To: Carmine Cammarosano who wrote (34777 ) 1/13/1999 5:37:00 PM From: GST Respond to
The trend is down -- lower highs and lower lows each day. Unless you are a 'genius' day trader the 'thing' is no longer your ticket to the good life. Lets compare our AMZN day trader to the hedge fund Long Term Capital Management. LCTM was headed by two PhD's with Nobel prizes, one of them developed the model now used as the building block for all options pricing, and with a couple of supercomputers at their disposal and a team of physicists doing the heavy thinking on the models to 'keep them safe'-- they built a pyramid of one trillion dollars in trades on an investment base of only $4 billion before going bankrupt last fall -- it took Alan Greenspan and their bankers and a hundred billion dollars in added liquidity to save 'the financial system' from their stupidity. Why did AG bail them out? Because there are 400 hundred more hedge funds like them out there playing these games, and if one was allowed to go down in flames, they all would have had their loans called and it would have destroyed, not corrected the market. Now -- when all those really smart day traders out there, with their desktop computers and experience with markets that only go one way (up), when they all tell you don't worry, it will go up and we will get rich, and anyway I'm 'safe' cause I am hedged -- what makes you think that they are your best guide in a market where the trend is 'down'? Alan Greenspan is called the most powerful economic actor for a simple reason -- he is. Not only does he not want AMZN 'saved', he needs it to be publicly whipped as a warning to others. The trend is down and nothing can stop it now. You can recognize the trend and make money (mainly just by walking away), or you can pretend that the trend is up and get hurt very badly, just like the shorts who refused to believe it when the trend was up. When it gets to 100 it will pause for a moment, it is harder to tell what happens after that but I would expect that it will settle into a trading range somewhere around 50 dollars give or take depending on the overall market. The long term? One of the worst investments anybody will ever make.
