Sep

19

As rates begin to rise towards a more normal level in the years ahead, what do you think will happen ? What are the implications for money managers using futures? I wrote an article last Spring entitled  CTAs and Rising Interest Rates: Is the Party Over?   [19 page PDF].


	

	

Feb

4

 One notes that music on the radio often coincides in tempo and volume with the market movements. That's because of changing stations at the hour. Certain music mirrors the market. The funeral march or the second movement of the Third Symphony is always playing when one is about to be sent to Davey Jones's Locker. That's because one's colleagues put that music on when the reaper appears.

My dentist asks me to let him know in advance when I have an appointment because the market always goes way down on the day of the appointment and he'd like to sell short. The reason is that I see him on Mondays. I make the appointment after a lull in the market. But the market reverses. So after it's up and I make an appointment it's likely to have a day like yest.

A little woman was known to have romance with a poor speculator. She says, "are you sure we can afford it? We always lose when you are indulged." The reason is that one requests the possibility on those rare occasions when the market has not had a big down day in a few months. That's always the time for it to stick in the big decline.

One occasionally attends to the necessaries in the chamber. The market is always likely to drop 7 figures against you during that time. The reason is you choose the relaxed moment. Always expect an ambush from the Apaches when you would never expect it.

Certain hoodoos always call asking for money when the market is in a terrible tailspin. They need money badly during that time. Other people do also. The lack of liquidity causes them to ask for money and also causes the market decline.

One never makes money in the evening the same way. The market knows you can't stay up 48 hours straight. Only 24 hours. By the time Europe has digested yesterdays' move, they can consult with the other centrals and take corrective action.

A vacation is always the time for a drastic reversal in your fortune your appointments during market hours will always have to be canceled because it will turn way against you. Same reason as above.

Whenever you have a big positions, the headlines on the tv and screen will have a story drastically against you. The news follows the price. Your brother or you will always have either the best or worst year. The principle of ever changing cycles.

What other unusual consiliences that really are due to logic and probabilities illuminate and enliven your market days?

A brother writes: 

Good hypotheses possess four qualities:

1) Falsifiable (can be easily proved wrong)
2) Causal (if possible there should be a reasonable causal link between independent and dependent variable)
3) Parsimonious (few variables)
4) Robust (as broad as possible)

It would be interesting to rate your many hypotheses above on these characteristics.

Oct

16

 To the Tune of American Pie by Don McLean.

A long long time ago
I can still remember how
The Bush expansion made me smile.
I knew the unemployment rate
Would safely stay near 4.8
And just a few were jobless for a while….

But Autumn- Oh Eight made me shiver
With each statistic they'd deliver
Bad news on the doorstep,
The Fed would ease one more step.
I can't remember if I cried
When they put in Barack and his bride,
But something touched me deep inside,.
The day the market died….

So…

Bye, bye to the G-D-P pie
Bailed out Chevy, passed a levy,
But the plan went awry.
And good ole Ben would raise the money supply…
Thinking this won't cause the dollar to die,
This won't cause dollar to die…

(etc)

Oh did you read the book of Mao,
And do you have faith in Keynes right now -
If Obama tells you so?

Now do you believe in stimulus?
Investments for some solar bus
With G-D-P expanding oh so slow….?

Mike Lewis is in love with him…
Cause he saw playing in the gym
They both took off their shirt…
The romance makes me hurt…

I was a lonely teen objectivist,
Never dreamed of operation twist,
But I knew things would go to schist….
the day… the dollar died….

[REPEAT CHORUS]

Now for four years we've been on our own,
And Reid grows fat upon his throne,
But that's not how it used to be.

When the Gipper told the Red Premier
"Just tear that wall down, do ya hear?"
And his voice inspired you and me…

But while Ron Reagan's health was down,
Slick Willie stole the Bushes crown.
The right way was adjourned…
To "progress" we all turned.

While Barack read Alinsky's tome
And told us Kenya was his home…
The right won Congress all alone
Before the dollar died…

[REPEAT CHORUS]

Helter skelter impeachment swelter
With "What IS IS" he tried to shelter…
Eight miles high and falling fast…

With the pepper pot he'd  made his mess,
She smoked cigars in her blue dress.
But the Newt stood on the sidelines in a cast.

Now the half-term air was filled with doom
The Starr commission left the room…
The Right got up to dance,
But they never got the chance,
When the elephants had left their cage,
They faced the Democratic rage,
But soon they'd usher Dubya's age
To rise, the dollar tried….
We were singing…
[Chorus]

Oh, and there we sat to watch the race
It looked like Al took second place,
With no time left to vote again….
So Gore be nimble Gore be quick,
Gore poked chads with a long green stick,
Cause lawyers are the donkey's only friends…

And as Scalia took the stage,
The Times erupted in a rage,
The Bushes were not burned.
No verdict overturned.

