Jan

1

For those who haven't read it, here’s a pdf of Robert L. Bacon’s book, Secrets of Professional Turf Betting. The book provides a banquet for a lifetime.

But first, it must be understood that while it is possible for ANY man or woman to get started with a lonely deuce or sawbuck and run it up to a handsome amount, it is at the same time impossible for EVERY man or woman to make a living at the races.

The careless, the inconsistent, the people who must be "in action" every minute, the stabbers at the moon, the followers of free public selectors, the people who go to the races "just for fun", the players who are ignorant of the principle of winning, the people who do not keep up to date with all the new ideas and trends — all such people must lose. That is true because every cent of the purse money, the jockey fees, the track upkeep and amortization, the trainer's living, the plater owner's living — and the profits of the consistent bet winners — all must come out of the money lost by the careless and uninformed public.

Dec

12

A music piece by Händel - the Arrival of the Queen of Sheba. One could tell that the organ player is enjoying himself.

So many of us finance do terribly well - financially speaking. But then we see it as toil. Some go to the theater or listen to concert in the eve- but perhaps we got it all backward then?

Laurence Glazier writes:

Let’s remember that Handel was enjoying himself too.

Nils Poertner replies:

Wasn't he a pretty good investor as well?

Most (good) musicians experience life in greater fullness than ordinary folks (like us) and express it via their music, eg, the late US singer Johnny Cash…same thing with him. also good lyric with toil and feeling depressed and the sun comforting him etc. some of my more narrow minded friends are like: "I am rich, I can buy happiness." No, you can't. It is an illusion.

Vic adds:

i listen to verdi whenever i need cheer. every one of his arias and chorus pieces is bite sized to enjoy. verdi was a genius in all things like mozart and brahms. a great investor also was about the richest man in Italy when he passed. maintained amazing secrecy about his mistresses also.

Jeff Watson offers:

Whenever I need cheering up, I listen to Steve Fromholz sing his epic Texas Trilogy, and his Man With a Big Hat. (If that one doesn’t bring a tear to your eye, have someone check you for a pulse.)Beautiful music that celebrates real men, freedom, and the open range.

Adam Grimes writes:

Thank you for the share, Nils. This is a fun piece… I've played arrangements of it literally hundreds of times in church services and weddings, etc.

By the way, if any of you play piano, Handel's keyboard music is vastly underrated. Almost all of it is super accessible and a real joy to play. Worth checking out!

I've been more successful in the past few years finding a balance between my artistic, creative life as a musician and the markets. It's a terribly hard balance to maintain and I haven't quite got it right yet.

James Lackey writes:

The Blues Travelers Run Around, the blues brothers and the prison movies Shawshank Redemption, Clint Eastwood Alcatraz always cheer me.

Verdi is fantastic for its simple yet full and rich chord structure and the similar movie sound tracks. Or how about that chord and crescendo on the TDX patented movie surround sound vrrrrmph there is nothing like the sounds of a properly tuned full blown racing engine at idle then a single thump of the throttle and shut it down to silence.

Simon and Garfunkel the sound of silence is wonderful with the remakes of recent rockers.

The sound of silence trading is one thing, like sunshine itself that is either one of the most beautiful things a day or annoying. The sounds of a single fan on in a room across the hall, a car door, mumbled sounds of laughter on the next block. In a panic as your fingers cut plastic keyboard buttons and you search for an honorable retreat. A big rally, the escape with a proper reduction, back to even you laugh as your holding what you’ve got for the duration as we mumble we should have had the balls to hold all to close.

Then like the sun rising over a few covered manicured field of dreams. You whisper, Put some music on brother…Why is it so quiet in here?

Life without music is death.

Laurence Glazier responds:

Nicely put, Lack, with a great rhythm and turn of phrase. Music is a force of nature we cannot tame, but we can be its instrument.

A quote from the painter David Hockney's latest book, Spring Cannot Be Cancelled:

I intend to carry on with my work, which I now see as very important. We have lost touch with nature, rather foolishly as are a part of it, not outside it. This will in time be over and then what? What have we learned? I am almost 83 years old, I will die. The cause of death is birth. The only real things in life are food and love, in that order, just like our little dog Ruby, I really believe this and the source of art is love. I love life.

Larry Williams suggests:

Food and love?? How about air? How about something to be passionate about—like trading or whatever turns you on.

James Lackey :

Larry as you know "trading for a living" opens up self - I we me - to the world in a very simple output PnL and you can not fake it for long. To complete on the worlds stage full time is to immerse yourself. If you give the market 80% effort perhaps you’ll end up with a 20% loss. Give it 98% maybe you’ll get a 2% profit after expenses and paying yourself a working wage. Go all in and it’s literally limitless. All the money fame fortune a many can ever want.

Take back 2% of your time? The mistress of the market is a very jealous person. If she doesn’t kill you your cohorts running at 100% will.

Trading is one of the best things that has ever consumed me and mine. Yet it consumes me.

Laurence Glazier comments:

Better the passion is in the art than the artist.

Nils Poertner writes:

well said. there is nothing wrong with some healthy ego. but the ego that modern man (modern woman) has formed is perhaps way too narcissistic. We are co-creators in fife and that spirit is encapsulated in many religious books- even by Ralph Walter Emerson. one has to feel it - it has nothing to do with IQ.

In The Gospel of Emerson, Ralph Waldo Emerson is quoted as saying:

"There is a principle which is the basis of things . . . a simple, quiet, undescribed, indescribable presence, dwelling very peacefully in us . . . we are not to do, but to let do; not to work, but to be worked upon."

James Lackey adds:

The gist of whatever m saying comes from my dad and army guys and y’all:
Give a smart man time he finds problems.
Give a real smart guy time he finds solutions.
Give a genius time they find the right questions.

With leadership all 3!work together and create the undiscovered unlimited human potential. Alone without leadership and a dose of pain you get what my dad called "lost souls". Time is the 21st century issue most have too much time to think of problems. Those with solutions have no voice as they live in fear. The genius sit alone talking to the connections.

The genius around the globe never before without a middle man or government wishing some one would take charge and get it done. What is it? That list is now so long it’s an infinity symbol. No begging. No end.

Alston Mabry suggest:

Speaking of music, the Fresh Air podcast has a 3-part Sondheim
retrospective. It's really interesting to hear somebody at that level
talk about his work.

Part 1

Part 2

Part 3

Nov

5

Jeff Watson writes:

Proposition bets have been around since the beginning of time. They capture the greed of the victim and put money in the pocket of the prop hustler. Proposition bets rely on the greed of the victim combined with the ignorance of the real probability of what they are betting on. Most good proposition bets are of the sort that will give the victim at least a small chance of winning, the bets that allow the victim no chance to win aren't really bets, but swindles. Although I'm not a fan of swindles, there are some very elegant swindles out there. The book only mentions a couple of them.

Owen O'Shea has presented 50 different proposition bets, mostly in the card, dice, or numbers categories. The real beauty of his short book is that the author kindly explains the math behind each of the prop bets in easy to follow detail. The math is very friendly to those math challenged individuals who might read the book.. The description of each wager and the subsequent true odds of the outcomes allows the reader to "see" what's under the hood for each bet.

The bets described in the book could be easily modified for different situations. For example, he describes the birthday problem wager, but also describes a wager that is a kissing cousin to the birthday problem. I could think of 15 different scenarios that one could apply the same principles of the birthday problem.. All of the other wagers mentioned the book could be expanded upon in this manner.

O'Shea's book is brand new, July 2021, and I highly recommend it. It is an easy read, which is surprising, considering the level of explanation for each bet. This book should be included on the shelf of every library of those interested in gambling, probabilities, math, cards, dice….and for those with a touch of larceny in their hearts. For the beginning proposition hustler, this book could be a bible.

When I was a young man about to go out into the world, my father says to me a very valuable thing. He says to me like this… "Son," the old guy says, "I am sorry that I am not able to bank roll you to a very large start, but not having any potatoes which to give you, I am now going to stake you to some very valuable advice. One of these days in your travels, a guy is going to come to you and show you a nice, brand new deck of cards on which (Sky snaps fingers) the seal has not yet been broken. This man is going to offer to bet you that he can make the jack of spades jump out of that deck and squirt cider in your ear. Now son, you do not take this bet, for as sure as you stand there, you are going to wind up with an earful of cider."

- Sky Masterson "Guys and Dolls"

Stefan Jovanovich adds:

The prop bet was whether Mindy's (actually, Lindy's) sold more strudel or cheesecake.

Vic comments:

all prop bets on S&P from short side are losers. in sports betting you can win if 52% against the line. is that better or worse than markets? how can you beat the 52%?

Henry Gifford writes:

After hearing about the book on the list, I bought a copy. Thanks for the tip. I particularly looked forward to having the examples explained.

I started reading the introduction, which starts with an explanation of the Monty Hall paradox.

Now let’s get something straight – the problem described in the book is described as being a description of the game that was played on TV. All such explanations I have ever heard also say they describe the game that was played on TV.

A hustler offers a mark the option of choosing which one of three doors (cards in the book) is a winner, with the mark betting $10 for a chance to win $10 for choosing the winning door. The three choices are designated A, B, and C.

In the example given, the mark chooses A, then the hustler reveals that C is a losing option, then the hustler gives the mark the option of switching to choice B. The book then explains the mark’s situation as follows:

Here’s the thing. If you do not switch, your choice of picking the [winner] is 1/3, so think of the other unturned card as the “winning card” with probability of 2/3. Therefore, if you switch 2/3 of the time, you switch to the [closed winning door]. Consequently, by switching you double your chances from 1/3 to 2/3 of picking the [winner].

Suppose a con artist is offering this bet to various marks at various locations. At a bet of say, $10 a round, where the mark wins, they win $10. About 1/3 of the time the mark will choose the wrong card. If the mark decides not to switch from their original choice, they lose. This will occur about 1/3 of the time. But the hustler wins about 2/3 of the time and therefore for every $10 the mark wins, the hustler wins $20. Therefore, the con artist is winning this bet 2/3 of the time and in so doing, is making a tidy profit.

