"I had guides skiing up in the wilderness, who have a lifetime of experience and reference. Like markets, if you lose your reference point, you're dead in short order." JS

In the spirit of drift, randomness, and our Dear Mr. Sears a very famous runner once said "The only good race pace is suicide pace, and today looks like a good day to die" (Steve Roland Prefontaine). To tie a few posts over the last few days Surfer asked when a mean would equal zero? I took that as if zero is good when the world is red… Well if 8-10% is the annual pace when 18% is the stdev of historic returns since ground zero (early 1930's) then the math to get the drift from 8 to 10 down to zero would be twice that, at least  18%, if the VIX hits a historic then the average must be altered as well and its stdev is altered. The Chair also shared recently those words of Galton that the herd of fish all have terror in witnessing their brethren fall victim to the artificial fly, but yet they must eat. How do the fish then decide? How do the fish choose then to eat amongst all that hits the water, fake or real opportunity? How tempting is it to choose for a starving fish in some Sartreian way through "free choice" that is so scary a fly that ripples the water when the fish that the fly falls to a fish when the fly is so many stdev's away from the norm of day to day feedng with it's ripples? That my fellow dailyspecs to me is speculation! Both as the fish and the fisherman. I am not a fish, I am a fisherman. It is not a matter of right or wrong, it is a matter of profit. My PaPa taught me over many hours of fishing that a fly is no more than an enticement of the natural day to day of the fishes appetite, we can only merely mimic the natural. To catch the biggest fish is to understand the hatches and the common "drift" as Mr. Prefontaine understood the correct winning pace. If the stdev's of the market are compromised for whatever reason to either tail then as fishermen we must adjust the fly of choice to fill the creel to eat as must the fish to avoid being caught. During extreme draughts of not catching fish knowing that the flies that usually gave quantity and size we must give the imitation up and go to the banks of the creek and switch to live bait or introduce bait at least to entice profits that the fish has never seen to entice a bite and bare profits. Just as mentioned prior we have to find that amongst either the most common days to profit or be creative enough to introduce new to the fish of profits. This though makes us as fisherman of profits to get into making those scary choices that may make us get in way over our head as the Chair has warned or as Bacon warned of switches.

Reference points are nice but are no Archimeadean point. Nor is a ship's destination once at sea no matter how certain the Captain is from point A to B.


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