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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (75873)	12/17/2006 10:07:03 PM
From: Mr.Creosote	Read Replies (1) \| Respond to of 110194

We don't have to agree on everything. In fact if we all agreed on the markets it would probably be a strong indication that we have it wrong. "There is no rule that says you have to be in any market." No there isn't. But with each day you are falling further and further behind to those who are in the market. Let's also agree that you are falling behind much faster if you have been shorting an advancing market be it via puts, put spreads, futures, or outright shorting the underlying. The point is that your position in the "wealth curve" is shifting negatively relative to those of your piers. Taking a neutral stance and keeping your money "safe" in cash equivalents and the like is also making you fall behind, albeit not as fast. This part isn't rocket science. "... prepare soon for a significant widening or blow out of the credit spreads" Well this is debatable and even you agree that "I can't pinpoint a tipping point" I have already made the point that it's very difficult to predict what's gonna happen and even more difficult to predict the "when". Most people can't do it and I certainly can't. On the issue that more people will be joining the poor class at some point in time, allright yes, but I surely can't use this type of info in any profitable way. "But, buying because the market is corrupted is a poor bullish case." I would agree if you were right about the corruption part. But is the market now really "corrupted"? If it is corrupted now why wasn't it in the past? How can you even imply that our market is now more "corrupt" than it was 5 years or even 10 years ago? I guess the next step would be to suggest that the market switches from "corrupted" and "non-corrupted" regimes that only a handful of people can identify in advance. Let me suggest something else. Instead of this logic, is it possible that the market is evolving in new and different ways far more complex than ever before and that it may be much more difficult for us to connect the dots? I for one am not smart enough to know the answers and cannot base any investment decision on this kind of argument. "... then the market's are truly broken, and nobody should be trading them, period" If the market is not behaving in a way that you can understand it doesn't necessarily imply that it is "broken". I know you don't feel this way but please consider that you maybe off in your assessment. There have been far too many instances in my past when I really thought I knew what would happen only to be proven wrong by Mr. Market. And there was always a good explanation later on. This business just ain't easy.