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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The Common Law, by James Sogi

The common law handed down from England 1000 years ago forms the basis for much of American jurisprudence. The common law takes prior experience and judgment as a basis to judge the present. The common law from prior cases that is "on all fours" has the facts, the law, the issue and the outcome all exactly the same as the present situation. More often than not, however, the present situation does not quite match the past, or any situation that has ever arisen in the past. This is because we live in history, and it constantly unfolds in unique ways. The law then looks to broader principles to judge the specific case at hand and judgment is rendered.

Take for instance the 16 out of 18 down closes. What judgment is proper when the situation is new, different than what has happened before. The Founding Fathers broke new ground in establishing the rules for the new country and looked to the broadest natural principles of natural law, and adopted the basic natural inalienable rights of man as the general principles upon which to base the new nation. Things looked pretty bad back then. They were hanged, and the country was bankrupt. What might a trader do when faced with an unprecedented run of down closes. I say look at the broadest principles of the market, the economy, and mankind, that the optimists will triumph and that the ingenuity of man will prevail as it has for one million years, for the last 20,000 years, the last 1000 years, and the last 100, and the last 10.

Emitte lucem et veritatem - Send out light and truth