Quote of the Day: On Markets
By Barry Ritholtz - February 12th, 2009, 11:30AM
A friend I used to work with who buys distressed debt/CDOs emails me this:
I don’t remember when you had this on your site, but it caught my eye. I printed it and hung on my computer screen. I read it once a day. It restores in me faith that my perseverance, honesty and respectful treatment of all I come in contact with in business is the only way to do this thing called life.
I totally forgot about that, and thanks to Google, I was able to find the original version of that:
It is the markets’ job to reallocate money from the ignorant to the intelligent, from the lazy to the hard working and studious; from the naive to the educated, and from the speculator to the investor.
My response was “Hey, that’s really good! Are you sure I wrote that?”
Tweet
Facebook
Reddit
Digg this!
February 12th, 2009 at 11:41 am
Barry–A lot of truth in that statement…too bad the markets weren’t functioning properly the past few years.
Someone else once said that the job of a bear market is to return the money to its rightful owners. So far, the current bear market isn’t working out that way. A lot of *criminals* are doing just fine and a lot of innocent bystanders have been or will be creamed.
February 12th, 2009 at 11:46 am
Hey Barry — Quell the commentary!!! (Especially as it relates to S & P)
February 12th, 2009 at 11:48 am
so where does everybody putting all their Social Security money into the stock market fall within this paradigm?
February 12th, 2009 at 11:56 am
I think you have to add “eventually” to that statement – then it becomes perfect.
I sat on the sidelines for years and watched with frustration and anger as the real estate bubble raged, and the ignorant, lazy, naive, speculators were rewarded – year after painful year – all for watching Kramer and Kudlow, parroting the NAR talking points, and generally mindlessly following the herd. I pontificated regularly to anyone who would listen – but most people laughed, shrugged it off, called me a “conspiracy theorist” or “too cheap to buy real estate.” Wow, I sound like Peter Schiff – lol.
Anyway the point is that you can be “right” during those periods, but you are also human. It is just so hard to control your emotions, stick to your convictions, and wait. Especially when the whole world seems to have gone mad. I used to have to search the web to find a single mainstream commentator who dared call real estate a “bubble.” It was taboo. Now they say it openly during Congressional hearings. My how things change . . People’s capacity for self delusion and self-censorship is virtually limitless. If I learned anything during this last bubble – it’s that.
And this is what makes investing *hard* More than being smart or savvy or hard-working, it’s also the capacity to master your emotions in the face of adversity. That, to me, is the hardest work of all.
February 12th, 2009 at 12:25 pm
@brianm: “the waiting is the hardest part…” Right on.
Barry, speaking of “reallocatinh money from the ignorant to the intelligent”, Kedrosky has some details of the past and present positions of the Harvard endowment. Not only were these guys complete tools last year, it looks as though they went to the dartboard and played “Blind ETF Darts” to come up with their 2009 portfolio.
http://paul.kedrosky.com/archives/2009/02/12/a_closer_look_a_1.html
It is really amazing to me that people get paid to invest as badly as these guys obviously did last year. I don’t even have an MBA and I beat these guys by about 25 percentage points.
(Ah, maybe it’s BECAUSE I don’t have an MBA…)
February 12th, 2009 at 12:28 pm
Barry,
You basically restated the Coase Theorem, which states that if transaction costs are low enough (i.e., an efficiently functioning market, as you observe), then wealth in its various forms will necessarily flow from those that value it less to those that value it more highly, or will be converted from one form to another through market mechanisms, e.g., in 2005, JPMorgan Chase would gladly trade some of its cash for some of a homeowner’s income if it were secured by the home. The homeowner valued the cash more than the home equity or the income, and JP Morgan Chase valued the investment return, as represented by the income stream, more than it valued the cash. Didn’t really work out so well, but the “market” did exactly what was intended–in this case, efficiently converting wealth from one form to another.
February 12th, 2009 at 12:33 pm
CNBC is having an individual investor Town Hall right now (at least they didn’t have one when Dow hit 14K). Think for yourself, don’t be scared contrarian rahrah session. That tells me we’re not at the bottom yet.
All good concepts but everything but Larry Kudlow leading “mustard seed cheers” with pom-poms. Lots of seers like Wilbur Ross, Warren Buffett et al underestimated the bear of our lifetime.
