Daily Speculations
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James Sogi
Philosopher, Juris Doctor, surfer, trader, investor, musician, black belt, sailor, semi-centenarian. He lives on the mountain in Kona, Hawaii, with his family. |
5/27/05
Every Tick Tells a Story
Like the law, the market slices through the middle of life. Every tick tells a story. All the participants, like drops of rain joining together to form an ocean, interact, join and flow to form the markets. Each tick is memorialized in real time before us each day, but is more than just an empty blip on your screen; it represents the fulfillment or loss of someone's hopes and dreams. It's the young girl going to college on profit from SUNW; it's the retiree's last Social Security check gambled on a market longshot. Let's take a little trip through the magic quote screen and see the stories behind the ticks.
Downtick 1. Their mother had been suffering from cancer for years. In the 40's, when she was a secretary, her boss had given her a few shares of a penny stock for a new fangled invention. Just a longshot, called International Business Machines. They made adding machines used at the office. The mother had lived her retirement in comfort and style on this one stock holding, which over the years had ballooned into a fortune. On her death, the children sold the last lots to pay the medical bills. It was straw that broke the camel's back as IBM gapped down 10 points.
Uptick 2. The partner was coming home that evening from a seminar on which he was a panelist. Many in the audience that evening had agreed with his pessimistic presentation of the market, and a few young traders had come up after the program to describe their short positions. He knew it was time to cover. The market had been dropping relentlessly for nearly a month. His traders had hammered every pop, but as it hit the yearly lows he instructed the traders that morning to look for a spot to cover. As the market dropped through the bottom of the yearly low, they bought, in quantity at 2:37. The market rallied 1.5% in an hour.
Downtick 3. The market had been dropping for a month. The atmosphere at the retail brokerage was grim. Clients no longer stopped by for coffee and for a chat. The broker wasn't calling to chat anymore, the phone calls were margin calls. The image I get is the herd running for the door, panicking, looking over their shoulder at the tsunami, just as the pros above were covering above. The broker told his clients, You know, it's a good time to buy, but they stared at him in disbelief.
The stories are varied and endless and could make a great screenplay. It helps to know the life of the markets and helps to see, not just to observe.
c
Jim Sogi, May 2005
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