Don’t Talk, Just Trade…

[We’ve heard back from our friend James Tolard now that he’s had a chance to digest your responses to his very bullish forecast for stocks and gold.  In the note below, he says that although it’s one thing for James the commentator to offer opinions about the market, James the trader would rather simply do the trade and not have to justify it to anyone.  Those of us who have had the experience of trading with other people’s money know the feeling well.   RA]

Interesting responses. You may not remember this about my histoire, but from 1975 through 1998 I had a very good biz as a consultant, primarily in oilseeds, but also as a technical consultant, as the old guard did not take easily or kindly to technical trading. Tech trading was, however, becoming necessary, as the volatility in futures markets was such that even “serene” sideways markets required some money management. Anyway, over time, and as I began to push into my 40’s, I realized that no one takes a trading recommendation, particularly if you try to defend, rationalize, or otherwise advance it. Rather, I merely stated strongly and firmly that I think this is true, and that this and that would happen, etc. When I was right, they remembered; when I was wrong, they didn’t.

BUT, when I gave reasons,  they gave arguments — usually persuasive ones, too! — against my arguments, and the result was that I was always wrong. So, going back to a dictum which I think is famous, but if not, it should be:  When you make a decision, always give your decision; never give your reasons. The decision might be right, but the reason are always wrong! Clever.

Most Contrarians Are Bears

In my bullish forecast, I gave my reasons, including some decorative ones.  But few of the responses to my commentary dealt with the possibility of a higher market.  Nearly everyone weighed in on this or that bit of evidence. However, the main thing was the decision. The markets are ripe for a real contrarian — in this case, a bull (most contrarians are bears). And now, if you wake up one morning and the Dow is trading at 17500, everyone will be “surprised,” but worst of all, they will have missed a big move! What is speculation? It is an educated guess on the value of the market, its direction, the appropriateness of its price or all three.

Anyway, the responses have given me a shock. Maybe there will be some real strong reactions later. You can count on that. Nothing like the Euroview.

***

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  • Anonymous February 2, 2013, 6:21 am

    Actually, I have a piece set for tentative publication in Stocks and Commodities Magazine in the next few months regarding the Contracting Fibonacci Spiral the markets are trapped in…I had to retool the theory somewhat when I first presented it because it actually is following the mathematical behaviour to a tee. Absolutely bizarre to think that it would do that but hey, nature is amazing.

    *****

    Sounds interesting, Anon. Please keep us posted. RA

  • John Jay January 13, 2013, 7:27 am

    The Matrix is flickering.
    Mad Max awaits!
    From wxyz.com Taylor Michigan

    Link: http://tinyurl.com/b5o8ufm

    “A chaotic scene erupted at the Taylor Human Services Center when the crowd waiting for a Section 8 housing voucher distribution got out of control.
    7 Action News is being told there were 1,000 vouchers available and 5,000 people showed up trying to get one.
    The crowd had grown overnight as more and more people arrived. Witnesses say the line stretched for a mile down Lange Road.
    Police say, when the time came for the vouchers to be distributed, there was a mad rush for the door. Officers tried to control the crowd, but couldn’t.”

    And, when in the future, Ben’s (The Architect) Ponzi scheme fails, and the Matrix becomes unplugged?
    When Section 8 Housing, Food Stamps, Obamaphones and the rest of it are gone for good and all?
    When 1oo million or so citizens who have no skills other than signing up for benefits or a government job have to face reality for the first time in three generations or so?
    How will they react to their fate?
    Matrix, meet Mad Max!
    The Truth is out there, the Fed and DC are just relying on smoke and mirrors more all the time to conceal it from the masses.
    Oh Boy!

  • Mark Arthur January 12, 2013, 2:43 am

    The traditional short form of “never give your reasons” is “Never Apologize, Never Explain”; I’ve heard it more in the context of professional diplomacy than stock calls, but the foundational sentiment seems the same.

  • Jill January 12, 2013, 1:30 am

    Rick, I have a question for you that other folks might be interested in the answer to also. When you leave up a few touts for free on your home page, does that imply that your pivot system still continues to have the same predictions for the stocks that it did when they were written? E.g., since you left the touts up for the following, are you stil bearish MSFT, bearish BBY, & bullish PCLN, as you were when you wrote about them in November & December? Thanks.

