Gold spoke:the Fed listened, but Permabulls didn't.
Ron, the job of the newsletter writers is to ....drum roll please:
...sell newsletters.
I don't think Edelson of Weiss Research, or the Agora Publishing newsletter writers and the rest of their ilk -- are managing any clients money. Their only job is to sell newsletters. And the easiest way to do that -- is to fan the flames of greed, avarice and desire... or, to inflame, agitate and expand their readers fears & frustrations. And they do it...damn well! I don't fault the newsletters -- I fault the permabulls who've been around long enough to have learned by now.
Newbies... are excused.
They sign up and get their first online account.
New toy... way cool.
Hmmm?
What's this margin stuff all about?
Sounds interesting.
You mean I can get a loan (cheap) to buy more stock?
I can get 2 ounces of gold and only have to pay for one ounce?
Damn...sign me up!
It's an Up-Cycle and everything is going up... why not 2x my returns?
They do.
It works for a while.
They make money.
Want more money...
Then some newsletter writer comes along and blows some big-league blue-sky smoke up their ass with:
"$2000 Gold"
"Petrocalypse"
"The Case for $2158 Gold"
"70 Days to Empty"
...and down the slippery slide they go.
They get their greed glands fired up and they leverage up to the max.
They make some more money.
Gee, this seems too good to be true!
It is...
...and then the bottom falls out.
Welcome to the Real World (the non-MTV version).
Yes, reality bites...just like a Rottweiler -- hard and deep.
"Gold did it's job...but, Permabulls didn't do theirs."
The biggest mistake the permabulls made here (other than being doomed by their own DNA) was not listening to what Gold said...and then failing to acknowledge that the Fed did. The Fed listened to Gold's message....they heard the canary in the coal mine....and they hiked rates 17 damn times in a row!
-- HELLO PEOPLE?!?!?
Then, the Housing Bubble showed signs of cracking and the Homebuilder stocks cratered.But, Commodities went parabolic?
Crude Oil & Natural Gas completely disconnected from reality given that inventory levels reached five year highs. Imho, never had the discrepancy between price and risk...redlined to the short side so quickly.
Then:
-- Nat Gas rolled over and died in December.
-- Gold imploded in May.
-- Gasoline just fell off the cliff in August to September.
-- And now Crude Oil has cracked.
....Whodathunkit?!?!?!?!
And you wonder why I seem like a cold, heartless bastard?
Puh-leeze. Bo Collins of Mother Rock and Brian Hunter of Amaranth...along with the SI Permabulls...all got what they deserved here.
If you ever wondered if you belong to the -- "Doomed by your own DNA" majority of humanity. Here's the test: If you didn't see the blow off top in commodities this May as a "take the money & run opportunity"... then you failed the test and you are doomed...by your own DNA.
But.. the good news is -- that it's not your fault, because you were born that way. Wired from birth. Just like 95% of the rest of humanity.
A Brian Hunter and a Bo Collins can make it for a while... even make it big... real big....billions of dollars big. They can make it...but, they can't keep it. The problem in commodity up-cycles has never been -- "making money." Virtually everyone and anyone -- makes money. The problem is in keeping what you made and not ultimately giving much, if not all of it -- back.
Brian Hunter didn't have a problem making money -- he made tons of it at both firms. But, he also gave much, if not all of it back ... at both firms. Bo Collins didn't have a problem making money either. He made tons of it. His problem was the same as Brian Hunter's -- keeping it.
It's never about the fundamentals, or the technicals.
It's about the herd.
It's ALL about the herd.
Always has been... always will be.
All about popular delusions and the madness of crowds.
Crowds doomed by their own DNA.
Nothing has changed over time since the Dutch Tulip mania of 1635 to the Tech & Internet mania of 1999. Traders have been "doomed by their own DNA" for the last 400 years...and they will continue to be for the next 400 years.
And that's why all you ever need to do well is this:
"Play the Players... not the Cards."
Master the cards...and you'll make money, lots of it.
Master the players...and you'll get to keep it.
Just ask Bo Collins, or Brian Hunter.
later,
SOTB` |