February 12th, 2009 at 12:35 pm
Unless the government gives money to failed financial companies – then the ignorant get rewarded while people who had nothing to do with their ignorance get bashed. But least we forget to give bonuses, we have to remember how important it is for us to all help failed leadership retain top talent. That way when they fail again they can do so with the best.
February 12th, 2009 at 12:42 pm
words to live and trade by
amen
February 12th, 2009 at 12:52 pm
Leaving the salt mine early today boys..the sermon for today comes from the book of INITIAL CLAIMS chapters 1 and 2…seaonally adjusted vs non-seasonally adjusted…I know you’ve heard the message before, so sit in your pew and don’t fidget…
http://www.dol.gov/opa/media/press/eta/ui/eta20090135.htm
It appears to your (uh-humm) pastor that there were another 73,000 more non- seasonally adjusted claims than seasonally adjusted for last week.
Brother Ritholz, in his preparatory remarks prior to turning the pulpit over to me, says “It is the markets’ job to reallocate money from the ignorant to the intelligent, from the lazy to the hard working and studious; from the naive to the educated, and from the speculator to the investor..”
Brother and sister, I come to you today to tell you that the difference now in these two figures is more than one million in two months..
Do I hear an amen? Thank you Brother Leftback….back in the last row, closest to the exit…thank you..
All of us here today are trying to go from the naive to the educated..and will try to understand the vast differences between these two outcomes…could it be that something isn’t right here?
Thank you for your attention…on your way out be sure you check your shoes…I think I smell something up here in the pulpit, and it may have come in today with the sheeples….I will have another sermon on this as conditions warrant….
Amen.
February 12th, 2009 at 12:58 pm
Well, nuts, wrote a long diatribe, so long it timed out and didn’t take…oh, well.
SA vs NSA initial claims…
Difference now more than one million since December….
http://www.dol.gov/opa/media/press/eta/ui/eta20090135.htm
It smells in here…and I know what it is…
February 12th, 2009 at 12:58 pm
Alot of truth in those words for sure. Very well written.
Cheers,
February 12th, 2009 at 1:05 pm
Didn’t we write this story here a couple of days ago?
Shades of Leftback’s BARF…
http://finance.yahoo.com/news/World-Trade-Falling-zacks-14325034.html
World Trade Falling Fast
(It’s the falling exports/imports/ global/ sychronized/ thingy….)
February 12th, 2009 at 1:14 pm
@Bruce: At risk of stating the obvious, trade collapsing will be due more to deleveraging on a global scale than it will be due to protectionism. Massive Deleveraging = Massive Decrease in Demand = Deflation. This process is going to play out one way or another. The question is how much money will be spent (wasted?) trying to keep the game going, how long this will play out, and what the intended and unintended consequences will be (e.g. hyper-inflation, wars, etc.).
February 12th, 2009 at 1:15 pm
Time to go, class, but I thought you could use a little humor..
http://dealbook.blogs.nytimes.com/2009/02/12/greenspan-says-he-was-mystified-by-subprime-market/
Greenspan Says He Was Mystified by Subprime Market
Perhaps he should have blogged….tough when some members of the class know more than the teacher…now that all the cows are out of the barn…NOW you tell us..
February 12th, 2009 at 1:20 pm
@Bruce: Time for Greenie and other “economists” to go back to school and re-write the textbooks. This crisis is making fools out of a lot of people who had been previously canonized as “geniuses” and “rock stars” by their fawning media accomplices. This part of the crisis I’m thoroughly enjoying.
Charlie G. reporting on CNBC that the Goldman crime syndicate recently had an “emergency meeting” at its headquarters with 20 of the top hedge funds and private equity funds about the Geithner plan. Would love to have been a fly on that wall.
February 12th, 2009 at 1:27 pm
Manny:
Leaving early to go run, and won’t be in the office tomorrow…but I have certainly become more cynical as the evidence of incompetence by our leaders, especially economic leaders, piles up…
My buddy, who makes rubberized parts for the auto industry, has told his employees his company is closing and to look for jobs after the end of April…( I posted on this before, and this is the last, I guess)..
Back Saturday.
February 12th, 2009 at 1:28 pm
The folks at CNBC are such a waste of time. Of course they think the idiot hedge funds and IB’s that got us into this problem are the one’s to now tell us how to fix it. Their solution: use the taxpayer to staunch their losses. Who would have guessed it?