And as the stocks climbed up to record height
And Greenspan's rates were never tight
The subprime lenders would delight….
The day the dollar died…
We were singing…

[Chorus]

I'm from a state that voted blue,
Our debt repayment's overdue
There's just no chance that we can pay.
I went back to the sacred book
Where Dagny visits John Galt's nook…
But the Rand there said Bernanke must go away.
And in the streets the hippies screamed,
They Occupied, of Marx they dreamed.
No Austrian was spoken,
The markets all were broken.
And the three men that we can't forget,
Milt Friedman, Mises, and Fred Hayek…
They bought some Bitcoin on the net
The day the dollar died…
They were singing.

Bye bye to the G-D-P pie,
Bailed out Chevy, passed a levy but the plan went awry,
And good old Ben will raise the money supply,
But he's gonna cause the dollar to die,
Better vote for R-O-M-N-E-Y!

Sep

20

 i almost beat your record points in scrabble with 104 points with disquiet. i scored bingo points and triple word score and double letter score on my u. love, aubrey

Uncle Roy replies:

WHOA!! Good work! I can't wait to play with you sometime. Here are some helpful tips:

Make sure to think about having even numbers of vowels and consonants in your rack after you play your word - so on your next rack you won't have all vowels or all consonants.

Leaving double letters in your rack for next turn is usually bad, except E which is only a little bad.

Try to score at least 60 points with each blank you get.

Learn all the 2 letter words (there aren't that many") and play words parallel to each other for extra points.

On your first move, if you don't score 18-20 (including the double word), pass and draw new tiles to try to get a bingo if you think you're close.

QI and ZA are very useful… and don't forget trying to use X on a triple in two directions which scores 52 at a minimum.

Think about what you "leave" in your rack for next move. If these letters are "good" letters like ETAION SHRDLU (the most common letters in English words), you're likely to draw some more of them, and then be able to make a bingo.

Unless you have two S's,don't use an S unless it is an above average score (for you) - usually average is about 20 so try to make S really count.

Good players get an average of 1.5 bingos per game. You should be getting at least an average of 1 for now… and 1.25 when you learn some more words as you get older.

At the end of the game, think whether the other player has a Q, Z or X. If they do, don't get let them play them by making ZA or QI or QAT.

Here is a list of two and three letter words which is worth learning.

I love you! See you very soon!!!!

Love Uncle Roy

AA AB AD AE AG AH AI AL AM AN AR AS AT AW AX AY BA BE BI BO BY DE DO ED EF EH EL EM EN ER ES ET EX FA GO HA HE HI HM HO ID IF IN IS IT JO KA LA LI LO MA ME MI MM MO MU MY NA NE NO NU OD OE OF OH OM ON OP OR OS OW OX OY PA PE PI RE SH SI SO TA TI TO UH UM UN UP US UT WE WO XI XU YA YE YO

——————————————————————————-
AAH AAL AAS ABA ABO ABS ABY ACE ACT ADD ADO ADS ADZ AFF AFT AGA AGE AGO AHA AID AIL AIM AIN AIR AIS AIT ALA ALB ALE ALL ALP ALS ALT AMA AMI AMP AMU ANA AND ANE ANI ANT ANY APE APT ARB ARC ARE ARF ARK ARM ARS ART ASH ASK ASP ASS ATE ATT AUK AVA AVE AVO AWA AWE AWL AWN AXE AYE AYS AZO

BAA BAD BAG BAH BAL BAM BAN BAP BAR BAS BAT BAY BED BEE BEG BEL BEN BET BEY BIB BID BIG BIN BIO BIS BIT BIZ BOA BOB BOD BOG BOO BOP BOS BOT BOW BOX BOY BRA BRO BRR BUB BUD BUG BUM BUN BUR BUS BUT BUY BYE BYS

CAB CAD CAM CAN CAP CAR CAT CAW CAY CEE CEL CEP CHI CIS COB COD COG COL CON COO COP COR COS COT COW COX COY COZ CRY CUB CUD CUE CUM CUP CUR CUT CWM

DAB DAD DAG DAH DAK DAL DAM DAP DAW DAY DEB DEE DEL DEN DEV DEW DEX DEY DIB DID DIE DIG DIM DIN DIP DIS DIT DOC DOE DOG DOL DOM DON DOR DOS DOT DOW DRY DUB DUD DUE DUG DUI DUN DUO DUP DYE

EAR EAT EAU EBB ECU EDH EEL EFF EFS EFT EGG EGO EKE ELD ELF ELK ELL ELM ELS EME EMF EMS EMU END ENG ENS EON ERA ERE ERG ERN ERR ERS ESS ETA ETH EVE EWE EYE