Then the book names a famous mathematician who was fooled by this bet, then changes the subject.

I don’t see any explanation of the paradox, and a lot of other things are not explained in any way I can understand.

For example, if switching improves the odds from 1/3 to 2/3, why would switching 2/3 of the time improve the odds to only 2/3? And what is the assumption of the mark switching 2/3 of the time based on?

And “If the mark decides not to switch from their original choice, they lose.” Huh? They lose all the time by not switching? But the previous sentence says the mark wins 1/3 of the time if not switching.

Another gem is “About 1/3 of the time the mark will choose the wrong card.” Really? I thought that with one choice out of three cards the mark will choose the wrong card 2/3 of the time.

And, at the core of the issue, the claim that switching improves the odds to 2/3 is not explained.

Of course the greatest paradox is that the book is about proposition bets that appear to be better bets than they really are, meanwhile the bet described says the mark is betting $10 to win $10 on a choice of one out of three options – a bet which does not appear to me to be a winning bet, as the hustler has a 2/3 chance of winning. Then, after the “paradox” is allegedly explained, the book explains that the hustler enjoys odds of winning of 2/3 because of the paradox. So, the hustler’s odds of winning improve from 2/3 to 2/3. Just how much did the hustler gain by improving his odds of winning from 2/3 to 2/3? This is another thing I don’t understand, and don’t see any explanation of.

This leaves me with zero faith in the accuracy of anything else in the book, and zero faith that anything else in the book will be adequately described. Or, at least, explained in a way I can understand it. My copy is in my garbage can, but I can retrieve it and mail it to any list member who asks for it.

Oct

20

The energy crunch in China and Europe may grow into a bigger trend worldwide. Its one of those small line notes you notice and go hmmm. Like the pandemic was in early 2020. Hmmm, shortage of masks. Hmmm, Shortage of gas, coal. Things that make you go hmmm.

Water shortages also coming up. See how this winter is. Reservoirs are quite low. Look at weekly chart of FIW water etf.

Jeff Watson adds:

I’m noticing many holes where product should be on shelving at every retail establishment we patronize. I’ve been waiting on a part for my Jeep that’s been on back order for 6months. Still see little to no ammo in stores. The system is full of hiccups.

Tim Melvin notes:

I saw a lot of empty shelf space at Costco last week. Very unusual.

Pamela Van Giessen writes:

No joke. We have a huge problem. This is what happens when the world gets shut down and everything is all covid fear all the time. No workers. Test school kids constantly and they will end up being sent home and parents won’t be able to work. Then stuff won’t get made or shipped to where it needs to be. Freight train, fully loaded, sat parked in Livingston MT for nearly 2 weeks. Just left the other day.

As someone running a business that relies on actual commodities (flour, sugar, etc) I find myself overbuying out of concern that I will not be able to get basic ingredients. I had a hard time getting boxes about 2 weeks ago. It’s ridiculous.

Laurence Glazier writes:

It’s getting reminiscent or the Atlas Shrugged movie.

Nils Poertner suggests:

UK is worth to watch as most things we are going to see here in Eurozone or you guys in the US are happening a touch earlier over there (UK being such a tiny, little, open, exposed, econ).

Laurence Glazier adds:

Yes, over here in London it's harder to get petrol (i.e. gas) for the car, less things available in online stores.

James Lackey writes:

I can get everything to build a car a bike or a motorcycle and mysteriously no spikes no single bearing or one simple chip - I call BS. This is almost as big as a Vatican scam.

Jeff Rollert adds:

The most common boat engine, the Merc Cruiser, is quoting deliveries of full engines for next summer.

Duncan Coker notes:

Motors being taken out of production. Sounds a lot like a book I know.

Oct

20

How do traders deal with sleep patterns or disruption? Especially with markets in different time zones, etc.

Circadian Rhythm and Sleep Disruption: Causes, Metabolic Consequences, and Countermeasures

Abstract
Circadian (~24-hour) timing systems pervade all kingdoms of life and temporally optimize behavior and physiology in humans. Relatively recent changes to our environments, such as the introduction of artificial lighting, can disorganize the circadian system, from the level of the molecular clocks that regulate the timing of cellular activities to the level of synchronization between our daily cycles of behavior and the solar day. Sleep/wake cycles are intertwined with the circadian system, and global trends indicate that these, too, are increasingly subject to disruption. A large proportion of the world's population is at increased risk of environmentally driven circadian rhythm and sleep disruption, and a minority of individuals are also genetically predisposed to circadian misalignment and sleep disorders. The consequences of disruption to the circadian system and sleep are profound and include myriad metabolic ramifications, some of which may be compounded by adverse effects on dietary choices. If not addressed, the deleterious effects of such disruption will continue to cause widespread health problems; therefore, implementation of the numerous behavioral and pharmaceutical interventions that can help restore circadian system alignment and enhance sleep will be important.

Larry Williams comments:

That’s one of the hardest parts of this business 'secially when you live in 2 places.

Zubin Al Genubi writes:

Haha. I sleep when I trade. Wake up . Sell too soon.

Jeff Watson responds:

Sell too soon? My life story is that I always pay too much and sell too cheaply. It's a bad habit.

James Lackey adds:

In Ecuador your perfect 12 hours of sunlight all year 365 sure beats fall back to dark at 5pm here. The fall back time change and the further/ farther your from the equator is
More difficult than staying up 100 hours a few times a year.

Oct

19

Here's a good download site for all 51 books of the Harvard Classics Anthology. Since they are all in the public domain, there is no charge. They can be easily put on your Kindle or other reader.

Oct

14

Heard a great quote today while driving and listening to SiriusXM. No clue who said it but enjoying this nugget of deliciousness from the meal for a lifetime:

Music is mathematics for the ears.

[Ed. note: attributed to Stockhausen]

Art Cooper writes:

Here's another, in a similar vein:

Geometry is frozen music.

Peter Saint-Andre chimes in:

Music is the hidden arithmetical exercise of a mind unconscious that it
is calculating.
- Leibniz

Music is mathematics - and architecture is music in stone. - Ayn Rand

Andy Aiken builds on the theme:

Goethe said, "Architecture is frozen music".

There aren’t physical geometric forms, but many physical representations of geometry, such as in architecture.

Nils Poertner suggests:

Christopher Wolfgang Alexander

(born 4 October 1936 in Vienna, Austria)is a widely influential British-American architect and design theorist, and currently emeritus professor at the University of California, Berkeley. His theories about the nature of human-centered design have affected fields beyond architecture, including urban design, software, sociology and others.

Oct

12

Biden's nominee for Comptroller of the currency has a plan, a big plan. It's such a big plan, it's best done in places that used to have 5 year plans…don't worry, we're getting there soon enough.

Oct

5

Decoded neurofeedback

"Decoded Neurofeedback (DecNef) is the process of inducing knowledge in a subject by increasing neural activation in predetermined regions in the brain, such as the visual cortex. This is achieved by measuring neural activity in these regions via functional magnetic resonance imaging (FMRI), comparing this to the ideal pattern of neural activation in these regions (for the intended purpose), and giving subjects feedback on how close their current pattern of neural activity is to the ideal pattern. Without explicit knowledge of what they are supposed to be doing or thinking about, over time participants learn to induce this ideal pattern of neural activation. Corresponding to this, their 'knowledge' or way of thinking has been found to change accordingly."

Nils Poertner comments:

interesting. personally, I found cross-training v helpful - so honing skills in non-work areas, too. eg, professional trader in equity who has singing as hobby might benefit a lot from taking professional singing classes to open up new pathways (also re creativity in trading. also) - am happy to be the subordinate then whereas in trading there can be some unconscious resistance in learning from others.

Jeff Watson adds:

Ben K Green wrote a book called Horse Tradin'. The entire book is cross-training and might even be on Chair's list of recommended books. If it isn't on a list, then it should be.

James Lackey writes:

I've been working on this for a while now 3 years. Path duration outcome based on neuroscience. Dr Andrew Huberman my skate park guy is one of the best - Prof from Stanford University and Army special forces fan. It's fantastic to study.

Nils Poertner responds:

yes excellent. the thing is it can't be an endgaining experience, one needs to have an intrinsic interest in something /also the learning part. if ppl love skateboarding for the sake of skateboarding and hire a teacher to get better, this enthusiasm may carry over for trading (learning /improve process here as well) too.

(our whole culture is way too much based on endgaining - maybe not in all areas - but in a lot of them which is part of the problem why are in this situation altogether)

Sep

29

Symphony No 2 in D The Hello

Jeff Watson comments:

Fellow spec lister Laurence Glazier knocked this one out of the park. This piece can only be described as "delightful." The man certainly has musical chops.

Andrew Moe adds:

Thanks Jeff and of course, Laurence. Loved watching the musical arrangements for the entire orchestra simultaneously. It's like watching the ticks in multiple markets go together. A little ditty from gold, then the bonds … suddenly the euro and yen rise - all to the beat set down by Sanchez. Beautiful!

Laurence Glazier writes:

Thanks both for kind comments.

Yes, it is market-like. Taking in data - melodies and fragments which come to mind - and putting them together, constructing positions, treading a narrow path between excesses of caution and exuberance.

Sep

19

some comments on the big decline.

(1) it was a decline red in tooth and claw with bonds, stocks, and gold down.

(2) it was harbingered by the decline of 47 bucks in gold on thursday. a once in a decade decline. the main reason there was a status incongruence.

(3) everything bad for the US. the 70 billion of equipment left behind. and all the US could come up with was that the afghans and their allies aren't smart enuf to reverse engineer it.

(4) the foreigners have to decide on options expiration whether they should continue their US buying. with the US in decline from the withdrawal and everything related, why should they park in US.

(5) the status incongruence of the admission we killed 19 civilians in the drone strife. but this was clearly an attempt to come up with good talking points about our over the horizon capability. this was the only thing they coudn't blame on pele another incongruence.