    • Rick Ackerman January 13, 2013, 7:52 pm

      If a tout remains tradable I let it run, adding timely updates as warranted. My very bearish touts for MSFT and Best Buy (BBY) are long-term, supported by explanations that go sharply against the popular wisdom. In the case of MSFT, I have enjoyed being the only commentator to call Windows 8 an unmitigated disaster. Over the last few months, however, others have joined me, and now some are even calling for the ouster of Ballmer.

      Just this weekend, Wall Street Journal columnist Walter Mossberg, who invariably usually sucks up to Microsoft no matter how bad the product, came as close to panning the latest from MSFT O/S as he has ever gotten. An above-the-fold article over the weekend bore the headline “Windows 8: Not for Old-at-Heart PCs.” The actual review was far more damaging than the softball headline, implying as it did that anyone with other than a brand-new PC would have to be crazy to “upgrade” to Windows 8.

      Here’s a couple of telling paragraph from the review: “To be sure, people upgrading newer PCs, whose makers anticipated Windows 8 or have software patches ready to accommodate it, will likely have a much better experience. I learned—too late—that neither of the computers I was upgrading was on the list of models for which their manufacturers provided such patches. This may be because, in both cases, aspects of their hardware weren’t up to snuff for Windows 8’s more demanding requirements.

      “For instance, the touch pad on my Lenovo ThinkPad X301 laptop can’t be used to scroll in the new tabletlike Start Screen environment in Windows 8, or to perform certain Windows 8 gestures. And, on the HP TouchSmart 300, the touch screen isn’t precise or sensitive enough to reliably perform Windows 8’s touch gestures every time. Plus, the microphone doesn’t work. Oh, and to get the HP to stop freezing, I had to perform a procedure that wiped out most of my installed software, including HP and Microsoft MSFT +1.40% programs.”

      Regarding Best Buy, I think the company will be the first big box retailer to survive a reported death spiral. However, I see the firm’s share price getting halved before they turn things around.

    • Jill January 14, 2013, 5:02 am

      Thanks very much, Rick. I appreciate your quotes from the interesting article & all the other info you wrote here.

  • gary leibowitz January 11, 2013, 7:50 pm

    I just read that the expiration of the payroll tax cuts from 2010 will cause a person earning 50,000 per year to pay 1,000 more in taxes. I wonder if the “feel good” consumer will still spend and borrow.

    Now look, you got me taking the dark road.

  • redwilldanaher January 11, 2013, 6:11 am

    Great work Buster!

  • gary leibowitz January 11, 2013, 12:39 am

    The moment of truth is finally here! I have waited a long time to see signs of a final surge, and we are close.
    While the world economic data has shown improvement the real acceleration has not. It is about to change.

    In fact when economic activity shows real pick-up the final surge should also appear.

    My timing scale is either wrong or we have one more slow draw down before the final 15 percent move. Over 13 months ago I put the top at around May of 2013. This is based on an assumption that the next market bottom will hit at end of 2014. I am using a theory called the “contracting fibonacci spiral” which hits it terminal end game at around 2020, with 2014 as a major low before some up and down recoveries. My supposition is that most steep bear contractions take 18 or so months to hit its bottom. If I stick with late 2014, May of this year fits in nicely. If I am right than mid-February should be the last trough before the final surge up. If I am wrong than I stay pat with my bets made in November.

    I also find it interesting how sanguine this crowd is becoming. This in itself is a warning flag to me that we are approaching the end of this 4 year up move.

    Hey, who knows, perhaps I will be the only one shouting to get out when the time comes.

    I have basically repeated my theory over the course of these 13 months and am surprised myself it still stands.
    Not much longer to put it to the test.

    I might just replace the VIX with this blogs reactions.

    • Larry D January 11, 2013, 3:51 am

      Wowee Gary- even Jeane Dixon found that some of her prognostications came true. And she didn’t even use computers.

    • redwilldanaher January 11, 2013, 6:15 am

      Gary, as usual, you are disingenuous idiot. The blogs reactions have been more about you being a cowardly fraud that never answers anything directly than about your prognostications.

