Nov

16

Stein’s Law

November 16, 2021 |

p taking cold bath and doing stretching exercises

Rocky Humbert writes:

countless macro parallels - fiscal, monetary and social - to the 1960's. few of us remember that period, fewer of us were market participants during that period, and none of us kept our punched cards. rocky says good time to review Stein's Law.

Vic replies:

very nice to hear from rocky. a man of wisdom and poignancy and profits. p's law may augment.

i still have my punch cards and cassettes from the 60's. now i will look up steins law. from 25 years ago, whenever i heard from rocky who was named by a white shoe flexion many years ago, it was to point out how trend following was about to or had recently buried me.

stein's law appears to be that a big trend will stop because it can't go on forever. however, there is a law of consilience and beauty i will quote from p shortly and until the nikkei hits 30,000 there is no beauty.

thus i think that rocky's message to me form 25 years ago is resonant but different. i believe he warns me and my meager followers not to be overly bullish.

a quote from P's forthcoming book Time and Beauty. "the connection between beautiful images and ease of grasping and understanding serves as basis for the brain design known as cognition. this is why art occurred in cavemen."

It was robert rubin who gave rocky his name because he was part of the rocket scientists at that white shoe firm and even then the treasury secretary was flexionically in the clouds.

the boys on investicon have a system. buy to sell higher and sell to buy lower. one could wait a long time like 50 years for the latter to work. reminds me of the only time Lorie sold futures some time in 1986. he had a 200 point loss and bailed out on oct 19 1987. never sold short again.

the amazing thing was that the palindrome during the 12 years of our association was bearish on stocks 90% of the time. yet he made money. perhaps the two tennis cans and the back ache were the key.

Vic's twitter feed


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