(6) the incongruence of Milley worrying about sanity of Trump but not concerned about the montreal semantic test for other high officials. incongruence of no punishment for generals who worked for raytheon and g.d. but impeachment if pele did it.

(7) as the professor says, the market moves to every higher numbers with cataracts along the way.

Vic's twitter feed

Jeff Watson writes:

With many talking doom and gloom regarding the future, it is a noteworthy accomplishment for the S&P to only be 2.5% off it's ATH.

Mark Graham asks:

so what's next come monday?

Jeff Watson responds:

Who knows what the market is going to do on Monday. Who cares what I think? Who cares what anyone thinks should happen in the future? Why should one trust the "experts?" People might have an idea of what might happen, but that's about all it is. I can't count the times I've been perfectly convinced something would happen and it didn't. What happens tomorrow happens, and you will either be right or wrong. That's the case for every one of us. It doesn't matter what Chair, Bill, Sogi San, Larry, myself, or any other member of this list thinks the market is going to do. It only matters what you think and how you navigate the often treacherous currents, eddies and shoals of the markets. Opinions given for free, market tips, supposed insider info, etc are worth less than what you pay for them. LeFevre talked all about tips, and allowing others to do one's thinking for them, and his advice should be heeded.

Larry Williams joins in:

There are people I listen to intently; they have established they are worth listening to…some are on this list. An explanation of why a trader expects such and such to happen is not a “tip". Big difference.

Jeff Watson clarifies:

Since I obviously wiffed the ball in my previous reply, to clarify and make my point clear, the message was it's best to keep one's own counsel.

Larry Williams concurs:

Yup, listen to all but pull the trigger at the target you see.

Nils Poertner adds:

I think what is tricky for most people to understand that in many other parts of business life (in particular as an employee), one can do very well as long one is social enough, aggressive, disciplined enough, progressive etc… or went to the right school…

whereas maneuvering mkts (long-term - over decades) by oneself requires a different mindset altogether - and trading even more so than pure investing

Aug

13

Trouble ahead?

August 13, 2021 | Leave a Comment

Jeff Watson writes:
The market weathermen, self described sage like realists, always see trouble on the horizon and are compelled to give all knowing, logical reasons the market will get hit. Sometimes even invoking "science." To them the pressure is dropping hard, the seas are building, and we're about to get hit with sustained gale force winds. It's always doom and gloom to them. They want the little guy to get scared, pitch his position and make the broker money, rinse and repeat. Meanwhile, Steve provides some perspective and his chart lists 49 reasons for the market to get hit…while the S&P went up 35X during that time. Unfortunately the brokers don't want their clients looking at charts like this or reading Dimson.

James Lackey agrees:

Jeff says what we all learned the hard way. The market in stocks is an engine designed to go up. Any business decisions based otherwise are in between risk-based conservative - which in most cases is a good thing - and ruinous, as the vigorish will grind you to a long-term guaranteed loser.

Michael Cook responds:

I broadly agree with this but let’s not take it as written on tablets of stone.

One of the nastiest human failings in my opinion is recency bias and for investors in US stocks, an entire career (unless a very seasoned investor indeed) has been a basic bull market tempered by the bear markets of 1997, 2002 and 2008 and whatever the hell March last year qualifies as. Recency bias on steroids.

But it doesn’t mean it must always be like that. Just ask eg the investors in the Japanese stock market 40 years ago who pretty much are still waiting to be making money now…

Leo Jia adds:

Even if there is a sharp drop, it will only be shallow and short term. This is not a big bubble and there is no euphoria yet. If one suspects big money are selling, the question is what is the alternative to the US market. Perhaps the worry will be legitimate when Turkey and China become out of any concerns.

Nils Poertner writes:

what makes the difference between folks who are in the market - and trade successfully in the long-term and those who don't is often the acquisition of implicit knowledge. Things we know are true on some level, and that we need to experience personally many times to know that they are true - not in the absolute sense but more intuitively - and percentage-wise.

we live in a very explicit world now everything needs to be spelled out. but the "absense" of something is a better guide than the appearance of an event.

an example would be that SPX drops by 3pc one one day (after months of overheating) - AND the financial press is somwheat quiet aout the drop. as long as they are loud…one can normally relax a bit more.

not to be confused with long-term investing. eg, some of my English friends who bought prime real estate in the 90s in London, and levered up every year with new flats, are all fabulously rich now. was it being lucky or smart? who knows? implicit knowledge is underrated - was my point to say.

Leo Jia comments:

Even if there is a sharp drop, it will only be shallow and short term. This is not a big bubble and there is no euphoria yet. If one suspects big money are selling, the question is what is the alternative to the US market. Perhaps the worry will be legitimate when Turkey and China become out of any concerns.

Duncan Coker writes:

Agreed, it's worth noting that the 00's were the worst decade since the 30's for stocks. I'd propose there was a bearish recency bias going on during the 2010s.

I liked the video about carnival scams. I recall "winning" an album at age 13 from a darts game on the boardwalk at Asbury Park, NJ. No doubt I overpaid. It was a vinyl from a band I had never heard of at the time called the The Allman Brothers which forever changed my life in music.

Jun

8

This is a no brainer. I've been trying to figure out how much the lack of open outcry is contributing to the volatility.  https://www.agriculture.com/markets/analysis/crops/pit-closures-corn-soybean-market-instability-trader-says?fbclid=IwAR1JeG44OrJhEDorqomj7fFmrjMSMhOuiOdrK5KCZutB63pnhKzK5DWU4xE

Apr

19

Jeffrey Watson writes:

I've been thinking a lot about the old physics demo on how metronomes will sync up. I'm wondering if there are any market lessons.https://www.youtube.com/watch?v=T58lGKREubo

Leo Jia writes

More explanations here: https://youtu.be/t-_VPRCtiUg

Mar

30

Jeffrey Watson  writes:

I found the pdf copy of one of my favorite books of all time, A History

of Interest Rates, by. Sydney Homer and Richard Sylla. I found it a

compelling read in the 80's when it first was published, and still find

it compelling today, in 2021. If one is interested in history, money,

exchange, banking, markets, interest rates, then one might find this

book to offer great value and a meal of a lifetime. It certainly gives

one pause and that there is nothing really new, it's all been done before.

http://vnn1.online.fr/Cafeteria/Financial_Accounting_Banking/

A.History.of.Interest.Rates.Wiley.Finance.Series.4th.Ed.eBook-YYePG.pdf

George Zachar writes:

It's a must-have.

I keep a copy at my office, and a copy at home.

Mar

22

Jeffrey Watson writes:

This Surfline article delves into the reasons that while the waves people are riding are getting bigger and bigger, nobody has died while riding them in a long time. The author attributes this to better training, better conditioning, better equipment, and new safety measures with a team effort. 

Since getting wiped out in the market can be accurately be described with a surfing analogy, what methods have you implemented to protect yourself from a six sigma event in the market?

https://www.surfline.com/surf-news/nobody-died-big-waves-lately/112815?

 

Zubin Al Genubi writes:

Using Ralph Vince's risk management tools.

Feb

15

Last Train

February 15, 2021 | Leave a Comment

Victor Niederhoffer writes:

To paradise: https://www.amazon.com/s?k=henry+flagler+last+train+to+paradise&crid=2K4P028N815Z3&sprefix=

train+to+paradise+henry%2Caps%2C166&ref=nb_sb_ss_ts-doa-p_1_23   tells the story of a great adventures and benefactor of  Florida and the country  written in 20002 without the cancel  culture exerting too much of these influence. highly regomme3nde and inspiring as to what an man of integrity and the books  should aspire to.

Jeffery Watson writes:

That book is a must read for anyone who loves the history of Florida. 

Tim Melvin writes:

The authors fiction books set in Florida are also outstanding reads.

Jan

18

Jeffrey Watson  writes:

I wonder if specs as children would eat the marshmallow now or wait the 15 minutes and get another one?

https://www.youtube.com/watch?v=N_jakAtI0Zo

Stefan Jovanovich  writes:

The fraud in social science is that its practitioners almost always end up being Platonists.  Instead of doing what Darwin and others did - collecting data in massive quantities and then using mathematics to find the probabilities, they define an idea - delayed gratification - and then work at finding the evidence that proves that the idea exists.  The law - the worst of all modern social sciences - does this automatically.  If you repeated the marshmallow experiment a hundred times, you would get the beginnings of understanding.  You might discover that the issue with the child who does not wait on the first trial is trust of strangers, that, after seeing that waiting does get you a second one, he is happy to wait as long as required.  If you change the reward structure so it is competitive - the one who waits longer gets 2, you would see yet another result.  The length of the finches' beaks is a statistical response to reality, not a measure of any particular bird's desire for instant or delayed gratification.

To answer Watsurf's question, for marshmallows I could wait forever - hate the things and always have.  For black licorice, I would have stolen the other kids before he had a chance to think.

Anna K writes: 

Stefan, very good points about all the issues with the test, but do you really think that “delayed vs instant gratification” doesn’t exist or doesn’t matter? 

Stefan Jovanovich  writes:

To give AK's questions a binary answer, No and No.  Delayed gratification is another categorical description that pretends human beings have innate behavioral qualities that can be quantitied, will be stable over time, and have predictive value.  But, the only measure that more than a century of experimental  data has shown to have a correlation with future behavior is the one that makes no effort to dissect people's minds but takes them completely as a whole - IQ.  And that, of course, is the very measure that has become illegal because it can foretell what individuals can and will do.

Penny Brown writes: 

Towards that end, De Blasio has decided to end testing to determine which students receive a place in schools for the gifted and talented.

No one is allowed to be superior in his world.  He has foster the dumbing down of education because having superior achievers is not equal.

Henceforth admission to the schools for  gifted students will just be determined by a lottery.

Nov

6

What’s Next

November 6, 2020 | Leave a Comment

Michael Cook writes: 

Ok, so assuming Biden gets called today or the weekend - which starts to look likely, what is next for the markets?

