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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: EL KABONG!!! who wrote (44217)	1/2/2004 9:52:48 PM
From: Raymond Duray	Read Replies (1) \| Respond to of 74559

KEYNES, A SHARP OPERATOR Kerry, Here's a few more words of wisdom from JMK: "It is suicidal to act rationally in an irrational market" "Speculating? It's the activity of forecasting the psychology of the market" "Yet it is safer to be a speculator than an investor in the sense that a speculator is one who runs risks of which he is aware and an investor runs risks of which he is unaware." "The social object of skilled investment should to defeat the dark forces of time and ignorance which envelop our future. The actual private object of the most skilled investment today (note, written in 1936) is to 'to beat the gun', as the Americans so well express it, to outwit the crowd, and to pass the bad or depreciating half-crown to the other fellow." "...professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view. It is not a case of choosing those which, to the best of one's judgement, are really the prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees." The General Theory, 1936 ****** And a Keynes story you may not have seen before: One fact (out of hundreds) that I didn't learn in school regarding Keynes was that in addition to being the leading economic thinker of the 30's and 40's (d. 1946) , was that he was an active speculator in commodities. He initiated a position in wheat futures in the Chicago market in early 1937, (trading from his home base of King's College, Cambridge). Soon the action took him into the Buenos Aires market as well. As luck would have it, his positions went under water and Keynes decided to take delivery of the wheat he had contracted for. As the ships steamed up the Thames and into London. Keynes was spotted measuring up the King's College chapel for use as a temporary grainery! He discovered that it was too small by half. You see, at the time Keynes owned the equivalent of a one months supply of wheat for all of Great Britain. Well, when the first of the ships docked, Keynes met the seller's representative to inspect the grain. Keynes claimed, and was subsequently proven correct, that the grain was not clean. (The standard test was to count the number of weevils in a cubic foot of grain, a tally over 30 weevils meant rejection.) So for the next month, the sellers agent directed day laborers in the removal of weevils from the wheat. At about the third week, a stockbroker who happened to be a member of the Tuesday Club, and privy to the machinations of Prof. Keynes, ran into one of England's largest millers. The flour man complained bitterly about some "damn speculator" who had cornered the wheat market. The broker kept his mouth shut, but reported back to Keynes. Indeed, prices moved up sharply and Keynes made a tidy profit when he finally released the grain onto the spot market! :) :) :) :) :) :) :) :) :) :) :) :) :) :) :) :) :) :) :) MIRROR: Subject 32716