Black gold... Texas tea

[beardrech]

I guess you weren't around in the 70s. Massive bull markets in energy and natural resources. Everything else was complete K-rap.

Everyone has this idea that stock prices are "telling us something" about something else, like the economy, or the price of another kind of stock. Stock prices don't "say" anything about anything. Except themselves of course. They make patterns, and from those patterns we can deduce what they are likely to do beyond this point.

 

But it's really dangerous to make these assumptions beyond that. Just because one group moves, that does not imply anything about what another group will do. The correlations are really haphazard. It's amazing that conventional wisdom in this regard is so ingrained.? People actually think that the stock market "knows something."

 

It's ridiculous. It's religious faith with no basis in fact.? People believe it because they choose to.? But it's absolute nonsense. The only thing stock prices tell us is how much extra liquidity is in the system, or how scarce liquidity is. That ties in with psychology. They feed on each other. Psychology weakens when liquidity dries up, which tends to make psychology even weaker. But there will be no real turn in the broad market unless liquidity is expanding. Certain groups that are in favor can move, but a lack of liquidity will limit the moves to those groups. Groups which are moving tend to get all the love.

 

None of which is to say that I am or am not bullish at the moment. For that, people will have to read the Wall Street Examiner Professional Edition. If you count the number of longs and the number of shorts among the chart picks, that should tell you all you need to know.? ?

 

And the total number of picks will tell you how strong my convictions are. A scale of 1 to 10 would fit nicely.

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Doc

 

My wife was (is?) a trained zoologist. A few of her courses were taught by a Professor Ginsburg who trained wolves into becoming pusillanimous wusses and alternately, rabbits into becoming viscious little carrot eating bastards..

 

To see how malleable and docile wild beasts were...

 

One of the attributes he encouraged his students to develope, while they were working in his lab, was to cultivate a rather unscientific anthropomorphism ,which translated, meant for the students to use human verbiage in describing their behaviour..he felt that using a purely scientific jargon would efface the more subtle niceties of animal conduct..

 

Now granted watching gauges in a powerhouse without attributing human motivation to them is warranted....

 

Similarly I agree with you that trying to put the accents of Lawrence Olivier on Stock charts and cycles is rather feckless....but, at the same time,metaphorically speaking, trying to surgically sever "gut responses" is, as you well know, practically impossible...No matter how hard we try, there will always be a residue of subjectivism in all of our judgements and decisions..

 

As evidence for the above,Time and again, we all, from time to time, invoke the trinity of "should,coulda,woulda" certifying the presence this deathless infirmity...

 

So the questioin then becomes: In what way can I put a face on this disposition so that I dont fall victim to its disturbing insurgencies???? Something like taming a wolf....

 

And by the way, we are very lucky that we have limits on our ability towards emotional self-mutilation....lest we enjoy the life of an occupational zombie

 

beardrech I keyed on exxon, and was about to make my move short, and I almost pulled the trigger, when this sumabittch removed the stake from my heart....G'damn him and may he go to heaven where he belongs...

[Brisbane Bear]

maybe we rally from here.

 

They did have Fleck on Gloomberg today.

 

[Slappy]

Doc

 

My wife was (is?) a trained zoologist. A few of her courses  were taught by a Professor Ginsburg who trained wolves into becoming pusillanimous wusses and alternately, rabbits into becoming viscious little carrot eating bastards..

 

...

 

 

 

[I_Am_Madness]

But it's really dangerous to make these assumptions beyond that. Just because one group moves, that does not imply anything about what another group will do. The correlations are really haphazard. It's amazing that conventional wisdom in this regard is so ingrained.  People actually think that the stock market "knows something."

 

 

Doc, i've pointed at the relationship for the past 5 years and it is what it is. Gold, oil and the Dow took turns hitting new highs during this span. We saw "all time" highs across the board in the past year. I'm not not making any assumptions. You can pull up the charts. You can't have it both ways big guy, one minute you ask that folks don't make assumptions, but then you'll refer the action of the 70s to discredit what i'm merely interpreting on the charts over the past 5 years. You think this is burger king..."have it your way"..

Just teasing you a bit.

 

p.s.

I still think we are on the mist of a multi month rally here.

[Jimbo]

AUSTRALIAN BANKS

 

Have had a very nice sell off.

 

Will it continue.

 

Maybe later when the housing bust hits the fan but smells like counter rally time.

 

Too late to short now, short term long a better bet.

 

Some good values creeping into Australian stocks.

 

Perpetual even ASX.

[Jimbo]

DONT BOTHER

 

From the businessweek

 

How to Reenergize Starbucks

Howard Schultz is back in charge, but the coffee chain is running low on steam. We asked experts how they would perk up the ailing giant

 

They always have these articles.

 

As an investor if you own starsux stock you dont need to have the company energised.

 

You can escape, you can energise your return on capital by SELLING your SBUX stock and doing something worthwhile with the money.

 

SBUX cant escape its fate but its shareholders can through the magic of SELLING.

 

All the advice seems to be about reconnecting with the customer.

 

The problem with this advice is that the customer doesnt want to reconnect with SBUX.

 

When your a hip brand the customer will chase you and you can fight them of with a stick. BUT when your over, as Starbucks is, it doesnt matter how hard you chase the customer they will run away from you even faster.

 

Its a case of been their done that and onto the next fad please.

[DrStool]

Doc, i've pointed at the relationship for the past 5 years and it is what it is.  Gold, oil and the Dow took turns hitting new highs during this span.  We saw "all time" highs across the board in the past year.  I'm not not making any assumptions.  You can pull up the charts.  You can't have it both ways big guy, one minute you ask that folks don't make assumptions, but then you'll refer the action of the 70s to discredit what i'm merely interpreting on the charts over the past 5 years.  You think this is burger king..."have it your way".. 

Just teasing you a bit. 

 

p.s.

I still think we are on the mist of a multi month rally here.

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Let me expand on my comments to which the above refers.

 

This is not a matter of having it both ways, and I am not asking that anyone make assumptions about anything. I was pointing out that in the 70s we had a different set of conditions. Those conditions may be more similar to today's than the past 5 years, or they may not be similar. As a general rule, it's a bad idea to make assumptions.

 

This is a matter of liquidity and logic. The fact that something was true for 5 years does not mean that there was a cause and effect relationship, or that what had been the case will remain the case, because there is no cause and effect relationship, just a coincident relationship based on a causal condition which may have changed over the past 7 months.

 

When liquidity is expanding, that causes virtually everything to move in a bullish arc together. When liquidity is not expanding the cause of the synchronicity is no longer extant. The groups that are moving get all the love, and those that aren't getting the love get dumped so that the players can give their love to the groups that are.

 

So while I do not disagree with your characterization of the market's bullish potential at the moment (WSE Pro chart picks have been 100% long since 2/4) drawing the conclusion that one group will move because another is moving is a logical fallacy. They moved together for the past 5 years because liquidity was expanding. In a contracting liquidity environment they are more likely to go their separate ways.

 

The bullish potential for any stock group can be seen by looking at the chart of that group, or for the market, by looking at the market averages. If liquidity begins to expand again, all groups can again move more or less together. But if liquidity does not resume its expansion, in my view it is dangerous to make the assumption that one group will follow another because that assumption is based on a logical fallacy, and the conditions which allowed that fallacy to appear true may no longer exist.