Feedback in about that dirty word “speculation”

Hi Michael, Here’s an article with a smart comment from US Energy Secretary Samuel Bodman regarding the oil market. It was made in Djeddah during the oil summit after the Saudis blamed “speculation” for rising oil prices. In his speech, Bodman agreed that there has been an “unprecedented movement of capital into commodities,” but he said it was “following the oil market upward — not leading that movement.” It’s good to hear somenone saying something intelligenton the subject these days. And thank you again for the good work. I really love your blog. I finished “Trend Following” a while ago, I am on Taleb’s “Black Swan” for the moment but my next reading will definitely be “Complete TurtleTrader”. Kind regards, Guillaume Chaudemanche (Paris, France)

Apparently when you make money on speculation that is good. But it appears now that some are losing that is bad. Funny contradiction.

From a reader:

Dear Michael, I’m a keen listener of your podcasts and have both of your trading books. I wondered if youd come across the quote below and if you had any view or could offer any insight into the statement. I’ve assumed rightly or wrongly that Elder is steering the reader (beginner) away from the drawdowns associated with trend following, but Im merely guessing. The subject isn’t explored in the book. The statement has put me off trend following for the time being and was hoping you could enlighten me. For information, I am a beginner trader, mostly trading indices and stocks on a spread betting platform (so far without success!). I’m also not entirely sure what he means by a later stage of development: “A beginning trader is better off learning to catch short swings, while leaving long-term trend trading for a later stage of development (Ref. Dr. Alex Elders Come into my Trading Room).” Apologies for asking you direct, rather than Dr. Elder, but given your passion for trend following I thought I would ask your advice. It kind of raises the debate, Is trend following for beginners? The Turtle story seems to contradict this theory. Best regards, Tony

Yes, the Turtles do contradict that view. My view? I view it as one sentence by one man – who is not of the caliber of the traders I write about.

A great article centered around the notion of probabilities. We humans clearly don’t like to think in terms of numbers and uncertainty.

So I am in San Diego this morning in a hotel lobby and I noticed an older African-American guy wearing a Yankees baseball hat while sporting a very stylish suit. I am asked him about his hat and he started talking to me from 10 feet away. I went and sat down next to him and learned that he was Joe Scott one of the 50 surviving Negro League players (87 years old!). His hat actually said “Black Yankees”. We talked for 30 minutes. All of his stories of playing against all the greats. What a great Saturday morning experience. Sadly I doubt many in the lobby milling around had any idea what a treasure Joe was.

Feedback in from a reader named Anne:

Hi Michael—I just wanted to let you know I picked your book ["The Complete TurtleTrader"] up at the Oak Park Library here in Illinois last week and just completed it early this morning. I can’t believe that I read every page!!!! I really enjoyed the book immensely—-I started out at the CME just before they moved to Wacker Drive—–working at the CME has never left me—heck at an early impressionable age witnessing news being made daily, money flowing freely and energy thriving in the spur of a moment who could forget an experience like that! I started off working for Lind Waldock as a runner—–my favorite pit was the S&P 500 Pit, Bobby Alpert, Harry the Hat—————I befriended a sweet frail [...] girl who used to chart for a broker called ZEN—-they were a real cool, hip partnership—-anyway she taught me how to chart. I am a believer in trends and technical trading. Shortly thereafter I hired on with the CME as a pit observer in an unknown pit—-yes something NEW—-the Euro Dollar Pit————————extremely exciting when we broke into a FAST MARKET. Anyway those were the days!! On YOUR BOOK——————–trading has never left me—-I have now moved into micro stocks—trading never ceases to amaze me—it’s unreal—-that’s all I can say and until one does it they don’t know—the HIGH of HIGHS and the LOW of LOWS— I have been on an educational spurt recently—–READING—EDUCATING—-LEARNING——your wonderful book put me in contact with my emotions from the early days—relating to your stories I know why that I continue onward when the going can get tough——regardless the stories you shared were inspirational—as you know the market is like a mistress—she’s utterly exciting,, invigorating however at times she can throw you down so hard you are left gasping——–I am thankful I know more today then yesterday—-I am determined to make it as a trader-a humble trader——-what I find most difficult about trading is PATIENCE and CONFIDENCE——I recently had a patience exercise when I missed out on a $32,000.00 win with the stock GCOG——I made money however I needed the $32K win—-on Confidence I must say these days in the market you start to wonder——AGAIN I thank you for your book—YES—-SUCCESS is achievable and heck Your TURTLES are a prime example of REALITY I have recommended your book to others and I will be excited to visit the library next to check out your other writings!! Happy FRIDAY and Keep Making that MONEY!!

Are many of the new investors in China learning the lessons Americans learned during the Dot Com bubble? Well, that depends. What did the average American learn from the Dot Com bubble?

Pumping gas these days is one helluva market experience isn’t? It is almost like a trading floor: constantly shifting prices among buyers and sellers except when it comes to gas for most people it is a commodity they need to use to get by in their daily lives, not some market that they think they can profit from. And that is the problem. It is one of the issues I am tackling in the documentary film I am producing: the how and why so many individuals have come to see “stocks” as their only investment option to the exclusion of even considering oil, gas, gold, currencies, hedge funds and or managed futures (as but a handful of examples). As Jim Morrison sang all those years ago…people are strange.

This is a great piece of reporting from the Washington Post about the current real estate bubble meltdown.

Wall Street proverbs from the Freakonomics guys.

From Barry Ritholtz some interest rate comedic relief.

Jim Rohrbach writes today in his email newsletter:

“There are only two good feelings in investing. One is being in the market when it is going up, and the other is being out of the market when it is going down.”

Today when I watched the Dow drop 206 points, the S&P drop 23 points, and the Nasdaq drop 55 points, I felt good about being out of the market. Even if the market didn’t drop, it feels good being on the sidelines without having any money at risk. It is very relaxing. Today was a good day to be out of the market. So I am going to relax for awhile while I sit with 100% cash in Money Market Funds. I will be cheering the market down. If it cooperates and drives prices lower, I will be looking for the RIX [his indicator] to provide me with a nice buying opportunity. I hope the market gets out of it’s roller coaster ride and sticks with a down trend for awhile.

I just like his tone!

I welcome feedback and or reviews of “The Complete TurtleTrader” here on this site and also here at EliteTrader.