February 12th, 2009 at 1:32 pm
I love that statement, accept for the last few words, “…from the speculator to the investor.” I totally disagree with that line. In a fiat currency system, (which are doomed to fail at some point) the investor is destined to be broke. Ask any of our pals in Japan.
February 12th, 2009 at 1:42 pm
You could add:
It is the Government’s job to reallocate money from the smart and hardworking to the dumb and lazy so they don’t kill you for your money.
February 12th, 2009 at 1:45 pm
@Kyle: But wasn’t it the supposed “smart and hardworking” people that got us into this mess?
February 12th, 2009 at 1:46 pm
maybe after 25 years those words of wisdom will hold true but i would not hold my breath
February 12th, 2009 at 1:51 pm
How ’bout this one:
It is the governments’ job to reallocate money from the reponsible to the irresponsible, from the hard working and studious to the lazy; from the prudent to the greedy, and from the self-sufficient to the dependent.
February 12th, 2009 at 2:00 pm
BR:The problem with this is that it presupposes that you have to have an advanced knowledge of forensic accounting in order to participate in the stock market. I know lots of smart and hardworking people who aren’t financial experts. That hardly means that they should be at the mercy of financial crooks anymore than they should be at the mercy of incompetent doctors who also possess knowledge and skills that the layman doesn’t.
Speaking of good quotes, I came across this great little piece of commonsense on Geithner and his plan from Nate Silver who recently came to fame on the electoral polling front. He’s an economics grad from the University of Chicago so maybe that accounts for his sense of reality. I particularly like his point that 99.999999% of people are unqualified to comment on this subject but that’s not going to shut any of us up although it may bring a bit of needed perspective to the value of the comments.
http://www.fivethirtyeight.com/2009/02/give-geithner-break.html
February 12th, 2009 at 2:01 pm
Hi Barry,
Keeping in mind your post about “The Lost Decade” and “Hedge Fund Performance by Strategy” and not wanting to wait forever to see a return on an ‘investment’, you could consider amending the end of your quote from, “and from the speculator to the investor” to something like “and from the investor to the fully automated futures momentum trader”.
February 12th, 2009 at 2:04 pm
@Mannwich,
speaking of GS, here is what I was wondering about them today:
Does anyone track the performance of the GS conviction buy list?
There have been some crap names on that list I’ve heard in the last 18 months, how has it done compared to the S&P for example.
Also, does anyone know what requirements need to be met to get on this list.
Just wondering.
February 12th, 2009 at 2:12 pm
@ben22: To get on the vaunted GS sell-side’s Conviction Buy list a stock also has to be on the GS Asset Management’s “Sell This F*cking Piece of Shit and Cut My Losses” List.
You know how this works, right?
February 12th, 2009 at 2:14 pm
@ottovbs: Many of us were also “unqualifed” to predict this disaster but did so far better than of the so-called “experts” that you cite. Chew on that for a little while.
February 12th, 2009 at 2:26 pm
A speculator worth his/her salt is necessarily intelligent, hard working, studious and highly educated in the behaviour of the markets, as is the good investor.
Then there are the naive and, perhaps, the gamblers.
February 12th, 2009 at 2:27 pm
Mannwich Says:
February 12th, 2009 at 2:14 pm
@ottovbs: Many of us were also “unqualifed” to predict this disaster but did so far better than of the so-called “experts” that you cite. Chew on that for a little while
…..I was one of them. However, the fact that I and many others were able to identify a real estate/stock market bubble forming hardly qualifies me to preside over the cleaning up the country’s financial system. It’s the difference between identifying you have flu coming on and performing brain surgery.
February 12th, 2009 at 2:32 pm
@ottovbs: I agree with that to a certain extent, but to dismiss any/all opinions from the “non-experts” smacks of elitist autoritarianism to me. Our leaders know best and we rabble should just assume that is the case, no questions asked? At this point, I would say that their woeful performance in recent years DESERVES to be highly scrutinized by a critically thoughtfuly populace, no?
February 12th, 2009 at 2:35 pm
The problems start when the government steps in to reverse this dynamic, as they’ve been aggressively doing since at least 1998.
February 12th, 2009 at 2:37 pm
All this time I though investing in my companies 401k was a wise idea. It turns out I am an ignorant, lazy, naive speculator. Mr. Market reallocated my retirement towards something else more worthy. C’est la vie.
