Nassim Taleb recently said:

“When I don’t receive criticism from finance people & empty suits I feel I am doing something wrong.”

I agree 100%, but I would add that I want the criticism from the crazies too. They can’t be left out of the equation.

I caught this feedback on my film website and trailer:

Why would I want to expose myself to more sensational negativity by watching this movie? It only makes me feel bad and gives my subconscious mind doubt and uncertainty. The next day, while I am trading, my mind is detracted and worried instead of paying attention to the “here and now”. I refuse to worry about what I cannot control, why should I jump into this pool?

The film is not “sensational negativity”. This film actually offers hope. Sure, the title by design captures attention because let’s face it many people have acted like they wanted to go broke and have done just that. But this film actually offers a different way to think about the markets and making money. I think this poster may actually find that the “fear of his subconscious mind filling with doubt and uncertainty” (whatever that means exactly) is not going to be a problem. If anything he will experience the opposite. Plus, and you will have to trust me if you are not familiar with the names, but this cast is far from doom and gloomers. The cast assembled definitely wants to impart wisdom.

This article about a so-called hedge fund king caught my eye. An excerpt:

Few people rode the hedge-fund boom better than Clifford Asness, whose AQR Capital Management LLC once managed nearly $40 billion in assets and generated billions in profits. Today, Mr. Asness is running a much smaller firm, grappling with the future of the hedge-fund industry and nursing wounds from a year whose low points included smashed computer screens and a Web-site tirade that became the talk of Wall Street. He was forced to fend off rumors that the firm he founded 10 years earlier was near collapse, and to explain money-losing bets on a wide variety of markets, including U.S. stocks, convertible bonds and commodities, that surprised some investors used to steady gains…The travails of AQR, and the pressures placed on Mr. Asness, capture the plight of an industry struggling to cope with the most tumultuous market in decades. Hedge funds, once the hottest corner of Wall Street, are facing a world of lower returns, leverage and fees.

That last line irks me. Why? Because it is brain dead!

Why is it brain dead? The author of the article seemingly doesn’t get that hedge funds are simply vehicles to trade client money. The term hedge fund speaks nothing to the style of trading the hedge fund employs. Clearly, not all hedge funds are created equal and not all trade the same way. For example, trend followers made fortunes in 2008 and don’t fit the mold described in this article. If Wall Street Journal reporters don’t have the ability to describe the investing world accurately how are average Joes supposed to ever cut through the BS and learn how money is actually made?

Broke: The New American Dream will be released in early June. What a process! For the time involved not sure I would wish making a documentary on the worst of enemies!

Jason Zweig is all over the map. Recently he ripped trend following in The Wall Street Journal and now he pens a ‘love poem’ to Benjamin Graham. What do you take from that Graham article that we should trust in dollar cost averaging? Come on! The baby boomers are sitting there staring at that the start of their retirement with a massive hole in their portfolios in part because they were told to dollar cost average for the last three decades.

From the AP today:

California’s unemployment rate dipped to 11 percent last month, fifth-highest in the country. Michigan’s jobless rate was the highest at 12.9 percent, followed by Oregon at 12 percent, South Carolina at 11.5 percent and Rhode Island at 11.1 percent. As the recession eats into sales and profits, companies have laid off workers and turned to other cost-cutting measures, such as holding down hours and freezing or trimming pay. Since the recession began in December 2007, the U.S. has lost a net total of 5.7 million jobs. The nationwide unemployment rate now stands at 8.9 percent, a quarter-century high.

The 8.9% unemployment rate, a quarter-century high, phrasing caught my eye. Isn’t the percent misleading compared to 25 years ago? Back then it was manufacturing jobs or jobs that required people to do the work. And considering the total US population at the time was much lower, 8.9% back then would have been far less people unemployed. Now today? 8.9% equals a helluva lot more people. Maybe 10% unemployment will be the new norm going forward cause I sure can’t see the trigger for “jobs” that will keep people busy like the good ole days. No more dot-com bubble, new office parks and foosball play days. No more real estate bubble to employ folks there either. Against that backdrop we have the internet and technology eliminating the need for people at a blistering pace. Strap it on!

This came randomly in email to me:

The following are 10 tips for success in today’s business world from Coach Jim Fannin:

1. Work backwards: See the end result first. Then illuminate a reverse pathway from B to A. Now walk on the pathway as if it’s so. If you get off track at any point, you will now have a path to find your way back.

2. Dress rehearse every day: “I’ve never had a day that I haven’t already had.” Make that quote your new motto. Relax and quiet your mind each night before you go to bed. Mentally create a short, macro-movie of the next day. See three items you will accomplish. See them in a finished state, using all your faculties of sight, touch, smell, taste and feel to help create a realistic movie. See it as it will be.