      Please teach us how to become so effective at living in a fantasy world. We may need to know if the policies you espouse continue to be implemented by the worldwide network of megalomaniacs…

      &&&&&&

      In fairness to Gary, it must be noted that he has been more forthcoming lately with timing and position details. Also, I’ve been very impressed with the results some forecasters have achieved using Fibonacci spirals. Perhaps he’s onto something? RA

    • gary leibowitz January 11, 2013, 7:39 pm

      Hey Rick, was that you? Must have had a good vacation. Glad to see someone is looking into the contracting fibonacci theory. It does fit into your doom and gloom outcome, but suggests the absolute terminal point (low) will be around 2020. There is a hint that the intermediate bottom of 2014 could be some 50 percent lower from here.

    • Redwilldanaher January 12, 2013, 8:01 am

      I won’t deny that F spiral work can be of great value. Been around for a long time. However Gary remains notorious for evasion ’round these parts IMO…

    • gary leibowitz January 14, 2013, 12:50 am

      Red, the sky seems to have fallen for you only. A rare treat by the gods.

      Me, I have been as unwavering and honest as humanly possible. I have gone out of my way to listen to your ravings, but a mad dog must first be purged of the devil inside before he can receive reason.

    • mario cavolo January 14, 2013, 5:30 am

      Hi Rick, Gary…then the fibonacci spiral hitting its fina downstroke at 2020 is supported well by the macro-demographic picture for the U.S. too. The next eight years will see burgeoning of retiring baby boomers and Gen Xr’s…however that will be followed by a rising of the next generation. At that time, the demographic situation for jobs, housing, etc. will be looking much better moving forward….this according to interesting comments I read by a hedge fund founder John Thomas who seem to know his S&^t….

      Cheers, Mario

  • rv2798 January 10, 2013, 8:56 pm

    buster, that was profound. I hope that some of us will have the courage and patience to start putting it into action. we all have a duty to make the truth known to those around us in whatever way we can.

  • Buster January 10, 2013, 11:30 am

    I’m neither bull or bear on the digital price of any asset, despite seeing many sad realities in the real world. Further, the normal investment rules of asset/liability, a la ‘Rich Dad, Poor Dad’ philosophy, need to be assessed together with the predominant trends of our time; big government & global corporate dominance. This duo are working in tandem for the sole benefit of the elitists who largely control them both, with the root of the rotten tree being their private central bank network across the globe which maintain a debt based monetary system. The ultimate purpose of the elitists maintaining the current world system known as ‘Corporate Fascism’, is to own & control everything & everyone on planet Earth. This has been openly stated by certain members of the regime.
    Trying to navigate the investment arena is increasingly difficult, particularly due to the fact that rules, laws & regulations are being corrupted to the point where we can now assume that the lawless & criminally minded are running the system almost entirely. Getting out alive becomes more important than what investments to make. It has been reasoned that property rights are the foundation of a successful economy. Well, we haven’t really got any, as your assets can be confiscated on a whim without due process at any time. The scandal of MF Global’s collapse shows that even seeming sensible investment in a major organization is no protection.
    The ever increasing tabs on all assets classes together with the inevitability of a cashless, digital economy will leave nowhere to hide from an arbitrary tax system or outright confiscatory government with a global reach.
    Individual resistance seems all but futile as the Sheeple have lost any real sense of society or responsibility. Around 10,000 Roman soldiers were able to control a resistant British populace numbering in the millions, & they didn’t have any of the weapons, both known & developed in secret for population control, possessed today. Peaceful resistance still leaves the Sheeple at the mercy of increasingly intrusive government & corporate attack on our livelihoods & even our very lives via big pharmaceuticals, industrial farming & food corporations, employing methods which are detrimental to animals, the environment & human beings alike.
    The mismanagement of our health via possible deliberate deployment of viruses & contaminated vaccines that create further health defects coupled with likely deliberate acidifying of the atmosphere to aid quickening of an eventual epidemic leaves even some authorities seriously questioning whether criminal prosecution needs to be brought against the global corporatist regime, as in the case of a European investigation into the vaccine industry recently. Should we be outraged & fight, run or simply invest in the beneficiaries of these crimes? The choice is yours.
    Whatever, the writing is on the wall & just as sure as gold was beginning a bull run in 2000, the trend in place of global Corporate Fascist dominance & oppression seems all but inevitable in its determined realization. Being bullish or bearish doesn’t alter the outcome, as many seem to be concluding. We see both bullish & bearish trends in all sorts of assets classes, & seeing a worsening real world shouldn’t necessarily make one a bull or bear in any of them in particular. However, how we view & respond to these crimes may be more important. Maybe bull & bear alike should invest in our humanity, as hopeless as the situation looks.

