. . . Less Theory . . .More Skepticism . . .
The problem with trying to apply logical and analytical processes to a market wrought with corruption, manipulation, naked short-selling, bare naked IPO launches in the billions, hype, media influence, self-regulation and historical wrist-slapping of broker/banker violators . . . is that it becomes a game of chasing your tail.
You begin analyzing what you think you see. . .but what you think you see is only a reflection of what really is. So all the fine economic models we have built for analyzing the markets are mostly useless when trying to explain the game.
Now if for a moment I believed that the markets were completely free to move in and out. . up and down . . by supply and demand or by other natural forces, then I would agree that such analysis could be of great usefulness. But only the extremely naive are left to believe that all is free, fair and equitable.
So any true analysis of a tainted market MUST absolutely be capable of first measuring the level and effectiveness of the "taint". So "efficient markets" must then be first multiplied by the external factors (the taint), before trying to place them into economic analysis models such as Mr. Soros presents in his lengthy and complicated viewpoint.
I agree that we should practice and even enforce GAAP in U.S. I also agree with Mr. Soros that Investors should learn from their mistakes. . and that it is baffling that they seem not to do so. However, studying the historical moves of the markets leads one to believe that investors never do learn. . . but rather continue down the very same roads as their fathers and grand-fathers did. . . and likely their sons will.
Now if you want something interesting to study, let's examine the levels of 'human nature' involved in not learning from one's mistakes . . .especially when well documented historical evidence exists. That to me is most perplexing.
How Mr. Soros calculates morality into the markets, I haven't a clue. But I can tell you this much. . . if 'greed' could be calculated and measured as though it were barometric pressure, we could have ourselves a near-perfect leading-market-indicator.
Time will eventually tell all. . . .that much is for certain. We have speculated about levels of corruption, greed and deceit going on in the markets since this thread began. . . .(just look at some of the debates I used to have with William Jepsen - where I wanted to see things change. . and he said, "just learn to play them the way they are".)
So after several years of trying to figure out these markets from any number of perspectives, the one indicator that continues giving true readings is this:
"READ THE GREED".
By asking, "to whom does it benefit?" (another we learned from William). . .we are able to better see the plan BEFORE it fully unfolds. In my opinion, some of our greatest accomplishments here were the result of this simple application. (remember 4DMLs?)
As we watched the anal-ysts hyping their stocks on CNBC, etc., we were able to figure that the investment bank in which they represent were probably anxious to sell into the very buying they created with the hype. And sure enough, as we checked our Level 2, there they were distributing shares like nobody's business. . . .while the Meeker-Blodgets laid down the ground fire. After a while, it became a laughable (though despicable) act.
So when it comes right down to it, the markets are not all that difficult a game to figure. But if you look too closely you won't see it at all. And if you get too analytical, you'll look right through the real market into your own reflection.
But if you continue with a Forest View . . .or Mountaintop, if you prefer. . . .always considering the IMPACT of greed as you move in contrarian step with the markets. . . and if you READ the greed correctly. . . then you can walk away with perhaps a more "reliable" view on how the markets really work.
It doesn't sound as scientific as Mr. Soros' theories. . . not by a long shot. And I wouldn't recommend handing such a view in to your Economics professor, or he's likely to flunk you. . . .
But when it comes to investing or trading our own money. . .do you want to adopt the popular critical opinion? . . . the theoretical or analytical theory? Or the skeptical battle-proven hunch?
Rande Is |