3. Understand there are no rules: In the rigid workplace, the processes that run like veins and arteries must be revisited, with many eliminated.  Use your right brain opportunities for creative thinking. Every dark cloud has a silver lining. Find it! Carve out alone time routines in order to ponder how you can make your job or business more efficient and profitable.

4. Apply the Golden Rule to your network: Social Media (Twitter, Facebook, LinkedIn, etc.) are great but by giving yourself bits of wisdom, facts and different ways to look at the current times, you can use them to your advantage. Do unto your network as you would like them to do unto you. In other words, no one cares what you ate for breakfast or that you have a dentist appointment later this afternoon. They care about how they can improve their standings in the current market. So give them an edge over the competition. Your personal database is your lifeline to success.  It’s how you develop your brand. Leverage it wisely.

5. Be an expert: We still live in a supply-and-demand world. Showcase your strengths. Hone your expertise. Strengthen what you already know and can do. Research everything new in your field. Communicate with other experts regularly. Lastly, think, feel and act like an expert.

6. Burn the bridges: Let go of old ways of doing things. Refuse to talk about how it was done in the old days. Question processes. Avoid people that drag you back into the past. Let go of the judge in you that compares others to what you’ve done.

7. Harness your ego: There are 2 performance mentalities: ego-based and growth-based. Ego-based leaders and workers have a sense of entitlement. They judge and compare. Improvement is moderate at best with this type of mentality. Growth-based minds improve daily. They have eliminated jealousy and the role of the victim. This mentality has a thirst for learning. They only have one motto: “I’m improving everyday.”

8. Reward thyself: Give yourself small rewards for problems solved and achievements garnered. Acknowledgement of your accomplishment is a reward. Treat yourself to a massage, nap, day off, evening out or a new pair of shoes when a small victory is gained. Even though you expect to accomplish these things, a pat on the back from your best friend, YOU, will keep your optimism sky-high.

9. Balance your life: Segregate your life in containers or silos. Each of these arenas will have their own visions, goals and corresponding tasks. Review your thoughts and feelings for each at least once a week. If a negative occurs in one arena, keep it contained so it doesn’t spread to the others like wild-fire. A tough day at work does not have to put a dark cloud over being with your family.

10. Be the gardener: Think about what you think about. Be aware of past-tense thoughts, negative thoughts, victim thoughts and redundant thoughts that have no value. To be a positive thinker you have to be aware of the times you drift into the dark side of negativity.  Acknowledging to the world that you’re not feeling well is a negative thought turned into a statement that can put you on a course of getting sick. It is this type of negativity that you must eliminate at the source.  Keep a running inventory of your thoughts. If your mind was a garden, you are the gardener. Daily, you must pluck the weeds of negativity and remove the small stones of despair that find their way into the fertile soil.  As the gardener, you are in charge of sunshine and nourishment. The seeds you plant and the care attended to those seeds is what you will grow. When times are tough and thoughts proportionately increase, many of us go into fetal position in order to sequester ourselves against any hardship. This defensive state may protect a few assets, but in the long run it will lead to your demise. Without being foolish, realize that good fortune favors the bold. Be Bold.

She simply has no clue. She interviewed him last year and had no clue. Another year later? And she has less of a clue!

Some have asked why I interviewed many top poker players for my documentary film about money and markets. A reader/client passed along a good answer tonight in email:

Michael, purchased your Trend Following course and have begun my deliberate practice of the knowledge contained. Fantastic content. Found particularly helpful the further explanation on variance, expectancy and the importance of sticking with the system and allowing the proper and appropriate effect of optimal bet sizing to take effect. In addition, really looking forward to your upcoming film, particularly the interviews with various poker players. As a tie in between the two, thought you may enjoy this article. Seems to me, that this is essentially what happens when wanna be trendfollowers hit a drawdown and deviate from their systems.
xxx xxx
Institutional Sales
xxx xxx
Perth, W.A., Australia

An email I received recently:

Dear Mr Covel, Research with over 100 leading investors, producers and buyers revealed the following key strategic questions regarding agricultural investment: Will corn prices be driven by supply and demand and no longer by the economic crisis? How will 2009 look like on fundamentals? How will oil prices affect demand for grain? What’s the best way of getting exposure to agriculture? The World Agri invest Congress brings you the biggest names in agricultural, answering these questions and more about the future for agricultural investment.

I don’t believe any of these people (whoever they are exactly) can answer the questions posed. Same issue as October 2007: what were all the ‘stock pickers’ and economists saying back then? I don’t think many of them were saying that a crash was on the way in October 2008 and to take specific action. Bottom line these types of questions CAN’T be answered in a way that allows the right money-making buy and sell decisions to be executed.