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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: pigfarmer who wrote (6475)	9/19/2007 11:56:05 AM
From: SliderOnTheBlack	Read Replies (7) \| Respond to of 50501

re: ["SO you were BEARISH at DOW 11,600... BUT over 3000 POINTS HIGHER you are a BULL."] If you are asuming (or, telling me) that I am a "bull" on the broad market - you would be wrong. I am a card- carrying agnostic. The trade on Goldman Sachs was not about being a bull, or a bear. It was a trade based entirely on a discrepancy between price and risk. And also on knowing what the Fed had at it's disposal and what steps they would take and why. a.k.a. -- respecting your enemy and their weaponry. The HUI gold strock trade was not a trade on being bullish, or bearish either. It was an pure trade on the Yen-carry unwind...and the now Yen-carry "re-wind." And just in case anyone is confused, the Yen-carry trade is back on... and back on in SPADES. The reason to "trade" long the Dow, or the Financials had nothing to do with whether the housing bubble still has further depth and breadth to it. In fact, go back and you can read where I wrote about that historically, the ultimate effect of the housing bust would not be felt for up to three years. And I still believe that. All the bears here laid out very intelligent, very fundamentally sound arguements for why the DOW should have tanked. Some of their interpretations I didn't agree with... but, overall - I have absolutely no quarrel, or arguement with the logic, or fundamental soundness of the bearish case. BUT!... the market doesn't always operate on fundamentals, or facts. Reality is always a matter of perception. Truth is what people believe, or want to believe is true. It has nothing to do with the facts. And more important than truth is DNA. Emotion. Greed, avarice and desire. Just like gold bugs who wanted to believe Sinclair when he said "hold tight" and even again when he issued his "free put"...only to get way-layed by corrections. Gold bugs so wanted to believe... that they acted according to their beliefs... not reality. They wanted to believe that China and Russia would be dumping dollars in exchange for Gold. They wanted to belive that one day the public would wake up from a 20+ year hibernation and suddently sit up and slap themselves in the forehead and say -- "hey, it's 2007, and inflation has been rampant for 27 years now... why don't we revalue gold in 1980-dollar terms and run it to $2186? Gold bugs wanted to believe - just like market bulls want to belive now. Truth, common sense, logic and reality have absolutely nothing to do with what they do. As I've said many times... You will always make more money trading the traders - than you will stocks, or the market. Learn that... and you will need few other skills to grow rich and prosper in the markets. If you consider yourself an investor, or a trader... you MUST learn to set your emotions and your bullish - bearish sentiments aside. Because this is about risk:reward discrepancies...not the "home team." Now I know it's hard for a lot of people to understand what I'm talking about. So, let me give you an example. Now I love Notre Dame. I bleed blue & gold. And have since I was a little boy who grew up on a hill just souteast of the campus, overlooking the golden dome. At the age of 6 I used to walk down a hill, cross the street, cut through the parking lot of the Linebacker Inn, run across what was then an open field (now it's Eck Field - the Baseball Stadium)and snuck into Ara Parseghians practice field where I grew up idolizing the likes of Terry Hanratty and Joe Thiesman, up to the era of Joe Montanna. Those were truly the glory days of Notre Dame. My dream of course, was to play QB one day for ND. As it turned out, I could throw... but, my talent was with a much smaller and rounder ball. Now I love and root for Notre Dame with as much fervor as anyone who walks planet Earth, but, if you think I'm taking the points this week and going long the Irish... you're nuts (vbg). Emotion ends... where money begins. Trading must be unemotional. And you must be willing to turn on a dime and short your own mother if need be. Even Notre Dame. Markets are dynamic - not static. And so are the scales of risk vs. reward. Now if you are asking me if GS today at $205 is cheap? Then the answer would be no. Just minutes ago I sold the last of my GS. I own no long shares, or call options in GS at this minute in time. I have some put options that I sold for very rich premiums that look to be safely in the bank...but, I am not holding, or buying long positons here in GS. Maybe it goes higher. Perhaps it runs back to 220 if Mattie's DOW 14,600 figure is hit. It matters not. Other sectors, other stocks, or even the flip-side of the GS trade (going short) will perhaps soon offer better risk:reward opportunities. The long trade in gold here is not "all" about the Fed Cuts. And it's not all about the U.S. Dollar piercing 80. There's much more to it than that. The ECB has been forced to pause...and the BOJ now has an excuse not to acquiese to pressure from their trading partners and hike rates. Hence the risk:reward trade is not on shorting anything... it's on being long inflation. And long the return of the Yen-carry trade. And as far as my post back in the spring of 2006 at DOW 11,600? The DOW soon collapsed 1,000 points to a low of DOW 10,653 in June 2006...and more importantly, gold and commodities also tanked. I don't think I need to tell you happened to gold and gold stocks... And in case you want to know what I'm doing with gold? I'm - holding tight. All things in time. Profits follow patience. Mo later, SOTB