February 12th, 2009 at 2:37 pm
ben22,
I have a feeling the GS conviction buy list is not provided as a public service…
February 12th, 2009 at 2:39 pm
Mannwich Says:
February 12th, 2009 at 2:32 pm
@ottovbs: I agree with that to a certain extent, but to dismiss any/all opinions from the “non-experts” smacks of elitist autoritarianism to me. Our leaders know best and we rabble should just assume that is the case, no questions asked? At this point, I would say that their woeful performance in recent years DESERVES to be highly scrutinized by a critically thoughtfuly populace, no?
I suggest you read Nate Silver’s comments. He suggests quite reasonably it seems to me that this is not the time for decisions by opinion polls but for experts who know what they are doing. When it comes to handling nitro glycerine elitist authoritarianism (aka professional expertise) as you dismissively call it is probably preferable to amateur hour.
February 12th, 2009 at 2:39 pm
A few thoughts on the day…
This week was a “D-train”™ week: dollar rally, deleveraging, deflationary data.. but I think it’s about over.
Some of the US$ and gold rally this week was a safe haven trade from collapsing currencies in Europe. Sterling, for example, has been… pounded. This last few weeks have seen some interesting observations.
Gold and the dollar have been trading in sync, instead of in opposition. Brent crude was rising today while WTI crude was falling. Gasoline and heating oil are rising while WTI crude is falling. The gold/oil ratio has risen to a phenomenally high level. Whether or not you think that gold is going over $1000, then this surely suggests that oil is due for a rally. Would you rather own oil or Treasuries for the next 5 years? Uh-huh, thought so.
I was thinking that if I were in charge of the economy and was afraid of a deflationary spiral – complete with public expectation of future price declines, a really good way of preventing deflation would be to defend the price of gasoline, since it feeds into the price of food and other consumer goods via the delivery chain. So even if there was a glut of oil, I might be tempted to tell the refiners to slow down their operation so that gasoline was forced to remain stable or rise slightly until the CPI reversed into positive territory. The restoration of moderate inflation would prevent deflationary expectations and stimulate a modest degree of spending.
Just a thought. I have been converting gold positions into oil/nat gas this week.
February 12th, 2009 at 2:43 pm
@leftback,
haha, right. That would only make too much sense.
Tranchefoot,
yes that’s why I’m asking, not a GS customer, don’t have the funds for that. I just hear the term every so often on t.v. “added to the GS conviction buy list” and then it’s a name like MOT, and I think to myself….
????
I’m pretty sure they took off PFE not long ago, that stock hasn’t been a buy for years.
February 12th, 2009 at 2:46 pm
I’m sort of surprised there is no post today from BR on the retail sales.
Anyone pick them apart? I haven’t looked at them at all just heard the “news”
Just a thought but I’m fairly certain that gasoline is counted in those figures, gas prices have gone up a lot since December so what did this do to the number?
February 12th, 2009 at 2:53 pm
Mannwich,
I meant my for my comment to expand what Barry wrote in a slightly mocking way. There is more to life than markets, and more in life that markets can feasibly/efficiently sort out. If your outlook is all smart rich vs poor suckers it’s a pretty depressing way to look at the world. I’m not saying that’s how Barry sees it, just trying to make an entertaining juxtaposition.
February 12th, 2009 at 2:56 pm
@Kyle: Never said that was my outlook at all. Just a frustrated citizen. If your’e not frustrated at least a little, then you’r enot paying attention. I’m making money today and am STILL frustrated because it doesn’t feel good.
February 12th, 2009 at 3:04 pm
@ottovbs: Fair enough but I would argue that “amateur hour” is what we’ve seen from many of our so-called leaders over the past 6-8 years. Why would I trust them? I do hope the new guy in charge has replaced this prior “amateur hour” and has the right prescriptions but he needs help from Congress and others in the private sector who contributed to this mess, so that’s a bit worrisome to me.
February 12th, 2009 at 3:08 pm
I agree with the quote except for the last line.
Investors are merely speculators (traders) with a longer time horizon.
This market action is so terrible. Cash SP500 really needs to hold that 800 level…
Gold bugs…I would consider trimming a little length…that market looks like its getting a little tired and lots and lots of people talking about it on CNBC…..
February 12th, 2009 at 3:15 pm
Is PPT just stepping in @ 15:07?
