Jan

30

 1. One is interested in the thoughts as to whether Ford is a good buy now. It would seem that we must have reached the stage where when a company doesn't beat e expectations and it is hit down, there must be ample opportunity to pick up a few bargains, but my former partner likes to point out that my knowledge of automotive is typified by once asking if BMW is a British motor to a very august Teutonic personage. I have subsequently learned that BMW is very useful for remembering the order of the 3 cross Brooklyn bridges, where I often take Aubrey by bike for banana splits at the ice cream factory.

2. It is interesting to read Fred Waitzkin's biography of Kasparov where Kasparov will tell Waitzkin out of the clear blue sky that this is the same landing that occurred in a 1964 game, and Waitzkin pretends to be savvy and somewhat appreciative. The same thing must happen as we talk about what happened in 07 or 97 or 87 or 29, and point out how present similarities are related to it. The liberal that our former consulting psychologist works for is famous for having noted that the first month of 1987 was similar to 1929, and thus he became very bearish, and knew that Oct 19, 1987 was going to be a disaster, and the former partner of the palindrome then used this to reverse all his positions Monday morning after the opening down 15% on the day, to get short. What fools these mortals be.

3. Some poor fool wants to write a book in part about me. He lives in Italy and doesn't know how I have fallen. But he asked me why I was so good at racket sports, even though on that physical test that they have passed around, recently that my friend Lack says they use to train athletes, I would rank in the bottom third as I am neither fast, nor strong, nor balanced or graceful. I have to think about this in trading also, and wonder if there is any reason that I sometimes am successful there.

What I wrote to him was I practiced against myself. I took notes. I followed the rules of eminence of Francis Galton. Organization, persistence, and I practiced from an early age. I had a nice balance of risk and reward in my game, and trained so that I would not get in over my head. I liked to hit the three wall shot where you could make a point on the third wall, but were so far over the tin that you didn't have to worry about making an error. I played a relatively errorless game in squash. I never tried too many great shots. My checker proverbs of Tom Wiswell are very great and contain infinite wisdom on these points. One of the things that Tom said was "take care of the draws and the wins will take care of themselves". One thing I learned was never to showboat. It's best not to mix romance with competition as it leads to showboating. I'll think about this last some more.

4. It occurs to me that the same reason the Knicks always lose after winning from a good team is that the shots they take have random trajectories. It's part of the regression fallacy. Every now and then, they go in and there's a high chance component to the game. The next time, the skill factor is constant, and the randomness goes away. This is a reason also that markets never do the same thing twice in a row.

Ken Drees writes: 

I heard on Fin TV that f never did take bailout money as they did the play by play for the recent severe drop–so f seems to be due for kicks to the body for payback for not drinking from the cup of bailout. There may be some further revenge in for f.

Seems like HRB is still on radio ads touting tax return expectation loan availability–fyi.

Dr. B Humbert Comments: 

August, 2010 was also going to be another 1987/1929 period, and I have learned that it is wise to take profits based on a linguistic count of the word "parabolic".

Perhaps my greatest asset as a psychologist is that I've become reasonably sensitive to the tone and language people use when they speak from genuine conviction vs. a felt need to project conviction. I've never known a trader who was profitable to complain of "manipulated markets". Many bears talk loudly of how the Fed's manipulations have undone their otherwise accurate forecasts.

That and the lining up of charts reminds me of those social psychology studies of the cults that predicted the day of the world's demise. When the day passed, cult leaders used various rationalizations to explain how their faith had postponed the day of reckoning, etc…The more discredited their predictions, the louder they proclaimed their faith. We've been on the brink of a fifth of a fifth of a fifth wave for a while now; thankfully there are always alternative wave counts (that no doubt end ever more bearishly down the road).

dr. b

Mr. Krisrock writes:

The book should be written–for the lessons for life that sports belie. Athletes understand that loses are part of life's experiences, and renewing oneself to win again is more important than most individual's temporary success or failure. In squash you can't blame anyone for a loss except yourself, and you can learn from losing to defeat your opponent and regain success…


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  1. Brendan Dornan on January 30, 2011 4:36 am

    Ford has done well, and because they have done well the shakedown will be that much worse. Jim Chanos of Kynikos is a bear Ford, pointing out they will enter UAW negotiations sometime soon.

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