    So, I say “Don’t trade, talk (or do)”, even if it’s just to shine a light on & reveal the criminals who are guilty of so very many despicable crimes now & throughout history, whilst elevating their status above all others. Our voices may be just cries blowing in the wind, but
    maybe in doing so, rather than merely making a fleeting profit, we could actually be making history…..???

    “for that day will not come until the rebellion occurs and the man of lawlessness is revealed ” -2 Thessalonians 2:3–10

    “You’ve got the words to change a nation
    but you’re biting your tongue
    You’ve spent a lifetime stuck in silence
    afraid you’ll say something wrong
    If no one ever hears it how we gonna learn your song
    So come on, come on
    Come on, come on.
    You’ve got a heart as loud as lions
    so why let your voice be tamed
    Maybe we’re a little different
    there’s no need to be ashamed
    You’ve got the light to fight the shadows
    so stop hiding it away
    Come on, come on
    I wanna sing
    I wanna shout
    I wanna scream ’til the words dry out.
    So put it in all of the papers, I’m not afraid
    They can read all about it
    Read all about it
    oh oh oh oh oh oh oh oh oooh
    oh oh oh oh oh oh oh oh ohoh
    At night we’re waking up the neighbours
    while we sing away the blues
    Making sure that we’re remembered
    cos we all matter too
    If the truth has been forbidden
    then we’re breaking all the rules
    So come on, come on
    Come on, come on
    Let’s get the TV and the radio
    to play our tune again
    It’s ’bout time we got some air play of our version of events
    There’s no need to be afraid
    I will sing with you my friend
    Come on, come on
    I wanna sing
    I wanna shout
    I wanna scream ’til the words dry out
    So put it in all of the papers, I’m not afraid
    They can read all about it
    Read all about it
    oh oh oh oh oh oh oh oh oooh
    oh oh oh oh oh oh oh oh ohoh
    Yeah we’re all wonderful, wonderful people
    So when did we all get so fearful ?
    Now we’re finally finding our voices
    So take a chance, some help me sing this
    Yeah we’re all wonderful, wonderful people
    So when did we all get so fearful ?
    Now we’re finally finding our voices
    Just take a chance, some help me sing this” EMELI SANDE – READ ALL ABOUT IT; PART III LYRICS

    • Tech-trac January 10, 2013, 3:10 pm

      BRAVO Buster!

    • Duane January 19, 2013, 1:38 am

      Buster, great missive as always. If you get a chance, I left you a question under your reply on the bullion vs. the dollar article. Thanks.

  • Harry Dyner January 10, 2013, 7:50 am

    The only comment I can make supports Tolard’s comments because I remember reading a history of the German inflation in the 1920s. Their stock market had a major bull run while their currency crashed. I don’t know how their market did in real terms (against gold), so I don’t know whether the German people would have been better off in gold. In any case, there is the question of whether they sold too late, even before the top, and then were stuck with useless marks and couldn’t buy gold or other currencies.

  • John Jay January 10, 2013, 5:27 am

    Because there has been so much intervention in the markets for such a long time I have come to the following conclusion.
    It is more of a high stakes video game than a supply and demand driven market where price discovery takes place.
    So, in reality you are playing “Space Invaders” with your margin money.
    Use that assumption and save yourself a lot of time and aggravation.
    “Space Invaders”!
    It’s all strictly timing your shots at the little descending creatures before they get you and your money.
    “Space Invaders”!
    Got it?

  • Jill January 10, 2013, 4:45 am

    Rick himself is expecting the market to move higher, at least in the near term, according to his pivot method. This is pretty much a bear board, though, so you won’t find many bulls here.

    Trading can be like politics. You choose your tribe (bull or bear) that has the beliefs you are comfortable with. And then you find reasons or facts or perspectives that back them up. Reality doesn’t necessarily enter into it– unless you have an objective method like Rick does, that does its own thing, regardless of anyone’s opinion. At least with the market, it can be very clear cut very soon whether you are right or wrong.

    &&&&

    True enough. I’m bullish as all get-out until the E-Mini S&P hits my 1494.50 rally target. We plan to get short there, risking bupkus, because we can. The Dow would be at about 13700. RA