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Thursday, January 20, 2011

Market Geeks ... Care ... (VIDEO LINK and VIDEO)

This entry is a re-post of a blog entry that I wrote at another site some time ago. I have edited somewhat so that it is current and makes sense for today's date.

Also, please note that there are two blog entries today ...

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We all remember the famous William Shatner, Saturday Night Live “Get a Life” skit. The whole world finally had it's very public opportunity to laugh at Star Trek geeks. It was funny, because Star Trek geeks actually do care.

And it is amazing to the rest of us, that they truly care whether or not Captain Kirk was holding the phaser in his left hand or his right hand. But to a Star Trek geek? That's important business. They care. They find it incomprehensible that the rest of the world does not see the deeper meaning and impact on humanity. The sad result however, is that their skewed sense of priorities causes the rest of us to laugh, even years later when we think of that classic skit.

It's a trait common to all geeks. Caring deeply, and passionately about their subject. And yes, that includes market geeks. Face it. We care about things that other people generally could care less about, or find only mildly interesting. In fact, we care a little too much.

In over 14 years of trading, I have never seen the arguments over market prices, influences and theory as I have over the last 15 months. Hyper-inflationists fighting hyper-deflationists. Peter Schiff was right, or Peter Schiff was wrong. Gold is going to $2,000 an ounce, or Gold is going to $650 an ounce. Fiat currency is the devil. Fiat currency is misunderstood. The DOW is going to 11,000. The DOW is going to 2,000. Ben Bernake is doing a wonderful job. Ben Bernanke is going to plant chips in our heads and enslave us all. I've watched names hurled on both sides. I've watched both sides laugh at each other on mainstream television, and play the "Oh, you'll see" game. Even otherwise very intelligent people get drawn into a shouting match, over the "proper" price of a particular equity.

Again I ask you. Go down your street, and perform your own “Jay Walking” experiment.

Seriously. Do you truly think the average personal truly cares about the price of Gold? Do they know what a derivative is? Do you think they know what an exchange even is?


Market geeks can become emotional about market topics. There is an adamant beliefs about the market direction, and in the bias. Therein lay the problem. Emotional bias leads to a certain belief in a single trade. A trader then holds onto a single trade, because this single trade is going to prove the trader right, and others wrong. They quickly forget that it's not about the one trade, it's about the many trades. Risk management and draw-down principles are thrown right out the door and before you know it, the trader is praying to the God of margin calls and forced liquidations.

When it comes to my trading endeavors, I'm asked all the time where the market is going.

Quite frankly? I don't know, and I don't care.

As long as Gold goes down from here on out so I can prove I was right!

(ppsstt, that's a joke)

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