If Trump obsessively focuses on lawyers and anger/anguish, do we not get next stimulus until late January just as Covid cases rocket? So the sugar high we have been on basically gets its sugar removed?

I get the relief rally on the back of (I assume) no blue wave, tech breakup, paralysis is good etc, but once the dust settles - isnt this actually bad, at least for the next couple of months - or am I miss reading this?

Jeffery Watson writes: 

One could make a case that the market doesn't care about who's the boss as long as stocks can carry themselves. After all, what will really change about the nuts and bolts of things? Will the clerk at the DMV, the food inspector, the apparatchik, the cop, the local judge, pr the IRS agent suddenly change their stripes and modus operandi with a new president? 

Aug

31

BBQ Heaven.

August 31, 2020 | Leave a Comment

Jeffery Watson writes: 

Yesterday at 4PM, I put a couple of shoulders on the smoker. I'm doing it very low and slow, and expect this meat to run 22-24 hours on the smoker. No problem, our guests aren't coming until 6 so we should be OK. Smoking meat is the easiest thing to do in the world, just marinate the night before, give it a good dry rub and let it go on low temp (215-230 degrees) until internal temp reaches 205 and it's tender. Keep the meat moist while smoking and spray with apple juice every 2 hours or so. Temperature is critical. After the smoke, let the pork rest for 90 minutes wrapped in tin foil inside an insulated cooler, then take out the bone and pull the pork apart with forks. I always throw a little rub and the juices  back into the pulled pork for an extra taste sensation. BBQ'ing might take a long time, but it's easy to do and tastes so good.   

Larry writes: 

Beautiful… Love the idea of the long smoke time think it makes a huge difference. I'm smoking whole chickens today about 3 1/2 hours also doing smoke corn in the cob if you haven't tried that yet it's a real treat.

Jeffery Watson writes: 

Smoked corn on the cob is also part of our menu along with slaw and homemade potato salad, the potatoes also got some smoke. Just took the shoulders out of the smoker and am now allowing them to rest. Total time was 20 hours and 45 minutes.  I cranked up the smoker To 300 and will be smoking a couple of pounds of sweet and hot Italian sausage. This dinner should turn out pretty decently.

Aug

18

JEFFREY WATSON writes: 

Do you own a significant amount of acreage?

Say goodbye to the Fourth Amendment because it only applies to your

residence per SCOTUS.

Trail cams can be installed on your property by State or federal

officials without a warrant. Who ever knew??

https://www.agweb.com/article/government-cameras-hidden-private-property-welcome-open-fields

Ralph Vince writes: 

hmmm, is it that much of a stretch from a silent drone over your

property by the government or private party camming the goings on? (not

that I think that is ok either, I do not. I recommend a good co2 bb gun

for such incursions

Peter Saint-Andre writes: 

This very issue came up recently in my neighborhood (semi-rural area

outside Denver).

The answer, according to the local sheriff's office, was:

Drones are classified by the NTSB as aircraft (same as a Cesna 172 or

other small plane) which makes shooting one down a federal crime and can

lead to federal charges/fines/jail time. DON'T TAKE MATTERS INTO YOUR

OWN HANDS.

What if a drone appears to be recording me in my own backyard? While you

do own your property, you do not own the airspace above it.  The

airspace above your home is considered a "public thoroughfare" which

classifies it the same as a public roadway.  The courts have determined

that a there is no reasonable expectation of privacy in your open

backyard like you have inside your home, so there is nothing that can be

enforced if they are recording you on your property when it is from a

public space.

Ralph Vince writes: 

Their argument is pure intimidatory nonsense.  Pure Jesuit MO.

The reductio ad absurdum….an unknown aircraft approaches me, in my backyard, at eye level….there is clearly no federal protection, to the contrary, I have a natural right to protect myself. Similarly, a drone, several hundred feet above me, is a physical threat to me. like every other creature on earth, I assume something silently stalking me has nefarious intent.This law was no doubt paid for by Amazon with the help of deep state law enforcement another commercial interests. Flying gizmos like that should be identifiable from the ground, something with a genuine commercial purpose should have no problem being identifiable as such. Anything without you can assume has nefarious intent.I'm not comfortable with something on Mart silently hovering outside somebody's daughters window

Jul

17

https://www.texasmonthly.com/the-culture/auctioneer-school-texas/?src=longreads&mc_cid=91062c3801&mc_eid=ebdbfdf520

Jun

22

An attractive woman feints and asks Grant who rescued her to lure Grant into a compromising position. Where have we seen that.

Jeff Watson writes: 

Or when Clews described an attempt to get President Grant out of the way so Jay Gould et al could corner the gold market without Grant selling government gold. It didn't work.

Stefan Jovanovich adds: 

Grant's first financial act as President in 1869 was to sign the Public Credit Act of 1869. His first choice for Treasurer had been Alexander Stewart, but Senator Sumner had blocked his nomination and offered his fellow abolitionist, George Boutwell, instead. Grant never wasted time fighting a losing battle so he accepted Boutwell. From the start Grant knew Boutwell would be too much of a financial Puritan. Boutwell accepted the Public Credit Act and shared Grant's understanding that the Congress and the United States Treasury had to return to the Constitutional pledge that the only U.S. money was gold and (for lesser denominations) silver coin. Grant was unshakeable in his determination that the Federal government would never again default on paying its obligations in international money. His own calculation was that the Treasury's deliberate default in the first year of the civil war had increased the total cost, through inflation and increased borrowing, by least a third.

What Grant could not get Boutwell to accept was the simple fact that the country was never going to return to its pre-war balance sheet. The abolitionist dream that the national debt could be largely wiped out if not totally eliminated through confiscation of Southern property was, in Grant's mind, illegal (the Confederate soldiers had been pardoned), immoral (the Constitution did not give Congress the authority to take people's property without compensation) and just plan stupid (it would destroy America's credit and property market for a generation). Boutwell and Sumner should accept the fact that the country now had a debt that would never be paid off. Hamilton's wish had finally been granted. The national debt would be there, in size, forever; and it would be the safe asset that speculators and investors, including foreign holders of dollars, would hold while they waited. In 1869 the interest alone on the Federal debt was TWICE the entire Federal budget in 1861: $130,694,000 vs. $66,547,000. In that period the debt itself has grown from $90,582,000 to $2,545,111,000. The debt could be reduced over time; but it would never again be calculated in millions as opposed to billions.

Black Friday is a big deal in the history books because Garfield and Congress had extensive hearings and the story of "the corner" fit everyone's favorite narrative: politicians were corrupt, the market was manipulated, Grant was a fool, etc. The numbers tell a different story. Jay Gould's bet, at its highest, was $60 million. For the 3 fiscal years since 1866 when the debt peaked at $2,755,764, the average net redemption of debt by the U.S. Treasury was $70 million annually - roughly $6 million a month. Through August 1869 Boutwell had bought in $50 million - the pace of regular redemption. The idea that bribing Grant to withhold $4 million in redemption in September was somehow the key to the corner is laughable. The key to the corner was the belief that Boutwell, Grant's sister's husband and others in the Grant administration could be bought. Boutwell could, in fact, be bought - by his fellow Massachusetts citizen, the King of Shovels, Oakes Ames. (Ames is a fascinating figure who deserves attention.)  Of course, the real story - the one that we will not know - is what were the positions and trades of the serious players on Wall Street during that week. The story Crews and others tell is the one Henry Adams wrote up in 1870; it is still the fundamental narrative that will become "history". That is, to my mind, the biggest laugh of all.

Mar

16

With the market the way it is, I better start looking for that cane and dusting it off because I'm pretty sure I will be using it.

Here is a bright spot in what has been a rather trying day.

"But few gain sufficient experience in Wall Street to command success until they reach that period of life in which they have one foot in the grave. When this time comes these old veterans of the Street usually spend long intervals of repose at their comfortable homes, and in times of panic, which recur sometimes oftener than once a year, these old fellows will be seen in Wall Street, hobbling down on their canes to their brokers' offices. Then they always buy good stocks to the extent of their bank balances, which have been permitted to accumulate for just such an emergency. The panic usually rages until enough of these cash purchases of stock is made to afford a big "rake in." When the panic has spent its force, these old fellows, who have been resting judiciously on their oars in expectation of the inevitable event, which usually returns with the regularity of the seasons, quickly realize, deposit their profits with their bankers, or the overplus thereof, after purchasing more real estate that is on the up grade, for permanent investment, and retire for another season to the quietude of their splendid homes and the bosoms of their happy families. If young men had only the patience to watch the speculative signs of the times, as manifested in the periodical egress of these old prophetic speculators from their shells of security, they would make more money at these intervals than by following up the slippery "tips" of the professional "pointers" of the Stock Exchange all the year round, and they would feel no necessity for hanging at the coat tails, around the hotels, of those specious frauds, who pretend to be deep in the councils of the big operators and of all the new "pools" in process of formation. I say to the young speculators, therefore, watch the ominous visits to the Street of these old men. They are as certain to be seen on the eve of a panic as spiders creeping stealthily and noiselessly from their cobwebs just before rain. If you only wait to see them purchase, then put up a fair margin for yourselves, keep out of the "bucket shops" as well 'as the "sample rooms," and only visit Delmonico's for light lunch in business hours, you can hardly fail to realize handsome profits on your ventures. The habit of following points which are supposed to emanate from the big operators, nearly always ends in loss and sometimes in disaster to young speculators. The latter become slavish in their methods of thought, having their minds entirely subjected to others, who are presumed to do the thinking for them, and they consequently fail to cultivate the self-reliance that is indispensable to the success of any kind of business. To the question often put, especially by men outside of "Wall Street," How can I make money in Wall Street ?" there is probably no better answer than the one given by old Mayer Rothschild to a person who asked him a similar question. He said,"I buys 'sheep' and sells 'dear.' Those who follow this method always succeed.

