Nov

20

 There's a market lesson in this cartoon.  That lesson is that it is sometimes very dangerous or even fatal to believe in what everyone else around you believes. There are probably many more lessons here, but this one just jumped out at me.

T.K Marks writes:

On the perils of consensus, I recall standing uneasily in the silver pit one afternoon some years ago. The market had been probing new highs in recent weeks and on this day the entire ring had loaded up long going into the close. Visions of stop close-only buying dancing in our hopeful little heads.

But suddenly there was an eerie silence and a collective epiphany as it dawned upon us that we were all in the same boat.

At which point an inveterate misanthrope amongst us asked rhetorically of the pit, "When was the last time EVERYBODY was right???…"

His words had the same convulsive immediacy as James Baker's "Regrettably…", only this time it was said by a brawny Italian guy from Staten Island rather than a Brooks Bros. WASP from the State Department.

Seconds later the bell for the silver close rang and the bloodbath began. It's quite a spectacle to see 100 pit traders simultaneously try to dump longs for their own accounts, nary a bid to be found.

Been known to lead to some momentary inefficiencies.

As for the misanthrope whose mischief triggered the whole debacle, he was long too. But his value system valued mayhem as well as money and this was just too ripe an opportunity to pass up. You see he was a downside terrorist by nature — rarely met a collapse he didn't like or profit from — and on that occasion wanted once again to teach the wobbly longs a lesson.

Even if it cost him 20 grand.

Other than that little personality quirk he was a fairly upstanding guy. Generally stayed out of jail. Last I heard he was teaching a Lamaze class in one of the "tonier sections of Bensonhurst."
 


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