ARCHIVED COMMENTARY
Money Karma
For edition of August 03, 2006
I’ve always had quite a knack for finding parking spaces, even in neighborhoods where there’s a big event going on. If I’m cruising around in search of a space, the steering wheel seems to tug subtly to the left or right, guiding me onto whichever side street will have room for just one more car. Not to sound ungrateful, but there are times when I wish that I could transmute my fabulous parking karma into merely impressive lottery karma. So far, though, no luck. My younger son once picked a $12 winner using his own numbers, but that was and still is the biggest lotto win in Ackerman family history. The reason I haven’t improved on his good luck, perhaps, is that karma for winning at anything grows with confidence. This implies that if one is absolutely confident that a parking space will materialize when it is needed, it will. But whoever heard of someone who is absolutely confident of winning a lottery?
Money karma is something else, though – achievable, as far as I can tell, if one is unassumingly confident that the money part of one’s life will never be a problem. A corollary is that the recipient will be blithely unconcerned about where the money will come from, or how. I must have imagined I was on my way to achieving money karma not long after I began working as a market-maker on the Pacific Stock Exchange in the late 1970s. Within eight months of arriving on the scene, I was making twenty times what I’d made just a year earlier as a newspaper editor. But the easy money didn’t last, and I’ve got a theory as to why: It’s because, deep down, I couldn’t believe that I was making so much with such little effort. Let just a mote of such doubt creep in, and you can kiss money karma good-bye. In my case, it was more than just a mote of doubt; rather, it was the trauma of seeing half of my net worth vanish in mere minutes when shares of Cray Research began to trade on October 19, 1987.
Just last weekend, at the first-ever reunion of the Pacific Stock Exchange, I bumped into Jim Burke, a guy who deserves a hallowed place in the money-karma pantheon. I never knew Jim to be on the wrong side of a big trade, or of a bet, but his legend was sealed when he bought a seat on the PSE for just 25 cents. That was the all-time low, and well beneath the price at which seats had been trading at that time. It is probably the lowest price for which a seat has ever traded on a major exchange. Years later, at the height of the dot-com boom, a PSE seat was valued at more than $500,000, making Jim a bigger winner percentage-wise than someone who had bought IPO shares of Cisco Systems. Jim still trades from upstairs, and I asked him whether he does so without regard to events in the real world. By this I meant the horrific things that we obsess over each day and which deeply trouble news junkies, your editor in particular: Hezbollah, Iranian nukes, bird flu, $100 oil, North Korea, rising mortgage defaults – that kind of thing. Jim said that although he was aware of these troubling issues, they were well out of mind and had no bearing on his trading. Karmic benefits aside, he probably sleeps better than most of us.
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San Francisco Seminar
I was scouting locations in San Francisco over the weekend for the upcoming Hidden Pivot Seminar. A specific date has not yet been set, but it now looks like the two-day class will be held in February, 2007. If you’re interested and haven’t contacted me yet, please let me know via-email . Is this seminar for you? Here’s a prospectus so that you can decide for yourself:
Trust Yourself,
Not Some Guru
Would you like to be able to forecast trends and price swings so accurately that you’ll never again have to seek advice from the supposed experts? That is the goal of the Hidden-Pivot Seminar: to teach you to read the markets so confidently that you will come to trust your own judgment over that of gurus who forecast for a living.
My proprietary Hidden-Pivot Method derives from a few simple principles that I’ve developed and honed over the last twelve years. It is the simplest and most powerful method I have ever found for predicting trends and price swings accurately and with complete confidence. Moreover, it works in any time frame and for virtually all types of securities, including stocks, indexes, commodities and options.
Inhale…Exhale
The system is based on the theory that stocks and commodities are constantly trying to balance yin and yang energy as they move around. Their ups and downs are analogous to breathing in and breathing out, and in the end these complementary actions must offset each other precisely. The trick to understanding how the process works in the securities markets is to visually match up trend segments that are part of ABCD patterns on charts.
Consider as an example the chart of eBay below. The key number is 28.89, the presumptive D target of a pattern defined by points A, B and C. The target is what I call a “hidden pivot,” and it is calculated by subtracting the length of the A-B segment (3.90) from point C. In the example, the resulting value is 28.89, a mere two cents from where eBay actually turned. In retrospect, we see that this would have been an excellent spot to buy the stock using a stop-loss as tight as a nickel. It also would have provided a precise target to enable disciplined short-covering.
A Simple Trick
The visual trick to identifying these patterns is really no trick at all. You simply find the B-C leg first, then move backwards to locate A. Those three price points are all you will need to calculate a D target. Note that the B-C leg is simply any countertrend move that looks like it might eventually be the axis of symmetry dividing an AB impulse leg from a CD follow-through leg.
That’s all there is to it. Since the system is based entirely on price action, you won’t ever have to consider trading volume, oscillators, channels, MACDs, trendlines or any of the other conventional indicators that most technicians use. And with just one more trick, you will be capable of forecasting as accurately as those who do it for a living. You need only locate the exact midpoint of the B-C segment’s second leg. Once you are able to find this specially endowed hidden pivot – a simple task for the trained eye – you will never again need an “expert” to tell you what a stock, index or commodity is likely to do next.
The Hidden Pivot Seminar is held over two days, during which time you will learn how to spot the most promising ABCD patterns. You will also learn, in under 20 minutes, a surprisingly easy way to use stochastic indicators and other oscillators to enhance your timing. Finally, you will learn how to use hidden pivots to manage risk so that you will always know exactly when to cut losses and when to let profits run.
Free Mentoring
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An important feature of the seminar, at no extra cost, is post-grad mentoring in a hidden-pivot chat room set up by some of my students. Here is what one of them, Hunter Reynolds, recently had to say: "We have all come a long way. I think everyone here is making a little $$, or we would be doing something else by now. I can honestly say I am up about ten percent, maybe a little more, since your class. I am pretty conservative. I just trade from the long side, but I'm getting really good at picking the hidden-pivot reversal points for the uptrend!"
I should tell you that seminar grads who frequent the chat room are coming to understand my method as well as I do. Indeed, some have adapted what they learned in highly effective ways that I could not have foreseen. Buttressed by the continuing lessons of the chat-room, the Hidden Pivot Seminar offers an opportunity to acquire powerful analytical tools that will serve you for a lifetime.
A Student’s Experience
Here is what one of my grads, Hunter Reynolds, had to say recently about the chat room:
"We have all come a long way. I think everyone here is making a little $$, or we would be doing something else by now. I can honestly say I am up about ten percent, maybe a little more, since your class. I am pretty conservative. I just trade from the long side, but I'm getting really good at picking the hidden-pivot reversal points for the uptrend!"
Dates are not yet firm for a fourth seminar to be held in Sydney, Australia, but it looks like it will take place either in November 2006 or February 2007. The class is filling up, so do let me know soon if you’d like to attend.