Henry Clews 1908

Mar

12

On Oct 19, 1987 (Black Monday) the S&P opened at 282.7 and fell 22.6% to 225.06 for the biggest % decline ever. Today, Mar 12, 2020, the S&P fell 260 points, almost the size of the entire index 33 years ago. That's gotta say something about the drift.

Mar

9

Monday's statement from the Fed increasing the size and scope of their daily repo operations.

Feb

15

 I found this image on Google. Jesse's suicide note and some good observations on trading from someone else.

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Feb

7

Tradebot was an early HFT group that had a 14 year winning streak, more than 3400 winning sessions in a row. That streak was broken in 2017. There are many explanations of why their trading profitability has suffered in the past few years, with less volatility, not trading foreign stocks etc being some of the reasons. The main reason they are suffering because they have not adapted to the law of ever changing cycles. They are behind the form. It happens to the best.

Sushil Kedia writes: 

Change is the only constant in Markets.
Financial Markets are called Exchange. The purpose for which these markets got created is to facilitate exchange or produce liquidity. The market infrastructure propels this goal by enforcing only one constant, Change! Liquidity is generated by maximising the number of hands feeling the need for change. Those that get complacent with success or those who are lazy, they are the inferior DNA that the Darwinian nature of markets rejects & takes forward with itself agents of change. 
If anyone is keen on cussing speculators, they are lazy or complacent. The speculator thrives with change and is the chosen blue eyed boy of Change — the catalyst of all progress. 
If Stasis is not the anti-thesis of change, what is? The ease of finding an N day breakout, N day average, N day variable is the primordial human instinct to seek refuge in the regular rising and setting of the sun. Markets hand-pick women and men who can identify with, play with and grow with irregularity. The primordial hard-coding of the human mind to seek familiarity is so easily reflected in a normal tendency of men to seek the same table at their favourite restaurant! 
Familiarity may be breeding contempt and unwanted children yet is the most easily sought after human frailty. 
If Inventors and Discoverers propelled mankind forward by sailing with ease in uncharted waters, the speculator does it every moment. Isnt this true in, this time its different?!

Jan

29

 Rising Hemlines & Indices is a well discussed story. Now one notices the necklines of bollywood divas have fallen so far as can ever fall, right down to the navel! Nifty is still tottering at highs for over three months now.

One certainly has the least amount of required common-sense to know necklines cant fall below the navel. Beyond that the only people to lose clothing are the men in markets. 
What's holding this market up is a question that has baffled too many already.

This very interesting piece of statistical event study by Ajay Shah & Susan Thomas is simple to interpret that Indian Markets tend to be too charged up emotionally before the Union Budget. Except three occasions in almost last forty budgets, the returns after the budget have been significantly negatively correlated to the returns before the budget.

This year's budget is on Saturday, 1st February. Prior two days are event-intensive days in key markets of the world.

When a Unilver sells at a 19 P/E ratio in Britain but sells at 50 P/E ratio is India & all learned men have been leaning on the liquidity hypothesis for as many as a 100 days I am unable to ignore the fact that necklines cant fall any further.

The Senator has in prior years on the list mentioned an insightful comment that has provided salubrious perspective in looking through the mumbo jumbo graphics that I do, that markets dont top because the smart guys are selling, they top because all the dumb men who could have bought have already bought. The neckline can't fall any further. The last time neckline had fallen so much was in 2000 when Jennifer Lopez came to the Grammys that year. Now Priyanka Chopra, the Indian diva, Mrs. Nick Jonas has done an encore. Twenty years is a good enough time to be a cycle?

Jeff Watson writes: 

Necklines can't fall below the navel? Check out some clubs in New Orleans to quickly dispel that myth.

Which reminds me of absolutes in the markets. Some swear by them, giving them the same gravitas as they would the fundamental theorem of arithmetic, others, test them and try to eliminate falsehoods and ballyhoo.

A couple of examples:

Commodities cannot trade below cost or production, commodities cannot trade below government subsidy levels, grains cannot trade below the cost of carry, the price of onions will never go to zero. All of these have been bandied about from time to time and all have proven to untrue.

What other absolutes (old wives tales) can you think of?

Jan

11

 Neil Peart, legendary drummer for Rush and a self described "Bleeding heart libertarian" died Tuesday from complications due to brain cancer. He was a friend of liberty and one of the best drummers in the world.

Pete Earle writes: 

This one hits home in a way that few others have. I had listened to their music since the early 1980s and seen them live 20, 25 times. Words and music that inspired and lifted me in every phase of my life. Neil was one of the good ones. Devastating.

Jan

9

Although the book A History of Interest Rates by Sidney Homer and Richard Sylla is dated, it still provides a good history of interest rates from prehistoric times, Mesopotamia, Ancient Greece etc, all the way to the 20th century. It makes for a very enjoyable read that will help fill in the gaps with one’s knowledge of the specific subject of interest rates, commerce etc. Here’s a free copy for you to enjoy.

Dec

5

"These Guys Just Drove an E63 AMG Across America in a Record 27 Hours 25 Minutes"

It's amazing the high tech that is used to smash the cross country speed record. This article provides a look at that most illegal race in the country and the massive preparation and planning it takes to break records.

Chris Cooper writes: 

I wonder…has anybody ever seen evidence that experts at video driving games are any better (or worse) drivers than their non-expert peers? For that matter, are race car drivers any safer on the roads than non-racers?

Dec

1

 A Go grandmaster has retired because he believes that computers can never be defeated. What does that portend for individual, human participation in the markets? Are humans who manually enter trades destined to go the way of open outcry? Can humans have an edge over algorithms?

Bill Rafter replies: 

The following is guesswork. Anyone with a different voice is welcome to comment. (i.e., no need to flame)

I believe that the AI trading of the markets to date has centered on trades that have an almost zero risk of failure. Thus they have mainly worked in the extreme short run, mostly by picking off the marketmakers or the spread. There are many trading shops who do not permit their traders to take a position overnight.

Therefore if you wish to beat the algorithms you must pick a different venue, specifically longer-term trading. Maybe that's 4 days, and maybe it's 400 days, but it must be different from what the AI shops use. That of course means greater risk, but specs are in the business of taking risks.

Sooner or later, some of the AI people will invade this longer-term space, and they will do so by picking portfolios rather than individual stocks. But they cannot eliminate risk, and as long as risk remains, profit opportunities remain for the individual.

Larry Williams writes:

The basis of all profits is trend.

Trend is a function of time.

The more time in a trade the more potential for profits.

As long as losing trades are stopped out so they are not turned to big ones by time/trend.

Zubin Al Genubi writes: 

I believe humans can still beat computers in trading. Maybe one human can't beat one computer, but the computers as a group will have a distinct behavior that can be regularized and gamed. Its the group dynamic, as even computers will tend to a group think. This is especially true if they are learning, and if they are reactive. The fixed systems are still pretty easy to beat because they are still beating the same old dead horses. I've found, as Larry mentioned, that a longer time horizon seems to work better now days. Hard to out speed the computers. Probably easier to out wait them. For example I seem to use 4 hour / day bars now rather than 5 min/30min bars in years past.

Laurence Glazier writes: 

Such factors lean me more seriously to composing music than playing chess. What defines us as human?

Ralph Vince writes: 

I posit that about 50% of all human action is a feint, a misdirection of the opponent, a lie. Camouflage is the dress code on the planet, and we have a several million year jump at the game of deception the machines must learn, must catch up on.

The machines are so-far, trusted–trusted not to lie or deceive. Once they do, how will they be able to compete with us i that higher arena?

Even in music, Laurence, a variation on them, a little bending around of a melody, is a feint, an indirect lie, as it were.

Laurence Glazier writes: 

I've found fractal mathematical techniques of structuring music that have a ring of truth, however writing from inspiration, like painting from nature, must be a battle and a humbling one, with no concession to vacuous prettiness - nature's colour schemes seem always to work in the visual world, and I posit also in music, though I try to figure out more accurate methods of transcription.

Oct

30

Very prescient call on the stock market.

Ralph Vince writes: 

Once again, luck trumps everything. Thanks Jeff.

Jeff Hirsch writes: 

Great call Ralph! Amazing the harder you work the luckier you get
 

Sep

23

 Legendary oilman and all around BSD, T Boone Pickens left a final letter for posterity.

His well thought out letter is frosting on the cake of a well lived life.

One thing that's apparent is his optimism, generosity, and commitment to diligence.

One common thread among people of his ilk is a sense of optimism and respect for honor and hard work.

His letter exudes that optimism and provides many lessons for getting ahead in life and doing the right thing.

Requiescat in pace

Sep

10

Here's a great interview with an ex floor trader answering questions about the floor.

Sep

6

You can learn many lessons from losing trades: "What I Learned From Losing 200 Million Dollars"

Aug

8

 Shaun Tomson is a South African surfer who was the 1977 surfing world champion. Tomson absolutely ripped at Pipeline, giving Gerry Lopez and Rory Russell a run for their money. He is a very quiet, humble man who would charge the biggest, gnarliest waves and make it look easy. He helped make professional surfing a reality, whether that's a good thing or a bad thing is an exercise to the reader. Tomson assembled a code of collective wisdom to help surfers make it through the humdrum of life.

I will never turn my back on the ocean

I will paddle around the impact zone

I will take the drop with commitment

I will never fight a rip tide

I will watch out for other surfers

There will always be another wave

I will always ride into shore

I will honor the sport of kings

I will pass along my stroke

I will catch a wave every day

All surfers are connected by one ocean

Every one of Shaun's gems has a corollary that can be applied to speculators, or life in general.

Aug

7

What has given me pause with this China kerfuffle is the behavior of the grain markets. Seriously, I thought all the grains would have locked limit down today, but nothing like that happened. Very odd situation, and I need to get back to the drawing board. Haven't ever seen this one pulled out of Ceres' bag of tricks. I'm seeing a lot of new things these days.

