Predictions VS Facts; Teeter, but don't Totter.
May 18, 2010
– Comments (17)
I'm a bull by trade, but most smart bulls know when they've been penned in and the jolt form the electric fence has more sting to than that grass or another look at that Jersey Gal across the fence is worth. Their day will come.
The bears had a lot of fun on May 7th with a little help from some computer routines or some human idiots. They will get some fun in from time to time. What some people still don't realize is that the programmed stops are set to occur at different hours of the day and at 2:30 the locks are off. I'm not too concerned about another computer errant adding to the mix, but humans can cause even more errors. After all they wrote the programs.
I generally see little good by giving unsubstantiated predictions. We have Crammer and thousands of other pundit for that. (Putting it in "nice" terms).
Still, keep in mind a few good trading guidelines:
1. You can't catch a falling knife. ((Well you can, but expect it to hurt).
2. The trend is your friend.
3. Be greedy when others are fearful.
4. Be fearful when others are greedy.
5. 60% of the traders in the market the last year or two are retail investors with little investment experience.
6. Many investors are idiots.
7. The market is an idiot.
8. People kill, guns don't.
9. Don't be an idiot!.
Here are some other trading remnants in no particular order.
1. Germany banned naked shorts. I'm not clear why the market cares.
2. The Senate/House is getting ready to crack down on banks, including interest rate caps on credit cards. Some pundits think banks might lose 30% of potential income. So what if their trading houses were 30 days out of 30 on their investments.
3. The Euro is dropping like a rock. Loaning Money to Greece was expected to stabilize things, but where is the money is the money coming from and where is it going?
4. If stocks become a bad investment then we usually have a flight to Treasury Bills. The US is printing money as fast as the presses can run. The ink barely dries. What happens if US governement debt gets downgraded?
So the market thinks it has lots of excuses to sell, but where does it put the money.
Other trading remnants; Investment houses, hedge funds, investors are sitting on Trillions. Fresh money goes into 401K's for investments monthly. Yes, unemployment is high, but money is still sitting in big piles. Investment managers get graded on their returns.
So?? We have a market with a reason to sell. We have investment managers with cash to invest. WE have less than educated retail investors jumping in and out.
What else do we have? We have US Firms with record earnings. Technology producing new products, banks trying to game the system for more record earnings. The governments of multiple countries butting into the flow.
Teeter Totter = See Saw ; As one side goes up the other goes down. Sometimes you get balance.
A plan?
Have a plan? Regarding a plan. Did you know that doing nothing is always an option. Many people don't put "doing nothing" on their decision tree, but they end up doing anyway. Doing nothing can be part of a plan or it can "just happen" due to a lack of making any other decision. Sometimes, "doing nothing" can be a good option, sometimes it turns out being a less desireable option.
Is there something you had been looking at buying but it got a bit pricy for you. How would you feel if you caught it at a substantial discount even in a falling market. Have you ever put bait on a hook when you had no idea if the kind of fish you favored even live in the stream or brook?
Do you own an equity that really, really have analyzed and you feel it's a great deal at it's current price or would be even at a slightly lower price? If so, put it behind a combination lock that will take you a few minutes to open.
So? The point. I don't have one, remember, I don't make unsubstantiated predictions. Be careful tomorrow, (Wednesday 19 May). It will be a memorable day for some people Don't Teeter if you Totter. Play nice, but within the full range of the rules.
The Sky Isn't Falling Today. I doubt it will fall tomorrow, but some people might think it is. Funny thing about Chicken Little. If you believe something is about to happen and you convince others it is about to happen then you have a form of someones reality.
Hmm...check out that Jersey cow on the other side of that fence. Sometimes a little electric shock is worth it! Gotta Go!
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