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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (16243)	11/18/2004 2:39:48 PM
From: Chispas	Respond to of 116555

Bill Bonner agrees with you ~~~~~~~~~~~~~~~~~~~~~~~~~~~ *** Gold comes in from the cold...we just received this note from Dan Denning in London... "There was a hot IPO on Wall Street today...in the gold sector! The long-awaited gold ETF is finally here. Each share represents 1/10th of an ounce of gold, and punters can trade them just like the stock of a hot new technology company! "Bugs Beware: It could be a classic contrarian sell signal in the short term...just when the crowd can get in, you see a top."

To: Crimson Ghost who wrote (16243)	11/18/2004 2:50:38 PM
From: Chispas	Respond to of 116555

Also from DAILY RECKONING today ~~~~~~~~~~~~~~~ FAITH IN THE SYSTEM by Irwin Greenstein Born and raised on a New England dirt farm, this young man went on to become the greatest stock trader ever - and one of the most despised men of his time. He lived through two of America's most horrible stock crashes - making millions in a single day, as others jumped from windows to escape financial ruin. At times, he controlled the entire American economy from his posh New York office. He was blamed for the great crash of 1929. He survived death threats and kidnapping plots - on several occasions. His name was Jesse Livermore. And in 1940, he killed himself with a .32 caliber pistol in a New York City hotel. In 1891, at the age of 14, Livermore arrived in Boston on the back of a horse-drawn wagon. He had nothing to his name except a five-dollar bill that his mother had slipped him - against the will of his father, who argued that the boy should stay put and work the plow. But his father never understood his son's knack for numbers ... a God-given gift that would be the source of his fortune. As luck would have it, the wagon stopped in front of the Paine Webber office. Livermore marched in and asked for a job. It just so happened that one of the chalkboard boys (who posted the results of the ticker on giant blackboards) didn't show up for work that day. Livermore got a job immediately. Suddenly immersed in the wild action of trading stocks, Livermore gradually began to realize that the market had a life of its own. And he was bent on trying to figure it out. Night after night, after a grueling day at work, he went back to his dingy boarding-house room. He would furiously enter notes and trends in a diary...trying to decipher the market's patterns. During those lonely years, two realizations formed his entire trading philosophy ... and would make him one of world's richest men. The first realization was that he had to become a student of the market. He had to commit himself to an ongoing education ... not only of the market dynamics, but also of the personality flaws that caused people to make fatal trading errors. The other realization was that he needed a system - a set of self-imposed rules that would govern his life as a trader. His belief in a system arose from his detailed observations that the stock market had an inherent logic ... and that it was only through logic that a trader could beat it - and make a real killing. Two years into his self-education, Livermore felt confident enough to test his trading theories. The problem was he didn't have a stake - a wad of cash that he could use to start trading. Like other poor men at the time who sought their riches in the stock market, Livermore headed straight for the notorious bucket shops of Boston. Operated by gangsters, bucket shops attracted stock gamblers like moths to a flame. That was because guys who were broke and desperate could open accounts and trade for a slim margin - usually ten cents on the dollar. So with fifty cents you could invest five dollars. And if you lost, the bucket shop kept the proceeds. With house odds of 95-to-1, most men met financial ruin. Except for Livermore. Armed with his system, Livermore knew he could beat the house. And that's exactly what he did. Time after time, Livermore bet on stocks and won. In fact he won so often he was banned by the bucket shops in Boston. Shut out, he decided to put his skills to the ultimate test. He went to Wall Street. In New York, he quickly made a fortune...but lost it when he strayed from his system. He was forced to return to the buck shops to rebuild his stake. Since he was banned in Boston, he went to St. Louis and then New Haven. Finally, he was ready to return to Wall Street to make another killing. In the summer of 1929, Livermore's extensive analysis of the market pointed to a disastrous downturn. He just didn't know exactly when it would happen. He started shorting the market, his positions growing increasingly larger as Wall Street collapsed around him. The results were amazing... While millions of people waited in soup-kitchen lines, he made a staggering $100 million during the Great Crash of `29. The millions of investors who had lost everything complained about Livermore. People started questioning how he made so much money, while they ended up destitute. Even The New York Times blamed him directly for the tragic crash. Death threats came directly to his phone line - and he took them head on, talking his way out of them. After his $100 million windfall, Livermore lost his passion for trading - and with it his fortune. No one could understand why - not even himself. It wasn't until his legacy had been chronicled that experts understood he had been suffering from clinical depression. But at the time there was only way out for him...a .32 caliber slug to the brain. It was the same, magnificent brain that had developed one of the most successful trading systems ever. Like most great concepts, Livermore's incredible system was simplicity itself. It involved market timing (knowing when to get in and out), quickly cutting losses, anticipating trends and optimizing the market's momentum (up or down). Livermore was the first trader to actually demonstrate that both a commitment to market understanding, and a bona fide trading system were the keys to making millions in the stock market. And although Livermore is dead, his ideas live on to form the cornerstone of modern stock trading principles. Regards, Irwin Greenstein for The Daily Reckoning