I feel pretty good as this week starts. I don’t know if I mentioned it, but last week, I went to South Lake Tahoe for a couple of days. Yup, I needed a little break, and the mountains and the water seem to energize me. I also played poker as well, but that did not work out so well. Frankly, to win, one has to get cards that “fill out.” Simply, when the three cards on the flop come out, they, along with the two cards in your hand, have to make a playable hand for you. If that doesn’t happen, you really can’t play.
Over two days, I saw the same reality happen over and over again – the flop did not give me a hand to play, so I couldn’t play many hands, even when I tried. Not only does this lead to losses (slow bleed of your bank), it also leads to frustration (play whatever you get), and that then leads to bad decisions (see it out to the river), and that then leads to more losses (bad bets).
Yup, you see where I am going with this, right? In the market or at the table, the same reality applies – sometimes you hit a bad streak, and if you let it get to you and then try to play through it, you are likely to make bad decisions and lose. The better choice is to stop playing, take a break and regroup. Yup, go to South Lake Tahoe for a couple of days and be content with just kayaking and swimming in the lake …
The week coming looks to be less than hopeful for the market. The bad attitude has already set in, despite last Friday’s romp to the upside, although that huge run up tells us, once again, the market wants to go higher. The problem is the market just can’t “fill out” a hand. China’s news on Friday is the Ace-King, but Monday comes and the retail sales data comes out as 3-7- 9. How does one play that?
Not really a question , but a comment – governments and central banks are just as guilty of rate manipulation and so it strikes me that this a bit like the pot calling the kettle black. Where were the regulators and legislators when this was happening?
True, governments and central banks manipulate rates, but they do it in the open and through legal channels, and they don’t do it for greed. They manipulate rates for the larger good – to regulate the flow of money for either speeding up or slowing down an economy. As to your question, I believe we will find out where the regulators and legislators were, as this LIBOR scandal is a train picking up steam. Soon enough, governments and legal types will be formally asking, who knew what and when …
The pipeline is full of IPOs that are ready to come out and once we get a bid to this market, you are going to see the floodgates open and a lot of IPO’s come out.
The above is an interesting “prediction.” I haven’t had time to study this, but if it is true, the direct beneficiaries will be the banks. Right now, the big boys seem a bit beaten down, even if Citi came in above the numbers today. Something to look at and think about, certainly, as is the idea represented below. More to come on this idea as the week unfolds.
America’s economy is certainly in a tender state. But the pessimism of the presidential slanging-match misses something vital. Led by its inventive private sector, the economy is remaking itself. Old weaknesses are being remedied and new strengths discovered, with an agility that has much to teach stagnant Europe and dirigiste Asia.
Trade in the day; Invest in your life …