FAD FAG FAN FAR FAS FAT FAX FAY FED FEE FEH FEM FEN FER FET FEU FEW FEY FEZ FIB FID FIE FIG FIL FIN FIR FIT FIX FIZ FLU FLY FOB FOE FOG FOH FON FOP FOR FOU FOX FOY FRO FRY FUB FUD FUG FUN FUR

GAB GAD GAE GAG GAL GAM GAN GAP GAR GAS GAT GAY GED GEE GEL GEM GEN GET GEY GHI GIB GID GIE GIG GIN GIP GIT GNU GOA GOB GOD GOO GOR GOT GOX GOY GUL GUM GUN GUT GUV GUY GYM GYP

HAD HAE HAG HAH HAJ HAM HAO HAP HAS HAT HAW HAY HEH HEM HEN HEP HER HES HET HEW HEX HEY HIC HID HIE HIM HIN HIP HIS HIT HMM HOB HOD HOE HOG HON HOP HOT HOW HOY HUB HUE HUG HUH HUM HUN HUP HUT HYP

ICE ICH ICK ICY IDS IFF IFS ILK ILL IMP INK INN INS ION IRE IRK ISM ITS IVY

JAB JAG JAM JAR JAW JAY JEE JET JEU JEW JIB JIG JIN JOB JOE JOG JOT JOW JOY JUG JUN JUS JUT

KAB KAE KAF KAS KAT KAY KEA KEF KEG KEN KEP KEX KEY KHI KID KIF KIN KIP KIR KIT KOA KOB KOI KOP KOR KOS KUE

LAB LAC LAD LAG LAM LAP LAR LAS LAT LAV LAW LAX LAY LEA LED LEE LEG LEI LEK LET LEU LEV LEX LEY LEZ LIB LID LIE LIN LIP LIS LIT LOB LOG LOO LOP LOT LOW LOX LUG LUM LUV LUX LYE

MAC MAD MAE MAG MAN MAP MAR MAS MAT MAW MAX MAY MED MEL MEM MEN MET MEW MHO MIB MID MIG MIL MIM MIR MIS MIX MOA MOB MOC MOD MOG MOL MOM MON MOO MOP MOR MOS MOT MOW MUD MUG MUM MUN MUS MUT

NAB NAE NAG NAH NAM NAN NAP NAW NAY NEB NEE NET NEW NIB NIL NIM NIP NIT NIX NOB NOD NOG NOH NOM NOO NOR NOS NOT NOW NTH NUB NUN NUS NUT

OAF OAK OAR OAT OBE OBI OCA ODD ODE ODS OES OFF OFT OHM OHO OHS OIL OKA OKE OLD OLE OMS ONE ONS OOH OOT OPE OPS OPT ORA ORB ORC ORE ORS ORT OSE OUD OUR OUT OVA OWE OWL OWN OXO OXY

Continued here

Dec

6

(slightly modified by me).

Don't approach a goat from the front, a horse from the back, or a hoodoo from any side.

Oct

26

A song I wrote probably in 1988 or so while working at NCZ:

(to the tune of Bad Bad Leroy Brown)

 
Well on the West Side of Manhattan,
There's a trader with lots of fame
The markets fade,
When he begins to trade
George Soros, is his name
Well, Soros, he's a TRADER,
He loves to take a chance,
He trades the swiss and yen
whenever he can,
He moves markets with just one glance,

And he's the Big, Bad Quantum Fund,
Trading Volume it's number one,
Bigger than Tudor Jones,
They move markets all alone,

Now Friday, bout a year ago,
Stocks went way down low,
George said, why,
I'm gonna buy,
Cause upward they will go.
Well the market crashed that Monday,
But Soros was filled with mirth,
The Fund was down a BILLION BUT, he still had
HALF of his net WORTH.

And he's the Big, Bad Quantum Fund,
Trading Volume it's number one,
Bigger than Tudor Jones,
They move markets all alone,

Now Soros, for a billionaire,
his thinking is a bit bizarre,
He talks about nothing but equality,
As he's riding in his fancy car.
He spends a lot of time in China, now,
Says he's opening the markets there,
He says he's doing a service for our Asian friends,
But in the profits, George will share,

And he's the Big, Bad Quantum Fund,
Trading Volume it's number one,
Bigger than Tudor Jones,
They move markets all alone,

Now the Quantum fund was in need of help
Goerge wanted it to earn more cash,
A man called Victor said,
It's your fault,
That you lost it in the Crash.
George he hired a trading genius,
Krieger was his name,
He's an Indian Guru,
But it didn't help,
Cause he lost money just the same

And he's the Big, Bad Quantum Fund,
Trading Volume it's number one,
Bigger than Tudor Jones,
They move markets all alone,
Yes he's bigger than Tudor Jones,
He moves Markets All Alone

Victor Niederhoffer sends:

(To the tune of Suddenly Seymour)

Suddenly Soros
       wrote in the FT
       That he sees weakness
           In the S & P
               Soros and El Erian
                   are bearish on spu's…

etc. etc.

