An interesting chart listing the odds of dying. I could not help but think of lottery odds when I saw that chart.

Review on Daily Speculations.

More naked self-promotion from me in the form of an excerpt from Michael Nystrom’s review of “The Complete TurtleTrader”:

“Buy and hold is dead! The extreme market volatility over the last decade should make this abundantly clear to even casual market watchers, but it is something that good traders have known all along: You trade securities, you don’t marry them. Buying a stock is not a commitment “until death do you part.” A friend once told me the story of a man he knew who worked at Worldcom during the go-go 90′s and had his entire 401(k) invested in the company stock. He was waiting for his account to hit $2 million, and then he was going to cash out. It was almost there – $1.8m, $1.9m – something like that when the stock began its terminal decline. Instead of selling, he held on until the bitter end, until all was lost. Moral of the story: The market is the utlimate authority. It does not listen to you, nor care about your dreams & desires, so you had best learn to listen to it. Stories like the above are not uncommon – just ask the employees of Bear Stearns. These days buy and hold may as well be called buy and hope, which is definitely not a sound strategy. And while there are a near infinite variety of potentially successful trading strategies (as the book Market Wizards shows), some of the most successful strategies have been mechanical trend following systems. You’ve no doubt heard a bit about Richard Dennis, the trend trading pioneer who discussed his mid-1980′s Turtles experiment in Market Wizards. Now, thanks to Michael Covel, we are lucky enough to have access to the whole story. Continue…

Here is an interview (MP3) from the other day where it is easy to see that the trend/systematic message is not readily accepted. Trying to get people to move away from only worrying about “today” is not easy. I don’t think the female host of this show was on board with my message.

I did a TD Ameritrade Webcast yesterday with 300+ people. Will post shortly.

From the AP:

NEW YORK – Today’s college students are more narcissistic and self-centered than their predecessors, according to a comprehensive new study by five psychologists who worry that the trend could be harmful to personal relationships and American society.

(more…)

In “The Complete TurtleTrader” one of the two female Turtles elected not to be interviewed. Maybe that interview is closer to reality today as I just noticed that Liz Cheval is paying ad dollars to Google for the term “Michael Covel.” That is a nice endorsement of “The Complete TurtleTrader!”

Almost every commodity market there is fell out of bed today at about the same time MF Global began its 65% share price plunge. Who will email along to me the real story of another firm and or hedge fund who also met their demise today?

If Bear Stearns can go to zero, a stock anyone could buy with no restrictions, tell me again the point of government regulation that limits who can buy a particular hedge fund or not? It seems like the current market situation is proof positive that people should be able to diversify into assets that the government otherwise has prevented them from owning.

From UK’s Telegraph:

Big American finance houses have collapsed before. Continental Illinois required a $4.5bn (£2.25bn) bail-out in 1984 after coming to grief in Texas as the oil boom deflated. The giant hedge fund Long Term Capital Management was saved by a club of banks in 1998 under the guidance New York Federal Reserve. The fund blew up after Russia’s default, which ravaged its portfolio of Danish, Italian and Spanish bonds. On both occasions the US economy was in rude good health. The damage was quickly contained. The implosion of Bear Stearns is more dangerous. A host of other banks, broker dealers, and hedge funds have played the same game, deploying massive leverage at the top of the credit bubble to eke out extra yield. Dozens of them are saddled with the same toxic debt – sub-prime property, credit cards, auto loans, and mountains of unsold paper from the merger boom. This time the market for default insurance is flashing bright red warning signals across the entire spectrum of US finance. The swap spreads on Lehman Brothers rocketed to 465 yesterday, mirroring the moves in Bear Stearns debt days before. Fannie Mae and Freddie Mac – the venerable agencies created by Roosevelt that underpin 60pc of the $11 trillion mortgage market – had a heart attack on Monday. Their bonds were in free-fall, threatening to set off another cascade of bank writedowns. These are not sub-prime outfits. They sit at the apex of the US mortgage credit industry. Hence the dramatic move by the Fed this week to offer a $200bn lifeline, agreeing to accept Fannie Mae and Freddie Mac issues as collateral. Had the Fed delayed, many traders believe Wall Street would have plunged through resistance levels risking a full-fledged crash. The ‘monoline’ bond insurers – MBIA, Ambac, and others – that guarantee most of the $2,600bn market for US municipal bonds have seen their shares collapse by 90pc since the Autumn. They are still battling to raise enough to capital to save their ‘AAA’ ratings. Should they fail, the insured bonds will be downgraded in lockstep. Pension funds would be forced to liquidate huge holdings. As New York Governor Eliot Spitzer said before his own liquidation, such an outcome is too dreadful to contemplate. You have to go back to the banking crisis of the Great Depression to find a moment when the financial system as a whole seemed so close to the precipice.

Alex Spiroglou sent me this article noting this passage:

Legendary MIT economics professor Paul Samuelson is a big shareholder. To his students, Samuelson preached the efficient market theory of investing, which says it’s just about impossible to beat the market. In his own investing, however, Samuelson picked a market-beater [Warren Buffett].

Says much about what you learn in business school about money and markets!