopez for some advice on lines I could play at the [checkers] Nationals. One of the lines of play I was considering was not the best and a bit suspect. Gerry told me something that carries over into the market. He said "Alan, why play a weak line? Stick with the best lines and openings that you can vs. your opponent".

In checkers or the market one needs to 'hammer' out your best plan of attack and stay the course. Gerry has told me on several occasions that he has kept a manuscript of familiar mid-game landings that are diagrammed for review and study. Those in the market need to do the same thing and keep careful records for constant reference if one is to keep ahead of the game, or at least even for the most part.

In late July the ACF will be hosting a GAYP (Go-As-You-Please) National Tournament at the Plaza Hotel/Casino in Las Vegas. I am doing my best to study and learn the strongest lines of play either as my opening move or as my rejoinder to my opponents’ opener. Staying with the winners (openings checker moves) would apply to those who follow and invest in the market. Why select a 'shaky' stock when you can find those who are good performers and have the potential for steady growth?

So in checkers find your best lines and stick with same, in the market pick a portfolio of good performers and don't deviate. Just some thoughts from an average checker player.


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