Jul

30

Moths use acoustic camouflage to ward off predation from bats. This article complements some of the ideas the Chair has brought up over the years regarding different types of camouflage: “Moths survive bat predation through acoustic camouflage fur”

Jul

14

All episodes of the excellent TV series The Prisoner are now available on a new site. The show, starring Patrick McGoohan, has many libertarian themes. I recall someone quoting "The Prisoner does to film what Orwell's "1984" did to literature."

Feb

28

 "The Hipster Effect: Why anti-conformists always end up looking the same"

People make a statement when they embrace individualism and oppose social mainstream, but still end up looking alike. Even with hundreds of styling choices, they still come out the same, with cookie cutter exactness. One would assume that this effect is present in the markets. How would one measure this?

A familiarity of this phenomenon might add value to any spec's operation. This is worth studying.

Dec

27

 Has anyone analyzed these two moves:

Swiss Franc - 1/15/15 (Abrupt stance on decoupling from Euro) Pound - 10/6/16 (sterling flash crash)

I don't trade Swiss Franc Futures, but I do trade Pound Futures at times. (CME FX futures products, front month)

My question that I'm trying to get answered is what would a 50 or 100 lot Stop Loss look like as far as fill? Would it have even been filled? I'm typically using about 50 tick stop losses on those products, so if I placed the stop would I have been filled at a decent price.

Any insight would be appreciated.

Thank you

Jeff Watson writes: 

It would look like a very nice morsel to those hunter gatherers who trade the Swissie. 

John Netto replies: 

Call the Globex control center. What you're asking actually pertains to a banding issue and is something that can be a real factor in a fast market.

Jonathan Bower writes: 

I used to trade most CBOT/CME/ICE products using stops for entries and exits for a decent sized fund. Typically I would stagger the order with slightly different entry points with varying limits, typically a 5 to 10 tick backruns. But when we knew energy reports or economic releases were coming out those back runs would be extended and we'd drop a few of the limits on some portion of the order to guarantee to get some chunk executed.

All that to say is there were times in pretty much all markets, but especially energies, where it could move 100-200 ticks in a blink of an eye and I'd have partial and no fills on lots of orders. So very big slippage events. We found that most of the time that was actually preferable because the market would typically come back to original levels.

However, sometimes you would just know that you should puke and do so quickly…

When I filled orders on the CBOT floor we always told our customers to expect to get filled at the high or low tick… It was probably 50/50 to be the case in the pits. I'd say it's 80/20 now if you use a stop market.

anonymous writes:

There are horror stories about Swiss Franc stops, hundreds, hundreds of ticks away getting filled. I think any speculation about how you will get filled on your stops is just banter. Lets say the next 'black-swan' event is a malicious program inside the CME data center placed by CN hackers. You could have a situation 50x swiss franc debacle. You cant beat nanosecond market making with stops so the only solution is to broaden your risk and time horizon or accept the risks associated with leverage and short-termism. 

Nov

20

 "Will This Be the Season of the Super Cyclone?"

A big typhoon on the other side of the Pacific would make it worth a trip for this Florida boy to go to California to catch some epic South swell. The most rideable waves from those gigantic typhoon swells come right after the peak, when the wave form is changing.

The ocean gives the experienced waterman many clues as to when the form is changing, be it a swell, a hurricane, tuna run, whatever. The markets do the same. There's more than a few market lessons in hurricanes and waves. A difference between surfing and the market is that the very biggest waves on the planet will max out under 1000', nobody knows how high a market can go.

Nov

1

There is a good chance of more tariffs in the near future.

Oct

24

 An interesting article on how Marie Curie spent WW1 learning radiology and setting up portable x-ray machines to attend to the wounded soldiers.

Pitt T. Maner III writes: 

Ironic that one of Madame Curie's daughters, Irene, developed leukemia from probable exposure to x-rays too and likely radioactive material (lab explosion) and died even younger than her mother at the age of 58.

Madame Curie's other daughter Eve, the non-scientist/pianist, however lived to be 102.

1) From Eve Curie wiki–'She sometimes joked that she brought shame on her family. "There were five Nobel Prizes in my family," she joked, "two for my mother, one for my father, one for [my] sister and brother-in-law and one for my husband. Only I was not successful…".

Apparently all of M. Curie's descendants have been at the genius level–even the living great, grand children.

Sep

11

Thank you Dr. Borlaug: "How Humanity Won the War on Famine "

Aug

21

 There are some wonderful market lessons contained within this short video.

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Aug

13

This could be a game changer: "The Corn of the Future is Hundreds of Years Old and Makes its Own Mucus"

Jul

26

 It has long been suspect that the "crazy" in the "crazy cat lady" is not a far fetched concept. A parasite in cat poop has long been suspected of affecting the brain function and personality of anyone who contacts the parasite. This article states that the parasite, toxoplasma gondii, greatly reduces fear among other things.

I suggest that someone undertake a study of speculators and try to see if there is any correlation with having the parasite and success, risky behavior, or whatever. This would be a great study for big pharma, because if they did find any gold, they might develop a pill made from the parasite that would give one courage. Of course, big pharma will probably need to develop a pill for all those nasty side effects, the kind of side effects that are always at the bottom of the advertisements.

Jul

21

 Here's a New Yorker video about professional poker players replaying their most memorable hands. You can find many similarities between trading and the game of poker. Many market lessons are offered in this short video.

Alston Mabry writes: 

This book is short and well done:


Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
by Annie Duke

"Poker champion turned business consultant Annie Duke teaches you how to get comfortable with uncertainty and make better decisions as a result".

Jeff Watson replies:

This is a good interview with Duke. It's long but worth it. 

Alston Mabry writes: 

I recorded most of the Main Event at the World Series of Poker that was just played and I have been catching up on it off the dvr.

There was a very dramatic hand that decided the last seat at the final table (video here), where out of ten players, three of the players had these hole cards:

AA

KK

KK

All three went all in, and the aces won the hand.

They keep replaying that hand and then showing a graphic that explains that the odds of having three players with those hole cards at a 10-player table are 70,688:1.

The irony is that if you consider seeing, for example, these pairs of hole cards at a 10-player table:

7h, 4c

10d, 6s

Jd, 2c

the odds are even higher, because in the Aces and Kings example, the suits of the Aces aren't specified. But we usually don't take note of the combinations that seem "random", i.e., that don't create a meaningful-for-us pattern.

Likewise, the chances of flopping a Royal Flush of Spades is no greater than flopping, for instance:

2s, 3h, 7c, 9d, Jh

or any other 5 cards specified by both rank and suit. The irony there is that if you're watching Texas Hold'em tournaments, the odds of seeing somebody flop a Royal Flush of Spades are actually better than the odds of seeing somebody flop that specific junk hand, because players who start with components of a royal flush are more likely to stay in the hand, whereas those with junk hole cards are more likely to muck them and nip the possibility in the bud.

Of course, the WSOP is a TV show, and they want as much drama as they can get.

Mr. Isomorphisms writes: 

Brian Lee Yung Rowe recently posted about a game he invented for training staff in quantifying confidence/uncertainty: Fermi Poker.

Jul

18

I've been aggravated for most of my adult life with slow drivers in the left lane. I notice the slow drivers the most during working hours, 8-5. It's very frustrating to have someone going 40 in a 55 while the right lane slowpokes are passing by. Looking at the dawdlers in the left lane, I cannot help but see that many of their vehicles are government owned cars, corporate vehicles, or delivery trucks of large companies. It occurred to me that those slowpokes are on the job, and can go slow because they're paid by the hour, or are on salary. There is no need for them to go fast, or even the speed limit for that matter because they're getting paid no matter what. In their case, time is not money. The small plumbing, lawn, and heating/air conditioner workers are paid by the job, and one never notices them going slowly, they seem to be in a hurry all the time. They will get on my bumper if I'm not going fast enough. In their case, time is money and they have to hustle. Thoughts?

Kim Zussman writes: 

I have the impression that drivers in expensive cars speed more and drive more aggressively. Not just hot-rodding BMers, but Mercedes, Lexus, and Range Rovers.

Time is money. To wealthy people that translates to high productivity, whereas hourly employees might take the opposite view.

anonymous writes: 

Kim will have his own opinion, since this is a comment about California and LA, in particular. My daughter Nora, a UCLA Med School graduate (and fan of Leonard Nimoy for his wonderful remark to the administration when they asked him to teach for a semester: "My price is an assigned parking place") thinks the rule for all traffic is simple: "Most expensive car goes first".

To be clear, the rule is what SoCal drivers do as Nora observed in 4 years of driving to the hospitals in the Basin. It is not her own approach, especially now that she lives in North Carolina where the rule is that everyone should practice for NASCAR by driving as close to the rear bumper of the car in front of them (they call it "drafting"). 

Gregory Van Kipnis writes: 

Worthy of a study. What are the underlying determinants of slower drivers sticking to the fast lane?

Several states have determined this behavior itself leads to more accidents as other drivers become impatient and outflank the offender by passing them on the right. These left lane turtles are subject to moving violations. Further there are TV public announcements criticizing this behavior.

Is there potentially useful market related information from such a study? A preponderance of people who try to slow down trading, markets, and decision making betray a distinct value system. I believe it has something to do with wanting to exercise control over others. 

Russ Sears writes:

For most traffic offenses it is easy to imagine a valid reason a driver would be agressive or have a momentary lapse of judgement. It occurs to me that the reason left lane turtles are so irritating is that there is no "good" reason for it besides passive aggressive malevolence for the productive such as suggested: their employer or other drivers. But as the rule goes its usually incompetence before malevolence. As the boomers age I expect this to increase. Perhaps this bodes well for Tesla and Uber.

Jul

12

Those cheap soybeans are ending up all over the world, including Brazil which will be importing cheaper US beans to satisfy their domestic needs while exporting their own beans to China.

Jul

3

Here's a free copy of Ian Hacking's scholarly book on the history of probability theory. Much like Clews has a revered place in any spec's library, Hacking's tome should be given the same respect. This is good weekend reading.

