Rick’s Picks
Monday, February 14, 2005
For investors who’d rather be smart than lucky
What caused stocks to streak higher yesterday, albeit briefly? We may never know, but it looked as though shorts were feeling each other’s pain for a little while. It was rumored that there were rumors of bin Laden’s capture, but that story has become so old by now that it’s hard to imagine traders would buy into it, literally. All morning, we’d looked diligently for an opportunity to jump on the S&Ps. In the end, though, only the lucky few who were already aboard, clomping through the day in a hay wagon at a brisk one mile per hour, caught the 30-minute sprint to the week’s finish line. With half the session remaining, the S&Ps did their impression of a fan dancer reluctant to part with her G-string, bumping and grinding for hours in a three-point range.
While this was going on, one bored trader in a chat group I frequent shared these amusing reflections on the silliness of rumor-driven markets:
· "Market sells off amid fears of Greenspan collapse" -- Actually, this would be a good thing for the markets.
· “Market rallies on smooth outcome, no terrorist activity during the Athens Games" - Some may say this is rational -- but really, what fund managers are going to lighten up on their GM, Ford, and Microsoft before the Olympic Games? The same managers must have been buying back those babies when the Olympics completed. B.S.
· "Market selling off, rumor of large earthquake in California" -- If earthquakes are so bad, why is California the most heavily populated state in the country?
Similar to rumors are the loads and loads of "experts" and the willingness to share their "expertise" on what the market likes and what the market does not like:
· "The market didn't like that CPI number" -- Well, if the Dow in fact sold off 80 on the CPI, then why the hell was the Dow up 200 the next day?
· "The market doesn't like it when it doesn't find a level." Enough said.
What is the best, however, are stockbrokers and their immense commitments to provide quality service to their clients. As a new fund manager, I have been blown away by the "information" I get from every broker I know trying to "add value" in exchange for some trades:
· "Hearing MXT to be bot out by COF - good source"
· "Talk of a slowdown in employment, we should get involved in MSTR."
· "Hearing Agere to be awarded large contract from MXO, great for Agere, but could be a hamper on MRVL's model".
· "Hey you know AAPL has had a heck of a move, but sooner or later there will be slowdown in their growth, you should keep an eye it"
Will someone please tell me what this s__t means? It certainly demonstrates I have some pretty useless people trying to earn my business, but it also tells us just how much nobody really knows about anything. Aggregately, it is amazing how much money is being controlled by so many people who do not have a clue as to what the hell is going on. "The market does what the market wants."
Just so.
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Penny Pinching
Grappling with the trend? Check out Rick’s Picks’ archives to see how well Rick Ackerman has done with his forecasts and trading strategies. Last week, tradable lows for oil futures and two gold stocks that had been predicted as far back as October were reached to the penny.
Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2005, Rick Ackerman. All Rights Reserved. www.rickackerman.com