February 12th, 2009 at 3:18 pm
Mannwich Says:
February 12th, 2009 at 3:04 pm
Why would I trust them?
Because the democratic process in which I seem to remember you said you had participated in by giving a few bucks to Obama, has led to a change of management. Now it’s time to step back and let the doctor try to heal the patient. Geithner/Summers/Romer/Orzag etc seem to me to have the necessary expertise to fix the problem and are unburdened with the ideological baggage of previous administration. Do they have all the answers? Probably not and the reason they didn’t come out of the box with a fully formed masterplan probably means they also realize that. We haven’t elected a dog to bark ourselves, so I think we should give Geithner and co some time to sort out the problem. If the solutions to this were easy they would have been done long ago.
February 12th, 2009 at 3:19 pm
@Gabriel
Looks like J.Borcher backed up his truck
February 12th, 2009 at 3:19 pm
Here is the link to the sales data if anyone wants it. Gas didn’t add much, nothing really did.
As if most didn’t know but look at that drop off in auto sales from 07 to today.
http://www.census.gov/marts/www/marts_current.html
February 12th, 2009 at 3:30 pm
Gabriel.
Yes. Right as the market was about to make like a clavadista, Obama announces some new plan on Housing…..
Right on cue. The PPT lives on.
February 12th, 2009 at 3:30 pm
Nice bounce off 810. The trading range lives…
I agree with AT about gold, GDX is looking at strong overhead resistance as well (GDX = $38).
Not a bad time to take a break and mull some other opportunities.
February 12th, 2009 at 3:37 pm
GS is going berserk
I dont know AT and Left… Gold still looks strong from my seat. I’m sticking with my DPG until proven otherwise.
Left- I bailed on my UNG just now.
February 12th, 2009 at 3:41 pm
Mannwich,
Don’t be surprised to see a flood of “leave it to the experts” commentary. It’s the establishment talking point (and it’s not necessarily liberal or conservative). David Sirota wrote a rebuttal yesterday if you’re interested.
http://www.openleft.com/showDiary.do?diaryId=11545
Among other things, he points out the obvious flaw that not even all “experts” will have the same opinion and of course the establishment will attempt to marginalize those that don’t share their own.
February 12th, 2009 at 3:46 pm
I-Man. I’m not suggesting a short in Gold or bailing out of all your length, I’m just suggesting that the CNBC Hype-O-Meter is starting to register higher and higher…I’m seeing RSI divergence now intraday….the whole shape of the pattern from the 700 lows actually looks more “corrective” to me….If I see Pete Najarian say something like this tonight:
“LOOK People. This is easy. Stick with what’s working! It’s gold. Take a look a that Chart. GOLD IS GOING HIGHER, the miners look good…The GLD looks great…just stick with it. Also, we saw all sort of Call buying today…”
SOLD.
February 12th, 2009 at 3:49 pm
@10 cc: Thanks for that. I’ll check it out. The “leave it to the experts” meme smells a bit too much like stifling dissent of the rabble so the elite can save itself (on all sides of the political spectrum), divide and conquer, and continue its CON-fidence game at our expense. Maybe I’m being too cynical with this view but how can anyone blame me at this point? Just because I voted for (and gave money to/volunteered for) O doesn’t mean I shouldn’t openly question his policies as a thinking, active citizen in what is supposed to be a Democracy.
February 12th, 2009 at 3:52 pm
The ignorant, lazy, and naive don’t have much money to begin with, and if they do they either inherited it or got it from mommy and daddy. However, market regulation is still a good thing.
February 12th, 2009 at 3:52 pm
AT,
You’ve really got the najarian impression down. That sounds exactly like how he would say it.
February 12th, 2009 at 3:55 pm
But AT, it’s going from the bottom left to the top right…. :-)
Najarian = complete tool, and bald as well. “LOOK People. This is easy. Stick with what I own overnight, The GLD looks great…just stick with it. … (I will sell the piss out of it in the pre-market)” Pump ‘n’ Dump, babee….
I-Man: I have been accumulating UNG, UCO and DBA.
The $ is peaking, massive H&S – and I don’t have to worry about banks or the equity trading range every second.
February 12th, 2009 at 3:57 pm
leftback @ 2:39
“I was thinking that … a really good way of preventing deflation would be to defend the price of gasoline… The restoration of moderate inflation would prevent deflationary expectations and stimulate a modest degree of spending”.