Jun

19

Here's a very short documentary about the origins of the CBOT. One takeaway, 6 out of the first 20 Chicago mayors were CBOT members.

Jun

15

  During WW1, in 1917, the price of wheat went to a record $3.25 a bushel. Using an online CPI calculator(courtesy of the Bureau of Labor Statistics), that price in today's dollars would be $60.24. A far cry from the $5 and change wheat is trading today. Grains in general have had a long term decrease in price over the past couple hundred years. We owe this price decrease to improvements in technology. After all, in 1917 a farmer was lucky to get 14 bushels of wheat an acre while today a farmer can anticipate a yield of over 55 bushels per acre….and the cost of production in both time and labor has decreased substantially. One wonders what the yields will be like in another 100 years.

Brendan Turner writes: 

Gro Intelligence put out some interesting data points on fertilizer and pesticide use in the US.

From them:

"Sixty five years ago, harvested area of corn sat around 77 million acres, and average US corn yield was just 54 bushels per acre. Presently, corn acreage is at 82.7 million acres, and yield now sits at a median of over 170 bushels per acre. In the 1940s, soybean harvested area was at just 10.7 million acres. Today, there are around 89.5 million acres harvested, representing an increase of 736 percent. Soybean yield was less than 20 bushels per acre in the 1940s, but now averages 49 bushels per acre."

From me:

While the growth in US grain and oilseed production is no doubt impressive, the rise of other agricultural players in South America and the Black Sea have had the largest influence on keeping a lid on prices thanks to their explosive production.

Back home in Saskatchewan, every year, our family farms about 15,000 acres of pulse crops like lentils, peas, and chickpeas. The varieties for these crops were mainly developed by university and CDN government partnerships and the large majority of the harvest of these pulses have been shipped to India or the Middle East. However, for the last decade or so, these varieties have been exported to places like Kazakhstan and Russia and now, the Black Sea is replacing Canada as the staple exporter of pulses to these markets.

Simple equation: Lower costs of production by new players –> lower selling price points –> downtrend shift in margin for major producers –> potentially fewer acres planted by major producers (assuming demand isn't increasing proportionately to supply)

Of course, this thesis gets thrown out the window when there is a drought in a major producing country (or any commodity). However, In a drought situation, for markets like pulses where there is no futures market, speculation is a bit more suppressed. By this, I mean less volatility and thus, decreased opportunities to capture value within volatile markets like you might w/ corn or soybeans or wheat.

Stefan Jovanovich writes: 

$3.25 in 1917 is equal to today using the gold currency unit of account As the Watsurf notes, the BLS with its CPI calculation estimates today's nominal dollar price as 18.53 times the record 1917 price for wheat. If you use the 1917 dollar price as the gold currency unit of account (gold adjusted for the change in official price in 1933 and the changes in the open market price of the metal and the relative prices of the dollar against other major currencies since 1973), the change is even more dramatic. $3.25 becomes $133.90 - a multiple increase of 41.12. As always, the BLS CPI calculations fall far short of the actual price collapses of currencies against physical commodities.

For an average acre of land suitable for wheat growing the total yield in 1917 was $45.50 in gold currency units of account (gcus). At that time Kansas wheat acreage sold for roughly $200 (gcus). Today the same acreage produced produces a total yield of $6.67 (gcus) and sells for $50.87 gcus ($2100 in current nominal dollars).

So, based on P/Es measured in gcus, the prices for Kansas wheat acreage were a seeming bargain in 1917 (less than 5 times gross yield).

The difficulty is that P/Es do not seem to be very useful as predictors of what comes next. Kansas wheat land prices peaked at slightly less than $300 in gcus in the 1921; nearly a century later they are selling for less than 20% of that price using the same unit of account.

I defer to our expert and others for any speculations about what may happen to Kansas wheat land prices over the next century. The current P/E is - once again - a relative bargain: 7.6 times gross yield. 

Jun

15

Last night at dinner a former floor trader and very successful hedge fund guy told me, "The only news you want to trade on is the news you make up yourself".

Jeff Watson writes: 

My mentor taught me to look at the big news, and then look at the market reaction. And if the reaction is different than what one would expect from the news, then this in itself is a very important "tell" about the market. Even the reaction to every day little news is worth watching. In my case I watch things like country movement, exports, and yields. The market reaction in many cases is more important for trading than the actual "news" (at least in my time frame).

Doug Martin writes: 

That's the whole, "Bad News Good Action" concept. News and reaction, is most of the time too complex for me to analyze. I'm never correct in my analysis on that front and typically will look at the news only after observing/trading the move.

The only "tell" I can derive from news, is how FAST the effected market moves. Much of what I do revolves around observing/measuring the speed in which a market moves to tell me how significant traders interpret the event or non event.

For instance, yesterday the speed in which Euro and Aud moved was significant in the time frames I trade.

May

14

 An observation: Whether it be chess, table tennis, markets or whatever, people love to be on the attack and score quick victories that draw attention. I think it's an ego driven thing, the spectacular win helps people with their self image. Markets tend to go down faster than the go up, which makes the short the weapon of choice in this field. Chess players are forever wanting to emulate Mikhail Tal or Garry Kasparov and score quick victories, and table tennis players will play for winners regardless of the percentage they get in.

This would represent a systematic bias from humans in all fields plus a way of gaining an edge just about everywhere and anywhere. Find an egomaniac and do what they hate; defend instead of attack and play for the long game instead of a quick and spectacular win. Perhaps this equates to the chair's depiction of 'the house', but maybe it goes further?

Thoughts?

Jeff Watson writes: 

The ego thing is real, and I suspect but cannot prove that the quick victory would pay short money. Back in the pit days, the frenzied scalpers would be in the market a few seconds and a good scalp might be 3-4 ticks on a 10 lot. Meanwhile, the spreader would be watching their position, adding to and subtracting from, and in a few weeks might make 100 ticks on a 1500 lot. Nobody watched the spreader because the scalper was making all the noise and grabbing the attention. Sometimes in life and the markets, the tortoise beats the hare. Fading a big ego is a tried and true strategy as long as one picks their entry and exit points.
 

Brett Steenbarger writes: 

What a great point!

The desire for the short (and quick market move) also comes from inability to delay gratification (lack of patience and the need to be gratified right away).

It also comes from a compensatory mechanism, where people who missed a large up move now look for vindication with a large down move. It never fails that, after a large market rally (such as we've had the last couple of years), traders trot out "the 1987 analogue" and the specter of a grand correction. I've yet to see a 1987 analogue proponent who made large money in the preceding rally. I've also yet to see a true replay of 1987.

Finally, it is surprising how many money managers let their political predilections shape their investment views. Many viscerally dislike the current U.S. President and have been steadfastly bearish through his tenure. The worst outcome for them would not be an economic or geopolitical cataclysm, but events that truly would bring growth and prosperity. Ayn Rand has written insightfully about "sense of life", and you have long noted the destructive sense of life of the permabear.

May

4

 Here's an essay describing the rural areas of Kansas and how the technology has farming, from increasing yields to needing less labor. The improvements are at the expense of the workers and small towns and counties that are losing population.. Towns are disappearing, but so are industrial workers in the rest of the country, all of this because of increases in productivity and improved technology and farming methods. There is population growth in only a few counties, the rest of the counties are losing population at a steady place. There is a thread of nostalgia in the piece, a longing for times before market forces displaced jobs and people. The author found an interesting correlation….that towns with grocery stories selling fresh food did better than those who didn't. The article mentions various "cures" for Kansas' economic malaise, things like organic farming, raising taxes, and various state sponsored schemes to make everything better. State money is being made available for people to sustain "fresh food" sellers in small towns to keep them going. There is mention of the horrible effects of tax cuts of a few years ago which hastened this decline. Sadly, there is no mention of the benefits to the consumer of the cheaper grain etc.There is also no argument for allowing the small towns to collapse and the utilizing the population in a more economical fashion elsewhere. That's OK, the beautiful pictures of rural Kansas in the article make the rest of the article worthwhile.

anonymous writes: 

American Marxists always think the losers of the recent past have a special purity because they were never guilty of being competitive and selfish. It is the Big Lie that never dies. In fact, these dying towns are themselves the survivors of an earlier competition. For every town that still has the lights turned on, there were once a dozen villages, hamlets and whistle-stops on spur lines whose tracks and ties are long gone.

 

Apr

28

 I'm reading Ed Renehan's biography of Jay Gould: Dark Genius of Wall Street. It's an informative and entertaining read and gets 4.6 stars in my book.

Some takeaways. Gould got in a railroad war with Commodore Vanderbilt, and the Commodore lowered shipping rates by 99% to put Gould's Erie under. Gould went into the cattle business in the Midwest and shipped his cattle by Vanderbilt's railroad. The commodore was apoplectic when he found out what Gould was doing.

Gould would get control of a company short the stock, then water down the stock, and buy back the watered down stock with a great profit.

Gould and his buddy James Fisk tried to corner the gold market, and Renehan cites other players like Henry Clews on the mechanics of the deal and what really went down.

There are a couple hundred other little anecdotes, stories, and plots in this book. Too many to recount.

This book provides a very sympathetic look at Gould. None of the hate I've seen in other bios of Gould.

Apr

24

This morning’s headlines include an EU push to save the Iran Nuclear deal. Is the deal that good? Why do they want to save the deal? Are they being paid off? Do they really want Iran to have nuclear weapons? Next door to Europe? What makes this deal good for the west? All I know about the deal is that the USA delivered billions of US dollars to Iran on pallets in order to circumvent their own currency export regulations. Seems like a hinky deal to me but copies of the exact text and terms of the deal seem to be as elusive as the yeti, Loch Ness Monster, or abominable snowman. Please explain to those of us in the nose bleed grandstands.

Apr

16

P. Allen Smith, a fellow alum from my undergraduate days, produced this informative segment for his PBS show. It's about the Memphis Cotton Exchange Museum, and has good shots of the exchange trading floor and the big board. There are some very nice historical pictures of the floor during it's heyday.

