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Tuesday, October 28, 2008

Beware of Prophets in Analysts Clothing ...

"Absurdity, n.: A statement or belief manifestly inconsistent with one's own opinion." - Ambrose Bierce

It's still dark out as I sit here, drinking my coffee this morning. And today is sort of a 'switched day'. Today my wife doesn't have to go to her bank, but I will be gone ... well, pretty much all day. So I do not have time to put together a proper vlog and upload it before I have to leave the house.

But I thought that I would leave you with a little nugget today.

Every once in a while? I will run across an analysts opinion. An analyst in the hire of a large bank or brokerage. And I will bookmark them, to see how events later turn out. I do this for a very specific reason.

Look at this article, published on August 11th, 2008 regarding U.S. Dollar strength, and especially take note of the analysts in the hire of banks recommendations.

And now, pull up a chart of DXZ8 (The U.S. Dollar Index) since that recommendation was made.

Then look at the LIBOR, and the TED spread in the intervening months. Look at the banks, basically hoard every injection of liquidity they are given.

Is it any wonder that professional traders pay those guys little mind?

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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