. . . . . . .
You’ve had a number of good analyses and good ideas in the past, but I have to say, this is not one of them.
I like my gasoline prices low (thank you very much).
February 12th, 2009 at 4:00 pm
AT:
For the record… right in line with my schizo trading nature… I did decide to bail on my DGP… I was gonna tighten the trailing stop because you two got me thinking… and then I figured its had a great run over the last few days and we could easily get a gap down tomorrow… so why wait. We are due for a bit of a correction, and this little reversal could be the catalyst for it.
I can always get back in… whats the Paul Jones? “I’d rather be out wishing I was in, than in wishing I had got out”…
I’ll let my short yen and my GS calls ride the lightening tomorrow. Thats one of the things I love about this little community we have going here… If I catch myself knee jerking to someone elses viewpoint, it forces me to reeval my kneejerk.
February 12th, 2009 at 4:00 pm
Pretty good reversal today. PPT? They planned a meeting to form a plan? I’m not going to go broke being “right”.
OT – Did anyone see the article on Dubai in the NY Times? That bubble popped in hurry.
February 12th, 2009 at 4:23 pm
@DL: You misunderstand. Let me clarify – I am not saying I personally favor this idea. I am pointing out that in declining refinery utilization, there is a mechanism for putting a floor under $gaso, and it has the effect of curtailing US deflation – so it might be used as a tool for this purpose. OK?
Then again, over the longer term we should support higher gasoline prices to promote conservation and alternative energy sources, no?
February 12th, 2009 at 4:23 pm
What does it mean when the vix drops like it did in the last hour while the market does a moonshot?
February 12th, 2009 at 4:30 pm
Lower VIX, no breakouts, back to the same old tight trading range??
February 12th, 2009 at 5:04 pm
leftback @ 4:23
I actually favor higher taxes on gasoline, but IF AND ONLY IF accompanied by a reduction in income taxes (or payroll taxes).
But setting this aside, I think that the lower crude oil (and gasoline) prices are a mitigating factor in this economic downturn. I don’t think that all deflation is “bad”. Deflation particularly hurts those who have a lot of debt, but for those with only minimal debt, I don’t see a modest deflation as necessarily a bad thing. For someone with only minimal debt, I think that an “inflation” rate of minus 2% is better than an inflation rate of “plus” 4%.
(For those heavily in debt, there is a somewhat different analysis).
February 12th, 2009 at 5:24 pm
@ Todd:
I’m no vol scholar… but wouldnt it just be a reflection of people dumping a ton of puts???
February 12th, 2009 at 5:36 pm
I am neutral-to-longish gold and short the GLD. Paper gold will collapse when Comex fails to meet the demand for the physical stuff.
February 12th, 2009 at 5:37 pm
Don’t we all love the PPT? Today it’s news that the government may step in with direct assistance to help homeowners who are late on their payments. WTF?! Talk about perverse incentives.
So I make a decent salary and save a large % of my money both for retirement and in cash after paying a fair bit of taxes. I don’t own a home and don’t owe anything to anyone… Man was I stupid… I should have leveraged up to my eyeballs for a sweet piece of the American dream. Meanwhile those who bought houses they could only marginally afford (if ever at all) will now get subsidized because it is now no longer “affordable”? Please pardon my French, but that is pretty f%cked up. The reason housing hasn’t really moved (and probably won’t for awhile) is because everyone is realizing that housing is not worth what we thought. So the solution? Prop up the inflated prices… That’s not gonna work… The only cure for inflated prices is deflation in that particular asset class. Those who gambled and lost lose their shirts (they did sign a CONTRACT, right?) and those with enough money, but not insane enough to buy into the housing Ponzi scheme in will eventually step in and keep the price from hitting long term support at $0. Of course, I think I’m making too much sense, so that means it’ll never happen.
One can only dream…
HCF
February 12th, 2009 at 5:37 pm
Am enjoying the irony of so many gold bugs investing in paper…. :)
February 12th, 2009 at 5:44 pm
@ tranche…
Agreed. Jah irony. :)
February 12th, 2009 at 5:53 pm
@I-Man
Not sure, it’s why I’m asking. The morning and afternoon look like what I would be expecting. Then after 3 everything changes.
Personally I want the vix to be over 50 that first week after option expiration while I reset everything for the next month.
