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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Trade Like a Komodo Dragon

Browsing through an old copy of Natural History Magazine, (11/03) the first thing you see is the huge two page AIG ad that says "Be lulled into a true sense of security" Ha ha. A good ad campaign before last week's 10 point drop. The cover shot is of a komodo monitor lizard: Editor Peter Brown says of them, Marvelous Monitors "Not everyone will find the face of the Komodo Monitor pictured on this month 's cover as endearing as I do, but the creature is certainly a poster child for a group of predatory lizards so wily and intelligent that the epithet "mammal like" has become a cliche among herpetologists. Ecosystems don't even harbor small monitors and small placental carnivores at the same time. The reason may be that the two groups play such similar roles. What I find particularly fascinating about small monitors is their success as cold blooded (more aptly ectothermic) animals. They can move about all day, and they can strike like lightning when simply living than do their mammalian counterparts. The Monitor story spotlights a basic lesson of biology: there are many ways to thrive in a threatening world." I really like the market analogy of being wily, intelligent, and able to move about all day and strike like lightning when simply living. If not yet a dragon in the market, maybe being a mini dragon like the komodo monitor is good. Stay cool when the market is cold, and strike like lightning when it's hot (more aptly ectothermic) Be cold blooded and steely eyed on the trade. Edge out the soft furry placental carnivores.

The article goes on: "Predators and their prey are locked into a co-evolutionary arms race in which any advantage gained by one calls for a countermeasure by the other. Less sophisticated or perhaps just unlucky prey individuals perish.....Similarly, competing lineages of predators -cats and foxes-for example- are also subject to the Red Queen's dictum that "it takes all the running you can do just to stay in the same place." Right, I know about that! The article ends with ,"Human beings are fortunate to share this planet with such extraordinary animals and we should try to learn from them whatever we can." And so we do.