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.





Speak your mind

4 Comments so far

  1. jeff on March 18, 2008 6:31 pm

    Recent events in my life forced me to bail out of all of my positions last week. I’m glad I missed out on the carnage, because I’d lay even money that I would do something really stupid…Mistakes have been following me around like the plague as of late. Who knows, maybe the fact that I’ve got a lot of idle cash laying around is doing something stupid…..without doing anything at all.


  2. Lon Evans on March 19, 2008 3:32 am

    Mr. Sogi,I can't deny that the market "bottomed" mid-2002, but what was the catalyst igniting the Bush bull market that has so recently collapsed?I recall that it began just about the time we started raining smart bombs on Baghdad (circa spring, 2003). For industrialists, war is easy money, other people's money. Is a war on Iran our next best chance towards a recovery?All of which goes to support the thought, "Hope I don't do something stupid." lon

    p.s. Nigel, You might possibly have not heard of certain predatory practices demanding recompense from the Catholic Church in America. Quite an ugly legacy, and hardly a helping one.

  3. Nigel Davies on March 19, 2008 12:47 pm


    Why pick on the US priesthood when there are Brits like Harold Shipman around? Or your guy Lechter. I really hope you're not about to follow up the Asperger outage with details of your childhood career as a choirboy. Don't do it Lon, don't do it..


  4. Doubt That on February 26, 2009 9:49 pm

    Really, I can’t get a second opinion from a doctor, shrink, or priest? It’s just part of our job in the rich tapestry of life? What does that even mean? This website seems to be nothing more than a lot of semi bright, semi monied guys spending a lot time wondering about things. If you were brighter you might come up with solutions instead of waxing philosophic about some life changing Ann Rand book you read back in college.


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