February 12th, 2009 at 6:40 pm
no asset will escape the deflationary abyss. the gov does not give a damn about the individual homeowner it is only concerned with protecting the banks balance sheets. why on earth the gov continues to intervene in asset prices is beyond belief. housing will continue to fall as will equities no matter what the policies coming out of washington are. only those who have known traded and studied the japanese deflationary abyss can understand what is goin on right now
February 12th, 2009 at 6:51 pm
Amen Harold, These guys can only prop this thing up so long, we may go up some, but we are heading lower, alot lower.
February 12th, 2009 at 7:27 pm
@ Andy Tabbo 3.30
Yup, clavadista is right (nice spanish touch). I was counting the beginning of 3 of 3 in 5 (hence clavadista), preparing to chill the bottle, but then, bam, the PuPpeT hit the wires. I had to abruptly abort and a few rowdy ones managed to escape me. But the real fun is gonna be interpreting this monkey wrench thrown into that smooth wave, o master of the wave!
Oh well … tomorrow is another day: Friday the 13th, no less. :-)
February 12th, 2009 at 7:59 pm
So if Barry’s quote is instructive about the market’s job, what is our government’s job?
From what I can see recently . . .
Is it the government’s job to reallocate money from the intelligent and prudent to the ignorant and careless, from the hard working and studious to the lazy and carefree, from the educated to the naive, and from the investors to the speculators.
So, when Mr. Market turns and tries to correct an out of balance situation, it is the government’s job to push back at every turn to avoid/slow the pain of the inevitable. It does not matter which party is in power, this is the apparent cycle.
February 12th, 2009 at 8:31 pm
Of course, BR’s words mean nothing if not contingent on “from the unethical to ethical”.
Afterall, thieving psychopaths are generally intelligent, hard working, and educated.
February 12th, 2009 at 8:45 pm
“Investors are merely speculators (traders) with a longer time horizon.”
I agree with the others on this one. The typical investor (retirement account in mutual funds) is the tool of the investment industry–everyone takes a cut of their pie and they are told that they should be happy with 7-8% per year.
I’m up 10% in two weeks and with all of this volatility it really isn’t hard for a trader to do that.
February 12th, 2009 at 8:59 pm
Gabriel.
Not really that much of monkey wrench. in re: SP500 March Futures….I see 873 as a conclusion of the Wave 2 in the big final fifth. From 873 to 808.25 is the Wave 1 of 3 in the final fifth. This wave 2 we get really should not exceed 841-848 zone. If this is the right count, we should see the dreaded third of a third in the final fifth coming in the next couple of days….
- AT
February 12th, 2009 at 9:03 pm
It may not be naieve to buy LESS, borrow LESS, work LESS……have time to smell the roses and think…….”bring on the recession’……….and live a simpler wondrous life………..HDI not GDP…quality of life measure…which is more relevant?
February 12th, 2009 at 9:10 pm
So where does this say the bailout and stimulus money are going?
February 13th, 2009 at 2:38 am
And we’re all proud to be in this business? That quote elicits no cringes? So it’s perfectly acceptable that people LUCKY enough to have been born with above average IQs achieve their goals at the expense of those who were born less fortunate? Just because you CAN do something doesn’t make it right or something to be proud of.
February 13th, 2009 at 9:28 am
And yet it appears to many that the market has reallocated capital from many to a few who can afford to hire expertise, game the system, and loot shareholders with impunity.
The market is optimized to a single variable – shareholder return – and the time horizons – day, year, and long term. This isn’t a balanced system. The market serves to allocate capital, but it also serves national and global interests – employment, competativeness, and innovation are some of the elemnts of this.
Unless that market acknowledges this and brings market forces in balanace to serve the larger system, regulation and taxes are a necessary evil to drive the market to serve the larger interests.
As we look at the failures, lets think outside of the profit box and ask if we could redesign the system to serve the larger purpose. Some will argue that this would impeed the ability of the market to efficiently allocate capital. Efficiency to the wrong purpose is not a virture; the market is only efficient if you don’t consider the larger impacts that many like to complain about as if they have no responsibility for government reactions to the market.
Consider this post as glove smacking your face, challenging you to be part of the solution.
May 13th, 2009 at 1:27 am
[...] http://www.ritholtz.com/blog/2009/02/quote-of-the-day-on-markets/ [...]