In discussing the importance of deception, Stonewall Jackson minced no words: "Always mystify, mislead, and surprise the enemy if possible, and when you strike and overcome him, never let up in the pursuit so long as your men have strength to follow, for an army routed, if hotly pursued, becomes panic stricken and can then be destroyed by half the number. The other rule is never fight against heavy odds, if by any possible manoeuvering you can hurl your own force on only a part, and that the weakest part of your enemy and crush it. Such tactics will win every time, and a small army may thus destroy a large one in detail, and repeated victory will make it invincible." This quote from the excellent and non-PC book Don't Tread on Me by H. W. Crocker III, bought at the Military Bookman, is similar to one in Education of a Speculator and could have come directly out of Liddell Hart.

It has myriad applications in markets, but let us start with the 23 point drop on 09 01 2009. What could have been more unexpected? On the liberal almanackian's favorite day of the month, the day that is above all completely invulnerable. It started at 11:00 with a nice 15 point drop. Apparently the forces of the bears were marshalled by an invisible hand to destroy the weakest part of the enemy that was fearful because of the random September bias. It would have taken only a few divisions of the bears to mount that attack. And once they were near Mr. Round, it was only a question of when the crush would occur. They did destroy a large one in detail but reinforcements were sent in, perhaps under the generalship of bobby bull.

Ken Drees adds:

Actually the first ambushes occurred on 8/31, one day ahead of schedule, scattering the light rifle infantry trying to hold the flank in sparse woods. They were thus chased into the treelines and foothills on 9/1 and quickly captured, killed or disperse — but, reinforced by better terrain and dug in forces, the maruaders had to retreat, regroup and reassess. A strong down — maybe not fully over?

This well announced September weakness has shrugged off a first assault, but has taken some casualties due to too many non battle days and lax preparedness on the fringe as scouts and light rifle infantry were routed. But now the company has been alerted to the fact of attack — how strong is this force? And how strong are the bull defenders? It's been quiet for three days now.

Victor Niederhoffer replies:

But such moves overcome the least observable difference and therefore are prone to enemy reinforcements as Irving Redel, former chairman of Comex, a mentor, and great man often likes to say.

Irving Redel





Speak your mind

4 Comments so far

  1. david higgs on September 8, 2009 8:54 am

    From James M. McPherson's `Hallowed Ground, a Walk at Gettysburg,' Lee said, "the enemy is there, and I'm going to attack him there." Longstreet replied, "If he is there, it will be because he is anxious that we should attack him; a good reason, in my judgment for not doing so." The market is there, over bought, I will short him there. 50 S&P points higher, the cry still echos and the shorts continue to perfuse, perfusely…

  2. Steve Leslie on September 8, 2009 9:56 am

    If one were to use military history as a template for useful ideas and information, one would be well served to study The Battle of Gettysburg and its aftermath. Much has been written on this subject by great men and women. Readers can draw their own conclusions. I would point to Meade's refusal to attack Lee's forces at the Potomac during a rainstorm and with the river cresting. This prevented Lee from escaping temporarily and thus exposed him to a potential rout and thus shortening the Civil War. Meade was roundly criticised by his actions all the way up to Lincoln. I recall reading about this in the book Lincoln the Unknown by Dale Carnegie. Carnegie studied Lincoln for a dozen years and Carnegie believed that he knew more about Lincoln that almost anyone. Good researching. sl.

  3. Bill Welch on September 8, 2009 2:16 pm

    Didn't Andrew Jackson warn us what would happen to our country if we were went to a International Central Banking System such as the Fed? I was under the assumption that the US Constitution said only Congress has the right to coin money.

  4. Steve Leslie on September 9, 2009 9:03 am

    I am reminded of the famous deception that George Patton did at Calais. He set up a puppet military force to persuade Hitler to mass his troops there leaving Normandy largely unprotected. This allowed Operation Overlord to succeed. Hitler overplayed his hand thus ensuring the beginning of the end of the war in Europe.

    I think on the evacuation at Dunkirk in the summer of 1940 where over 335,000 allied forces were rescued.


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