(OT) I made a frenzied call to my shrink, the apoplectic but never antagonistic (and former N.Y. Yankees bat-boy) Doc Kronkite.
"Doc" I moaned, "You gotta help me. I'm a mass of neuroses."
"It's good you called me boobeleh, 'cause I just happen to be a specialist in neuroses, although three in the morning is not the best time."
"Sorry Doc, but this is an emergency. Can I come over now?"
"Over come. Bring bagels, coffee, lots hot coffee."
I made it in record time, handed him his bagels and coffee, assumed my position on his lumpy couch. Moaned a lot.
"What?" he said "You were on vacation for ten days in the Caribbean."
"It rained 80% of the time doc. It was awful. I brought my laptop, traded just a little bit 'cause if I spent the day trading it would've been Divorce Court with Suzy when we got home."
"So talk on me, talk already. What's troubling you?" asked Doc Kronkite.
"It's THE MARKET! doc. It's crazy. I wanna go short, but I'm afraid. I wanna go long, but they've gone up so far I'm afraid. I can't sleep, I can't eat, I can't even er, fool around anymore. What am I gonna do doc?"
"Oy, you got Classical Trader Syndrome. I did a whole chapter on it in my best-seller "Septic Tanks vs. City Sewage; Psychological Implications." Chapter 42. You didn't read it?
"Guess I missed it doc." I said.
"Too bad. Your problems it would have solved."
"I'll buy a copy doc. I promise. But what about the MARKET? What should I do?"
"What's wrong with the market?" he asked "I'm making a bundle. Thinking of getting out of this racket. All day I listen to meshuggeh's like you. No offense. Golfing I could take up. Maybe join the Senior's Tour."
"Doc, I never seen a market like this. Never. And I've been in the market since the early 60's. Stocks are going up 40, 50% in a single day. There's no sanity. It's cookieputs. I'm afraid of a crash. But if I short a stock that's losing a ton of money, it's up another 10-12 points the next day. If I buy a stock with a low p/e multiple, with eight consecutive quarters of earnings gains, it drops on me."
"Back to basics we'll go. Basics. I'm going to give you a little quiz."
"Doc, I don't do so good on quizzes, especially surprise quizzes. Besides, I forgot my pencil."
"Not to worry boobeleh, you won't need a pencil. I'll ask a question, you'll answer. You're a good customer, I'll pass you."
"OK doc." I said
"Why do people buy stocks, tell me?" he asked.
"Gee doc, that's a real toughie. Can't you start with an easy one?"
"Absolutely not."
"Ok doc. People buy stocks to make money." I said.
"Wrong, you idiot" he hollered and marked something down in his little book.
"People buy stocks for only two reasons; first, for the yield, the dividend return. Second, they buy stocks 'cause they hope they can sell them to some schmendrik at a higher price then they paid. Mark this down. Remember it. Forget it never." he said.
"Right now" he continued "most stocks yield less than 2%. Would you buy a stock that yields less than 2%?"
"Mmmm. No?" I answered tentatively. He marked again in his little book. I think it was my soon to be sent home report-card.
"Good. You got one right. So what does that leave you?" he asked.
"Er, confused?" I answered. Again he marked the little book.
"No you idiot. It means that everyone buying stocks is hoping to sell 'em to other idiots at higher prices."
"Oh" I said. "I get it. So all I gotta do is buy a stock and wait and then sell it to someone at a higher price. Right?"
"Wrong" he said, putting another mark in the book. "You could buy a stock at 40, it could drop to 35 and then where would you be? You'd be selling it, losing. Then it could go to 100 a week later and you'd be calling me at two in the morning. Maybe a make-up test you'd like to take. I give make-up tests in special situations. You're a special situation."
"Thanks doc, but I wanna continue. I think I can do better."
"OK" he said. "Are you worried about the long-bond?"
"Nope. I don't care much about bonds. You gotta clip coupons all the time."
Another mark he slashed in the book.
"The long-bond is important" he said. "You have to watch it, 'cause at some point huge chunks of money will begin to flow out of stocks and into bonds."
"No!" I said, shocked. "Doc, that's terrible. That will make stocks drop." He smiled, put another mark in the book.
"So when will all this money leave stocks and flow into bonds?" I asked.
"Ah, already you're looking for extra-credit. A good thing too, the way you're going." he said.
"That's subjective" he said, "but 6.70 to 7% would be a good guess. Fortunately, the long bond is down around a 6.15% yield. You can relax. You can go home now even."
"But doc, there's gotta be more." I wailed.
"Ok, for you I'll tell you a secret" he whispered. "The real problem is the unexpected. Something nobody sees coming."
"What doc, what?" I asked.
He spoke even lower. "What if Alan Greenspan gets hit by a bus running across the street on the way to an FOMC meeting 'cause he overslept and he's late and he doesn't look both ways before crossing? Down the market goes, 2,000-3,000 points. Or what if a major brokerage firm messes up, loses a ton of money in currency trading or derivitave positions?
What if Maria gets clobbered by a 250 pound trader trying to get to a floor phone while she's giving her pre-opening breathless report? What if she's laid up in the hospital for three months with a broken framus? Maria is moving this market. The list of what could go wrong could add another chapter the the book I'm writing now..."The Comeback of the Girdle".
"Gee doc, thanks, I feel much better. Say doc, how'd I do on the test?"
He shook his head sadly. "A make-up test. Next week. Study, boobeleh, study. (Lee) |
