Dec

25

Dr. StrangeloveOr, how I learned to stop worrying and love the market.

The really old people on this site (myself included), will realize that this is a reference to the classic satire film Dr. Strangelove, one of the great cult movies of all time. It presents a scenario as to how simple it could be to effectively start a nuclear war. The storyline is about a Lt. Colonel who goes insane and orders a nuclear attack on the Soviet Union. Only the President of the United States (impeccably played by Peter Sellers) can avert the tragedy. Is this comedy? Is it drama? Stanley Kubrick, who directed the movie, leaves it up to the audience to decide, by marvelously weaving a tapestry of twists and turns that, in the end, leaves the audience wondering: can something like this really happen?

I mention the movie because I am fascinated by the human condition and moreover I marvel at the predictability and unpredictability of man and his impact on the markets. What does this have to do with the speculator? I think this has everything to do with the speculator.

While watching CNBC this morning, I noticed that the staff and producers are reaching into their bag of tricks to fill in air time on a truncated day due in part to the market's being attenuated by closing at 1PM and traders having other thoughts on their minds with visions of sugarplums dancing in their heads. Many have already left their stations and either have taken the week off or might even have taken the rest of the year off.

The show is bringing on the same old tired guests with the same old stories and banging the same old drums. Seemingly anyone who can fog a mirror is invited to appear. Original thought is all but absent. Where is the best place to invest for 2008? What year end strategies should be practiced at this time? On and on goes the same old tired wheel and its grinds and it grinds.

How might the speculator take advantage of this.

First and foremost, I would begin by putting in the effort during this slow time to evaluate the effectiveness of whatever investment strategies you utilized this past year. Now is the time to be brutally candid with yourself and determine where you had your greatest successes where you failed and where you might improve. Most importantly, how did such strategies and methodologies translate in money over the year. How can the successful strategies be replicated and which ones need to be abandoned.

If done properly, this will take some time. It is not a 15 minute exercise. Many of us will not do this as it is far easier to avoid pain than it is to seek pleasure. Or as Al Pacino said in "Scent of a Woman", for me I knew there were two paths that I could take the easy path and the hard path and I chose the easy path because the other one was just too damn hard.

Bear Bryant said The price of success is high. That is why many are not successful. They just do not want to put in the extra effort. They want the success, they just don't want to work for it.

Secondly, if you have not already done so, start your business plan for the next year. Remember there is no time like the present to do this. Also remember that most speculators do not do this. The successful ones do. I believe that the number one reason why people are not successful in investing is that they do not take the time to work on their craft. And many more wait too long to put their plan into place.

Someone also said successful people hate doing the same things that unsuccessful people hate doing but they do it anyway. And if it is worth doing at all, it is worth doing well.

It is an interesting phenomenon that Health Clubs experience their greatest membership increase during the month of January. They also witness the largest attendance to be on the first day of the week. By the end of the week, many health clubs are like ghost towns. The ones who experience the largest results and the ones who treat December like January and Sunday like Monday.

Donald Trump regularly states that the main reason that he was able to survive through the late 1980's and early 1990's and ultimately prosper in the latter years is that he never gave up. He kept pushing onward long after the writers stopped writing about his demise. Say what you will about Trump and love him or hate him, he does have some qualities that can be studied and embraced. Tenacity could very well be one of them.

Thirdly, the speculator understands that in order to be successful that they need to learn to respond to the markets and not react. It is better to respond than react. When a physician prescribes medicine for you, if the results are positive he states that you are responding to the medication, if the results are negative, you are reacting to it. Anticipate and then adjust. Aye there's the rub!

Finally, the speculator understands that there is no quick fix to anything. That investing is a journey rather than a destination and in essence they never arrive the evolve. Markets are to be played by the year and not the day. Work each day with focus and clarity and the year will take care of itself. The highs and lows will ultimately be flattened out and the median will become defined and hopefully, they will experience some joy along the way to make the journey worthwhile.

I hope that this holiday season is one of enjoyment and pleasure and the New Year brings you everything that you hope and dream for.


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