Re: $90 Oil = Big Rally.


Doobie Keebler <dan.ader@xxxxxxxxx> wrote in message
news:1193402738.224721.190880@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
On Oct 26, 1:16 am, "FrediFizzx" <fredifi...@xxxxxxxxxxx> wrote:

you will do much better with the books and forming your own investing
style than trying to figure out what is not nonsense on this group.
And you will know exactly what is BS and what isn't.

Thanks Fred, that reinforces what I was already thinking.

This so beautiful to me...it's why I LUVS THE MARKET!!!

The market noobie "Doobie" ALREADY "knows" what is "BS"
and what isn't, and is ready to "invest" away with his own "style"!

Here's the truth: there is no "style" in investing, particularly if
you can visualize all the suddenly-unemployed engineers who
showed up here a few years back trying to daytrade their meager
savings online in their tattered bathrobes.

There is only making money, or not, and the TRUE reasons
why you do or don't. Everything else is hype and hope and
hate and the kind of hyperactivity you see at the craps tables...

The odds are stacked against you in anything other than long term
investing.

Understood. I've studied MPT and read 'Random Walk.' I get it.

Done and done! Actually, I give you points for reading more than
ONE book...

Yet, consider blackjack.

Yes, I've done this extensively, as well as played almost 3/4 million
hands...

The house almost always has an advantage.
But, there are those rare situations when the house stands at a
disadvantage and it's time to double-down.

Consider this perplexing question that I once read in a book
on blackjack: you see a player at a table who seems to really
know what they're doing, the player is winning, seems to play
every hand "correctly". Then you notice the player DOESN'T
double down on an eleven when the dealer has a six on the
first hand dealt from a freshly-shuffled deck (among other
baffling playing decisions).

The "odds" say you should double down, even if you "count
cards". So why did this winning competent player not double
down?

I'll give you a hint: the whole trick to all games of constantly
changing "odds" is to gather all the RELEVANT information
about the current state of the game that you can, and then
use that information correctly. People who have superior
information AND ability to use the information will RELIABLY
do better than those who don't over the "long run".

From what I can determine
about this market it's on the brink of bearish.

Is it your "style" to be "bearish", or what INFORMATION
did you gather to allow you to RELIABLY come to this
conclusion?

That's an opportunity
I want to exploit, but how in the name of G_d do you time it?

Well, that's the whole question, innit? My answer for you is
if you are damn sure the market's going to go down, short it
and see what happens.

Particularly see what happens to your "style". Note that we
have a poster here who posts about 15 times a day saying the
market is a FRAUDULENT LAUGHING-STOCK!!! and
is ready to fall after THOSE BASTARDS HAVE STRIPPED
EVERY NICKEL FROM THE 401KS OF HARD-WORKING
AMERICANS!!!

He's been posting that almost every day for the last five years
while the market has risen dramatically...I guess you could call
that a "style", maybe you'd like to adopt that "style"...and maybe
you won't have a choice in the matter, given the inevitability of
human nature...

I don't know or really care about what you mean by "reflexivity" in this
case.

It wasn't in the one book you've read, so not worth knowing?

Soros summarizes the theory of reflexivity this way: "...financial
markets cannot possibly discount the future correctly because they do
not merely discount the future; they help to shape it. In certain
circumstances, financial markets can affect the so-called fundamentals
which they are supposed to reflect."

This is true. Note that during the dot-com craze, some of the
"profits" booked by tech companies were gains on their investments
in dot-coms.

There's perhaps a simpler way to sum up the basic conundrum
of the "markets": we have met the enemy, and he is us.

Go back and read all the posts here about THOSE BASTARDS!!!
rigging the market by causing all these "intraday swings", then note
carefully that those very same posters who have so helpfully alerted
you to these "crazy" swings are all over the map in terms of being
"bullish" and "bearish". They literally switch their positions on a
daily basis, say the market is "over-valued" but go long because
it is "rigged", but are ready to go short at a moment's notice...I get
woozy just reading them, I can't imagine "investing" like that...

This is nature of an "auction market", there are clearly identifiable
RELIABLE behavior patterns, what you would call "styles". People
go totally nutz the moment they step up to the investing plate,
and the markets just reflect that...you can choose to either understand
and accept that, or be an unwitting victim of it like MOST of the
posters here...

Don Luskin (street.com) wrote that the theory of reflexivity is "a
profound and powerful model for identifying the dynamics of booms and
busts, and all serious investors should become familiar with it. When
you understand the theory of reflexivity, you can see how Soros
employed it to pull off his most spectacular wins. And you can also
see how his failure to employ it correctly led to his most spectacular
losses."

Yes, and read "Popular Delusions And The Madness Of Crowds",
which just supplies the anecdotes to prove that human behavior in
auction markets never changes, hasn't changed, over the course
of hundreds of years...

I'm not a Soros fan nor am I a Soros hater. But anybody who can break
the Bank of England is worth reading.

http://www.thestreet.com/comment/openbook/1041598.html

Well, the BoE really broke itself, but there is a great lesson there
to be learned specifically for trading Forex, which is actually a much
simpler market to trade than the stock market...

Oh, by the way, the blackjack player who was making all
the weird plays: the player was "hole-carding" in some way,
spotting the dealer's "down" card, which is occasionally
possible in a non-cheating way. This is the perfect illustration
of the power of using information appropriately.

A player who uses the best "basic" or "zero-information"
strategy on a single deck game for the old "strip rules" can
play basically even with the house; a "card counter" (somebody
who uses the additional information of the composition of the
depleted deck) can make maybe 1% on average per hand
depending on the number of cards dealt after the shuffle; but
a player who sees the the "hole card" and uses THAT information
correctly can make over 12% on average per hand...and
they way they play will be quite different and baffling to
players who DON'T have access to that information, or
don't know how to use it...

The great thing about the markets is that you have the freedom
to gather as much RELEVANT information as you need to RELIABLY
out-perform the market averages, and if you want to actually do that,
make that your "style"...

---
William Ernest Reid
Post count: 839



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