Apr

11

 There's a new game in town. It's called Stockpile, an app/brokerage that allows one to buy fractional shares of stocks in price increments online. They also offer gift cards at places like Target where one can buy fractional shares of every stock on the S&P 500 and many ETF's etc. One can buy the gift card, open the account, and redeem it for a partial share. It was very disconcerting on so many levels to see a rack of gift cards of partial shares…at a Target. At $0.99 per trade, it's very expensive considering it's almost a buck for a partial share. Still, the millennials will love it. Stockpile's website is here.  Here's a very good Youtube of Jim Cramer discussing Stockpile with the founder. Here's what the rack of gift cards looked like.

Mar

28

Here's a pdf copy of "The Ultimate Trading Guide" by John Hill, George Pruitt and Lundy Hill. The Senator writes glowingly about this guide in the recommendations. This is a very recent book (not 100 years old) so I haven't had a chance to read it yet. I thought that sharing this would be of benefit to some.

Mar

22

 Joseph de la Vega was a very successful Jewish merchant, speculator, philanthropist, and poet. In 1688, he wrote "Confusion of Confusions," which is one of the very first books on the subject of speculation. A great takeaway from the book was his 4 fundamental rules of speculating in shares.

His rules:

(from Wikipedia)

1. The first rule in speculation is: Never advise anyone to buy or sell shares. Where guessing correctly is a form of witchcraft, counsel cannot be put on airs.

2. The second rule: Accept both your profits and regrets. It is best to seize what comes to hand when it comes, and not expect that your good fortune and the favorable circumstances will last.

3. The third rule: Profit in the share market is goblin treasure: at one moment, it is carbuncles, the next it is coal; one moment diamonds, and the next pebbles. Sometimes, they are the tears that Aurora leaves on the sweet morning's grass, at other times, they are just tears.

4. The fourth rule: He who wishes to become rich from this game must have both money and patience.

This is a great add to your collection.

Here's the book.

Mar

11

Check out this chart with the odds offered by various UK and Irish books for the 2020 US presidential election. None of these prices near the top surprise me. Any overlays?

Mar

6

I was just reminded that the states of Illinois and Iowa each individually grow more soybeans than China does. Illinois and Iowa produce about 15 weeks of China’s demand while China only produces 6-7 weeks of their needs. That’s why looking at the export figures, tenders, etc. in the bean market is so important.

Mar

4

"The notes I handle no better than many pianists. But the pauses between the notes– ah, that is where the art resides!"

-Artur Schnabe

Feb

6

 A graduate of Evergreen, the school that treated Eric Weinstein’s brother Brett so badly, has set up a Feminist Business School. Instead of profit seeking, students are taught to “adopt more feminine traits such as gratitude, intimacy, and connecting with nature.” An article further describes this folly as “shunning the profit seeking motive of traditional commerce.”

One postulates that their graduates will not be recruited very heavily by the Fortune 500 companies. They cobbled together an addled brain mission statement that includes:

“We endeavor to topple the patriarchy, internally and externally. We see business as a site of personal power, radical creativity, and meaningful social change. We know that we can survive and thrive in business without compromising our values. We believe work can be fun. We hold fast to our declaration that……..

A BUSINESS CAN BE A MODEL FOR A NEW SOCIAL AND ECONOMIC ORDER.”

Here are two delightful testimonials from their website and course description.

This was a life changing experience. I learned so much about the economy, business, feminism. But most importantly, I learned about myself. If you feel out of place in the capitalist economy, you’ll likely feel at home here. — Tina C Jenn

[the school] helps us gather tools OUTSIDE the patriarchy, so we can tear it down with some efficacy. These tools are already within us, they are us. We have been so disembodied that we have picked up the tools of the patriarchy to survive, this is about rediscovering our resilience, our natural resources, ourselves; and in doing so, we find the strength to create a new way of being in the world and in business. — Caitlin M Maybe

The mere existence of a “school” like this is part of the downside of legalizing weed.

Jan

10

I just got back from shopping at Publix for our dinner. While going through the checkout line, I overheard two of the baggers talking about cryptocurrencies. One kid was giving market tips and advice to the other. An exact comment from the young tout: "buy Ripple today, it will never ever go down." Is there a school where they teach people to be tipsters?

Anatoly Veltman writes: 

Funnier yet: Ether did absolutely nothing the entire summer and fall while Bitcoin went bunkers. This winter, Bitcoin actually came down, while Ether is absolutely ballistic!

Andy Aiken writes: 

Has it occurred to you that there are fundamental reasons for these price movements? If you simply observed the movement of people as units or particles in the Concourse of Grand Central Terminal, it would be baffling.

But if you understand that these particles are individual people, each with a home and a workplace, each with a will and an intent, then the movement makes sense.

The intentions aren't incidental to the movement.

James Lackey writes: 

Your fantastic quote might be true for all public markets. That is all I see when I want to move. Path of least resistance ideal. 

anonymous writes: 

I agree with Lack on Andy's excellent observation. Is it true or useful to say that:

a) we often don't know the distribution generating price signals

b) better to go with empirical or nonparametric distributions when possible, as opposed to formula driven?

c) is there anything to simplified agent-based modeling?
 

Dec

23

For all the new members of this site and for anyone who never got a copy the first time around, here's a copy of Bacon's book, "Secrets of Professional Turf Betting". The Chair and I both agree that this is one of the best books out there about markets. Since it's out of print, it goes for around $100 on Amazon or eBay, so look at this as a nice little Christmas lagniappe. Happy holidays to y'all and may the next year have all your trades winners, and may GS be on the other side of all your trades.

Dec

20

Please excuse my ignorance.

Grain traders know how many cents a certain size order can move the market, and bond traders know the effects of big orders. For those trading Bitcoin, how much will the cash market move on an exchange if one is selling 1 coin, 50 coins, 100 coins, 1000 coins? Is the market thin, how liquid? Is the b/a spread narrow in the futures? Does the b/a spread vary during different times a day? Are any retail business allowed to go short yet? How many BTC's are for sale (real orders) at any given time? What constitutes a "Big order" in both cash and futures BTC? What time of day offers the most liquidity? Thanks.

Dec

16

 Here's a link to a Ted talk titled, "What Can We Learn From Expert Gamblers? " He discusses the difference between expert, casual, and problem gamblers. He discusses the risk intelligence that all successful gamblers (and specs) have. The speaker then directs you to his website where there is a risk intelligence test that is very illuminating, and very fun to take. The test consists of 50 statements and one gives a percentage that the statement is true. Please don't game the test by answering 50% on everything.

Here's the risk intelligence test.

This website does offer another, more "accurate" risk intelligence test for a fee.

Dec

15

 There has been much comparison between the BTC rally and the tulip bulb bubble back in the 1630's. Zero Edge has proclaimed the BTC "bubble" as the biggest bubble in history. Whether it is or not, none of that matters to me. What does matter is all the mention of tulips and the effect they had contributing to my family's considerable folklore.

Back in the late 1960's. my great aunt became rather batty, as most women on that side do. Since she was well off, people referred to her as an eccentric, rather than hanging the crazy moniker poor people would get. One day, my great uncle(by marriage) dug up a bunch of tulip bulbs and put them in their pantry's onion storage box. Apparently, he never told my aunt that he put them in the box. For the record, my aunt was arguably the worst cook in Illinois and it's lucky they never had kids as she would have probably poisoned them. My mom and dad jokingly called her refrigerator the ptomaine box and we were instructed as kids to always politely refuse her offers of food.

One day she was making him dinner and mistakenly used the tulip bulbs from the pantry instead of onions and shallots. That night, he ate the dish, got stomach cramps later in the evening, then dropped dead the next day. She said she didn't have any dinner because she wasn't feeling well. Because he was in his 80's, had chronic medical issues, and was an old man, no autopsy was ever performed, so we'll never know the exact truth of what killed him.

At any family gathering, we still like to joke that my great aunt got away with murder. It gets a lot of laughs, 50 years after the fact. Personally, I don't think she was a murderess or had any intent to murder him, as her brain was rather addled by that time. Furthermore, although tulip bulbs contain a few toxic glycosides, there are no recorded deaths from ingesting tulip bulbs. Still, it makes a great story.

Every time I hear about tulips, bubbles, onions, and shallots, I get a mental image of my great uncle eating that food and keeling over.

anonymous writes: 

My mother was a child in Holland during the Hunger Winter of 1944-5; tulip bulb soup was commonly served because eating that was better than starving.

Nov

29

 USDA reports the year corn production first reached these milestones:

Bushels/Acre          Year achieved

30                             1896

40                             1948

50                             1958

60                             1961

70                             1965

80                             1967

90                             1972

100                           1978

110                           1982

120,130                    1992

140                           2003

150,160                    2004

170                           2014

180*est                     2022

190*est                     2027

*USDA forecast

85% of the US corn crop is planted in rows 30 inches apart, according to Pioneer Hybrids. This allows for a population approaching 40,000 plants per acre. Narrowing the distance between rows to 20 or 22 inches has shown a significant increase in yields in many trials. There's a school of ag scientists who predict that the development of new hybrids and GMO's combined with narrow rows will allow for ultra high plant populations of up to 80,000 plants per acre. The huge populations will be achieved without causing undue stress to the plant. Scientists are working on future root systems that will adapt to the narrow rows, allowing for the more efficient collection of water. In some hybrids, they are tinkering with the shape of the plant, making them more Christmas tree like to maximize exposure to light. The effect of sunlight cannot be underestimated, as any sunlight that hits the ground is effectively wasted. To further increase yields, scientists are tinkering with the size and shape of the ears, going from the biggest/longest ears to shorter more modest size ears with many more ears per plant. After all, huge ears require more support and that translates to wasted, non-essential plant structure. One envisions a time in the future when corn yields will average 200+ bu/ac. Science and modern agriculture methods and practices have increased yields by 466% in a little over a century.

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