Mar

18

DunceThe current financial "crisis" is somewhat surprising given that less than five months ago the market was at all-time highs. The only other times the market was down in a five month period 10% or 20% was toward the end of the big bear market of 2002. It is interesting to note how the pattern occurrence has shifted to the period more at the end of the 2002 bear market rather than the peak period of 2000 where many of the patterns had been showing up. It is not statistically significant by any means, but a good example of what I discussed under the idea of precedent or case-based reasoning. Overlapping occurrences show that 100 days out there is a good probability of a significant rise in the market after a five-month 20% drop.

Sometimes when I go out and around in public I look at people and think to myself, "Gee, they look kind of stupid." They probably think that about me too. Dr Goulston and Dr Dorn would rightly advise that compassion is better. They are right. But when I see what goes on in the market sometime I think to myself, "Gee, that is kind of a stupid thing to be doing." Like a 27 point gap down. These are opportunities that seem to occur with more frequency than one might think, given all the sharp operators out there. Sometimes its just a matter of sitting around waiting for such an opportunity. I do stupid things in the market too and berate myself over the stupidity, "What was I thinking." In the context of the evolutionary fray this is acceptable and expected as out in the wild. Tomorrow there surely will be some silly things going by both the Fed and the market. Hope I don't do something stupid.

Nigel Davies adds: 

There are helping professions (psychologist, doctor, clergyman) and predatory ones (chessplayer, trader, lawyer). Those with predatory professions shouldn't feel bad about seeing the worst and trying to exploit it. It's just part of our job in the rich tapestry of life.

Stephan Jovanovich replies:

GM Davies is too modest. The predations of the professionally helping can be the worst of all precisely because, far too often within the confines of their safe authority, there is no second opinion. Like the school teacher the professional helper almost always has the last and final word. Traders, chessplayers and lawyers have to battle it out. Without their examples of contest, we would have no idea of liberty.


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