Michael Covel: News & Info.

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

This is a great article from a columnist who writes about professional hockey for ESPN. The article has little to do with hockey and everything to do with amassing wealth. Perhaps the best line from it

You work, you save, you sacrifice, you play hurt, you don’t call in sick, you laugh, you cry, you care, you give, you drink beer and you never give in. Right to your last breath.

The father of the Turtles Richard Dennis was very wise even back in the day. From an article circa 1976 wholly relevant to today.

Since 1996 I have seen an absolute ton of hero worship in the investing space. It always strikes me odd to see people blindly follow along cult style to people who play the part. Thinking about that tonight I recalled a passage from the TV series “King of the Hill” that did not make my TurtleTrader book.

In the episode a washed up former Dallas Cowboy football player moves into Hank’s neighborhood. The football player who was never that good to begin with, but to weekend warriors like Hank and his buddies, it does not matter. He was a former pro football player - he was a god to be worshiped - that is until the guys found out the real story of ‘Big Willie’:

BIG WILLIE: Hey, you guys wanna see some stuff from my career? Hank, you’ve seen this. It’s the football from that kick I blocked. Oh, and here’s a picture from that kick I blocked…and that’s how I blocked that kick.

HANK: That story gets better every time you tell it.

But later, as Hank’s son points out, Big Willie is not that impressive a football legend.

BOBBY: You know, for a guy who was a pro athlete, Willie’s drunk a lot.

Finally, Hank’s neighbor Kahn, who knows little about football, gets tired of Big Willie’s beer bashes that are keeping his family up at all hours of the night. He senses that Willie is a loser hanging onto an unimpressive past:

KAHN: I don’t sleep. My career is going in the toilet. My little girl can’t study. And all because some fat jock slob play a little football and “block a kick.” I don’t even know what it means, to block a kick, but if you can do it, then any idiot can do it!

Quotes from “New Cowboy on the Block”
Written by Dean Young
Directed by Cyndi Tang-Loveland

From “Chan” comes feedback:

Dear sir, We have purchased your book titled trend following and we could hardly finish half of the book as it was poorly written with no concrete information that we can learn from. Then we came to know of another book also written by you. On the safe side we did not buy it but we borrowed it from the local library. Regret to say but your writings is a rambling of nonsensical writings with no information that we can learn. Your writings is poor when compared to William J Oneil where a lot of information can be learnt from the book. Yours sincerely, Chan

Apparently Chan doesn’t like my writings!

There is nothing unusual about the oil move of the last year. Markets, and go look at just about chart of the last 40 years with a big move, shift unexpectedly and move great distances all the time. Stocks, gold, cotton, corn, dot-coms, whatever - markets trend. Oil just so happens to be the life blood that affects everyone’s pocketbook perhaps more so than any other market, but from a trend perspective, and especially if you have been long oil in some form or another, has been a beauty of a money making opportunity. Better to live in the here and now than sit around and complain about the good ole days, even if the good ole days were only a year ago! Time marches on. Adjust or die.

Hunter S. Thompson had a way with words and great insight into the human condition:

In a nation ruled by swine, all pigs are upward–mobile and the rest of us are f––-ed until we can put our acts together: not necessarily to win, but mainly to keep from losing completely. We owe that to ourselves and our crippled self–image as something better than a nation of panicked sheep.

From a reader:

Hello Michael. I am a regular reader of your blog and website, and owe it to you for correcting all my psychology towards the market. Trend following taught me to look at things from a rational and objective way. And for that I am thankful. I thought you may find this interesting, I am a resident of Karachi, Pakistan. The Stock exchange has lost more than 27% in the past month. Instead of liquidating their positions, what do investors do? They actually organized a protest against an “oppressive” government and demand that the government fix the situation! Unbelievable. Surely no-one thought of calling the government oppressive when the market had gone nowhere but up for the past 8 years. Now they are in trouble and want the government to bail them out. And here’s the silly part. They could have set stop losses, or better still chosen to go short, but it’s as though the average investor does not wish to think straight and ends up wanting a free lunch instead! I’m glad I can now see through it. And I’d like to thank you for doing an excellent job. Here’s the link to the news clipping. Have a nice day, Regards.

I could see US investors doing something every similar! Wait, isn’t that what they have been doing with real estate and the FED over here?

An article from The Washington Post titled “How Thinking Costs You” is good stuff. An excerpt:

Four months ago, judging myself to be the next Warren Buffett, I logged on to my Charles Schwab account and did something that in hindsight was astonishingly stupid, even for my own very long roster of financial screw-ups. I clicked over to the trading page and bought shares of Citigroup. The company, like most of the big Wall Street banks then staring down the subprime meltdown, was limping along. The headlines were bad. The chatter on CNBC was pessimistic. I saw a bargain. I saw a company whose credit card bills and offers show up in millions of mailboxes every day. Just as soon as the banks got their write-offs out of the way, optimism would return to the sector. There would be more buyers of the stock than sellers. I would profit. Now here I am today: My investment is down 22 percent. And I’m still holding on to the stock. Am I, as my wife and closest friends sometimes insist, the dumbest man walking the Earth.

More.

This Van Tharp trader “test” reminds me of the Myers Briggs personality test.