Jul

25

 A marvelous passage from A.J.P. Taylor’s English History; 1914-1945? :

Until August 1914 a sensible law-abiding Englishman could pass through life and hardly notice the existence of the state, beyond the post office and the policeman. He could live where he liked and as he liked. He had no official number or identity card. He could travel abroad or leave his country forever without a passport or any sort of official permission. He could exchange his money for any other currency without restriction or limit. He could buy goods from any country in the world on the same terms as he bought goods at home. For that matter, a foreigner could spend his life in this country without permit and without informing the police.

Unlike the countries of the European continent, the state did not require its citizens to perform military service. An Englishman could enlist, if he chose, in the regular army, the navy or the territorials. He could also ignore, if he chose, the demands of national defence. Substantial householders were occasionally called on for jury service. Otherwise, only those helped the state who wished to do so.’

‘The Englishman paid taxes on a modest scale; nearly $400 million in
1913-14, or rather less than 8% of the national income. The state intervened
to prevent the citizen from eating adulterated food or contracting certain infectious diseases. It imposed safety rules in factories, and prevented women, and adult males in some industries, from working excessive hours. The state saw to it that children received education up to the age of 13. Since 1 January 1909, it provided a meagre pension for the needy over the age of70. Since 1911, it helped to insure certain classes of workers againstsickness or unemployment.’

‘This tendency towards more state action was increasing. Expenditure on the social services had roughly doubled since the Liberals took office in 1905. Still, broadly speaking, the state acted ony to help those who could not help themselves. It left the adult citizen alone.’

‘All this changed by the impact of the Great War.’

Jul

15

Robert GroveRobert "Lefty" Grove became a 300-game winner by staying as consistent off the baseball field as on it.

His rules for success were simple: "Attend to business. Eat regularly, get at least eight hours' sleep — especially from 10 p.m. to 2 a.m., when sleep is soundest — and observe moderate habits. Don't 'know it all' — give the other fellow credit for a little knowledge."

His discipline paid off. Grove (1900-75) had the lowest league earned run average nine times, which remains a major league record. An advocate of physical fitness, he won four of his ERA titles when he was past 35 years old, winning 97 games in that period.

A winner of 20 or more games in seven straight years, Grove had a career major league won-loss record of 300-141 while pitching for the Philadelphia Athletics (1925-33) and Boston Red Sox (1934-41). His .680 winning percentage is the best among 300-game winners.

Grove was named the 1931 American League Most Valuable Player and was elected to the Hall of Fame in 1947. He was selected to Major League Baseball's All-Century team in 1999.

A pitcher can be successful past age 35 if "he takes care of himself and trains properly. He can't, however, wait until he's passed his prime to become serious about the business of staying in shape," Grove said in "Lefty Grove: American Original," by Jim Kaplan.

Grove maintained his effectiveness on the mound by sticking to a routine. "I've followed practically the same schedule during my 16 years in the majors. I'm active on the ballfield every day during the season. Except on the afternoon I'm pitching, I chase flies in the outfield before every game. And I throw on the sidelines every (day) except the day I pitch," he said.

Grove was born in Lonaconing, Md., and grew up watching his father and older brothers make their living in the coal mines. He didn't want that for himself.

Grove's Keys

- Amassed a 300-141 record.
- "See that chalk mark on the barn door? I measured off 60 feet … and at 6 o'clock every morning I hit the chalk mark 20 times before I quit. Then I tramp the hills hunting and cover about 20 miles a day."

So he worked at his passion: baseball. On the mound, he had a well-earned reputation for fierceness.

"The guy was a winner. He gave the maximum effort every time out. … His rages were never directed toward the players, but toward himself. He was a competitor," said Red Sox teammate Bill Werber.

"You never talked to him on the mound," said A's teammate Jimmy Dykes. "No matter if he was ahead by 10 runs or behind by one, he was just plain fierce during a game."

 

article by Michael Mink from investors.com

Nov

21

see graph.

The uncle follows up on December 2, 2008:

I think the relevant part of this chart is missing - the point of the chart was that on so many occasions (I think it was approx. 50% of the time) the stock market closed the year within 3 percent of the high, but only closed within 3% of the low one time (1914);

The data I wanted to post included a second chart of the closes from the high.

The editor notes:

the second chart was published on December 2.

May

7

I recently found this article on Science Daily about the effects of sleep deprivation on competent decision making. It suggests that:

… sleep deprivation can adversely affect a person's decision-making at a gambling table by elevating the expectation of gains and making light of one's losses following risky decisions. 

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